DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 6, 2008 (October 5, 2008)

INNOTRAC CORPORATION

(Exact name of registrant as specified in its charter)

Georgia

(State or other jurisdiction of incorporation)

000-23741	58-1592285
(Commission File Number)	(IRS Employer Identification No.)
6655 Sugarloaf Parkway
Duluth, Georgia	30097
(Address of principal executive offices)	(Zip Code)

(678) 584-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (seeGeneral Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

The Merger and the Merger Agreement

On October 5, 2008, Innotrac Corporation, a Georgia corporation (“Innotrac”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GSI Commerce, Inc., a Delaware corporation (“GSI”), and Bulldog Acquisition Corp., a Georgia corporation and wholly-owned subsidiary of GSI (“Acquisition Sub”).

Upon the terms and subject to the conditions of the Merger Agreement, Acquisition Sub will merge with and into Innotrac, with Innotrac continuing as the surviving corporation and a wholly-owned subsidiary of GSI (the “Merger”).  The Merger Agreement provides that GSI will acquire Innotrac for $52.0 million, consisting of cash of $22.0 million and shares of GSI common stock valued at $30.0 million.  The cash amount and the number of shares to be received are subject to adjustment.  At GSI’s option, all or a portion of the stock component may be paid in cash.

Innotrac also entered into certain additional agreements in connection with the Merger Agreement, as described below.

The number of shares to be issued as the stock component of the merger consideration will be calculated based on the volume weighted average price of GSI common stock during the twenty trading days ending on (and including) the third trading day prior to the scheduled date of the Innotrac shareholders meeting to approve the Merger.  If the average GSI stock price during this period is greater than or equal to $13.03 or less than or equal to $20.85, the value of the stock component is fixed and the number of shares comprising the stock component will equal $30.0 million divided by the average GSI stock price during this period.  If the average GSI stock price during this period is greater than $20.85, the number of shares comprising the stock component will be fixed at 1,438,849 and, accordingly, the value of the stock component will be greater than $30.0 million; however, GSI may, at its election, pay all or a portion of the stock component in cash in lieu of issuing stock, and thus reduce the value of this portion of the consideration to no less than $30 million.  If the average GSI stock price during this period is less than $13.03, the number of shares comprising the stock component will be fixed at 2,302,379 and, accordingly, the value of the stock component will be less than $30.0 million.  If the average GSI stock price during this period is less than $11.12, either party will have the right to terminate the agreement.  If this termination right is exercised by Innotrac, GSI may, at its election, avoid termination of the agreement by paying the stock component of the merger consideration in either cash or stock that has a value of $25.6 million.

The Merger is expected to close during the first half of 2009 and is subject to customary and other closing conditions, including (i) approval of the Merger Agreement by the holders of Innotrac common stock, (ii) receipt of certain third party consents, (iii) that there be no material adverse effect on Innotrac’s business between the execution of the Merger Agreement and consummation of the Merger and (iv) court approval by the United States District Court for the Northern District of Ohio (the “Court”) of a Settlement Agreement between Innotrac and the court-appointed receiver for the IPOF Fund (as defined below), as described in further detail below.

Under the Merger Agreement, Innotrac may not solicit or participate in discussions or negotiations with a third party regarding an acquisition of the stock or assets of Innotrac, except that under certain circumstances Innotrac may respond to an unsolicited bona fide proposal for an alternative acquisition that is a Superior Proposal (as defined in the Merger Agreement); provided Innotrac otherwise complies with certain terms of the Merger Agreement.

Innotrac and GSI have agreed to customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants by Innotrac (i) to conduct its business in the ordinary course consistent with past practices during the interim period between the execution of the Merger Agreement and consummation of the Merger, (ii) not to engage in certain kinds of transactions during such period without the consent of GSI, (iii) to convene and hold a meeting of the shareholders of Innotrac to consider and vote upon the approval of the Merger, and (iv) that, subject to certain exceptions, the Board of Directors of Innotrac will recommend approval of the Merger by its shareholders.

The Merger Agreement also contains certain termination rights for both GSI and Innotrac.  Upon termination of the Merger Agreement under specified circumstances Innotrac will be required to pay GSI a termination fee of $1.6 million and reimburse GSI for up to $1.0 million of its expenses incurred in connection with the Merger.

The Merger Agreement has been included to provide investors with information regarding its terms.  It is not intended to provide any other factual information about Innotrac, GSI or Acquisition Sub. The Merger Agreement contains representations and warranties of each of Innotrac, GSI and Acquisition Sub made to the other parties to the Merger Agreement.  The assertions embodied in those representations and warranties are qualified by in formation in a confidential disclosure letter delivered in connection with signing the Merger Agreement.  The disclosure letter contains information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement.  Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts at the time they were made or otherwise.

The foregoing description of the material terms of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K, and is incorporated by reference herein.

IPOF Fund Settlement Agreement

Also on October 5, 2008, Innotrac entered into a Settlement Agreement (the “Settlement Agreement”) with Mark E. Dottore, as the Court appointed receiver (the “Receiver”) for all assets of any kind of IPOF L.P., IPOF Fund, IPOF Fund II, L.P., GSI and GSGI (“IPOF Fund”).  The Settlement Agreement provides that, upon the terms and subject to the conditions set forth in the Settlement Agreement, the Receiver shall receive IPOF Fund’s share of the Merger consideration, with respect to the shares owned by IPOF Fund, directly from GSI.  (IPOF Fund holds 4,321,771 shares, or approximately 35.1%, of Innotrac Common Stock currently outstanding.)  The Settlement Agreement also provides that the Receiver will file a motion with the Court requesting that the Court (i) grant conditional and final approval of the Settlement Agreement, (ii) grant conditional and final approval of the sale, pursuant to the Merger Agreement, of the shares of Innotrac Common Stock owned by IPOF Fund, (iii) order the dismissal with prejudice of all claims against Innotrac or any of its affiliates from the actions captioned Sheldon Gordon, et al. v. David Dadante, et al., Case No. 1:05 CV 2726, in the United States District Court for the Northern District of Ohio, Small v. Regalbuto, Case No.1:06 CV 01721, in the United States District Court for the Northern District of Ohio, and Amantea v. Innotrac, et al., Case No. 07 CV 03542, in the United States District Court for the Northern District of Ohio, and (iv) issue a Bar Order pursuant to which all other participants in any litigation involving IPOF Fund are barred from pursuing any claims against Innotrac or any of its affiliates.

In accordance with the terms of the Settlement Agreement, Innotrac will pay to the Receiver the sum of $100,000 for distribution to IPOF Fund, separate from IPOF Fund’s share of the Merger consideration to be received from GSI.  Additionally, each of Innotrac and IPOF Fund will fully release the other from all causes of action, suits, complaints, claims, liabilities, obligations, damages and expenses (including attorneys’ fees and costs).

The foregoing description of the material terms of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Settlement Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated by reference herein.

Voting, Cooperation and Indemnification Agreement

Also on October 5, 2008, Scott D. Dorfman, Innotrac’s Chairman, President and Chief Executive Officer (“Mr. Dorfman”), and his wife entered into a Voting, Cooperation and Indemnification Agreement (the “Voting Agreement”) with GSI.  The Voting Agreement, upon the terms and subject to the conditions set forth therein, generally imposes on both Mr. Dorfman and his wife certain restrictions and obligations with respect to their ownership of Innotrac Common Stock until the earlier of a valid termination of the Merger Agreement and the date the Merger is deemed effective.  Specifically, the Voting Agreement prohibits each of Mr. Dorfman and his wife from transferring any of their respective shares of Innotrac common stock, and requires that both Mr. Dorfman and his wife vote all such shares of Innotrac Common Stock in favor of the Merger and the Merger Agreement and support actions necessary to consummate the Merger.  The Voting Agreement also prohibits each of Mr. Dorfman and his wife from soliciting or knowingly facilitating inquiries or proposals relating to alternative business combination transactions.

Additionally, the Voting Agreement provides that if the Merger Agreement is terminated under certain circumstances, Mr. Dorfman will pay to GSI two-thirds of the amount by which the proceeds payable to Mr. Dorfman in connection with any Acquisition Proposal (as defined in the Merger Agreement) exceeds the merger consideration payable to Mr. Dorfman under the Merger Agreement provided that such Acquisition Proposal is completed or entered into (and subsequently completed) during the one year period after termination.

The Voting Agreement also requires Mr. Dorfman to indemnify GSI and Acquisition Sub, beginning after the effective date of the Merger, from and against all claims, damages or expenses arising out of (i) any breach of a representation or warranty contained in the Voting Agreement or the capitalization representation in the Merger Agreement, (ii) any failure or refusal to satisfy or perform any covenant of the Voting Agreement, and (iii) subject to certain exceptions, matters related to litigation involving the IPOF Fund.  Claims for such amounts must be made by GSI within two years of the closing of the Merger.  Mr. Dorfman’s indemnification liability is capped at $10.0 million, subject to certain exceptions.  In order to secure his indemnification obligations, Mr. Dorfman will cause $4.0 million of his Merger consideration to be placed into an escrow account.  The escrow amount may be decreased as releases from IPOF Fund investors are received.

The foregoing description of the material terms of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, and is incorporated by reference herein.

Additional Information About the Merger

In connection with the proposed Merger, Innotrac and GSI will file a registration statement, a proxy statement/prospectus and other relevant documents concerning the proposed Merger with the Securities and Exchange Commission (“SEC”).  SHAREHOLDERS OF INNOTRAC ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Shareholders may obtain a free copy of the proxy statement/prospectus (when available) and other documents filed by Innotrac and GSI at the SEC's Web site at http://www.sec.gov.  Copies of the proxy statement/prospectus can also be obtained, without charge, by directing a request to:

Innotrac Corporation	GSI Commerce, Inc.
6655 Sugarloaf Parkway	935 First Avenue
Duluth, Georgia  30097	King of Prussia, PA 19406
Attn.: George M. Hare, Chief Financial Officer	Attention:  Greg Ryan, Director, Corporate Communications
Telephone Number: (678) 584-4000	Telephone Number: (610) 491-7294

Innotrac, GSI and their respective directors and executive officers and other members of management and employees may be deemed to participate in the solicitation of proxies in respect of the proposed merger.  Information regarding Innotrac’s directors and executive officers is available in Innotrac’s annual report on Form 10-K for its fiscal year ended December 31, 2007 filed with the SEC on April 15, 2008 and amended on April 29, 2008, and in its proxy statement for its 2008 annual meeting of shareholders filed on May 8, 2008.  Information regarding GSI's directors and executive officers is available in GSI's proxy statement for its 2008 annual meeting of shareholders, which was filed with the SEC on April 25, 2008.  Additional information regarding the interests of such potential participants will be included in the proxy statement/prospectus relating to the merger and the other relevant documents filed with the SEC when they become available.

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

Employment Agreement for Mr. Dorfman

Innotrac entered into an Employment Agreement on October 5, 2008 with Mr. Dorfman for a term ending on December 31, 2011 (the “Employment Agreement”).  The Employment Agreement only becomes effective if and when the Merger is consummated.

The Employment Agreement provides that, upon the terms and subject to the conditions set forth therein, Mr. Dorfman will serve as Innotrac’s Executive in Transition and, in such capacity, will have supervision over, and responsibility for, Innotrac’s account management function, consistent with the account management responsibilities Mr. Dorfman performed in the one year period prior to the Merger.  Under the Employment Agreement, Mr. Dorfman may also provide certain consulting services to GSI’s Chief Executive Officer or Chief Financial Officer regarding Innotrac’s account management function.

Pursuant to the Employment Agreement, Mr. Dorfman will receive an annual base salary of $425,000.  In addition, Mr. Dorfman will receive a restricted stock award of a number of shares of common stock of GSI equal to the quotient of $2.5 million divided by the average of the closing price of GSI’s common stock for the five business day period immediately prior to the date of consummation of the Merger.  All such restricted shares shall vest on December 31, 2011, or upon the earlier termination of Mr. Dorfman’s employment by Innotrac other than for “cause” or his resignation by reason of a breach by Innotrac of its obligations under the Employment Agreement.  Mr. Dorfman has also agreed to certain restrictive covenants, including generally not to compete with Innotrac or GSI or solicit their customers or employees for a period of one year following termination of his employment.

The Employment Agreement requires Innotrac to execute at the consummation of the Merger an aircraft charter services agreement for an airplane owned by an affiliate of Mr. Dorfman, with a term coterminous with Mr. Dorfman’s employment.  Pursuant to the charter agreement, GSI has agreed to pay fees of $37,000 a month for use of the aircraft.  Mr. Dorfman’s affiliate is responsible for all fuel, maintenance, hangar storage, insurance and other costs and expenses associated with the aircraft.

The foregoing description of the material terms of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K, and is incorporated by reference herein.

In addition, on October 5, 2008, GSI and Mr. Dorfman entered into a Nondisclosure, Noncompetition and Nonsolicitation Agreement with GSI pursuant to which Mr. Dorfman agreed generally not to compete with, or solicit the customers or employees of, GSI or its affiliates for a period of four years following the consummation of the Merger.  In the event that the  Merger Agreement is terminated in accordance with its terms, this agreement will also terminate.

Transition Agreement for Mr. Hare

Innotrac also entered into a Transition Agreement on October 5, 2008 with Mr. George M. Hare, the company’s Chief Financial Officer (the “Transition Agreement”).  The Transition Agreement only becomes effective if and when the Merger is consummated.

The Transition Agreement provides that, upon the terms and subject to the conditions set forth therein, Mr. Hare will continue to serve as Innotrac’s Chief Financial Officer for a term ending six months after the consummation of the Merger at an annual base salary of $225,000.  Upon expiration of the Transition Agreement or, if earlier, termination of the Transition Agreement for any reason other than termination by Innotrac of Mr. Hare’s employment for “cause” or Mr. Hare’s resignation, Mr. Hare will be entitled to receive a retention payment of $168,750.

ITEM 7.01 REGULATION FD DISCLOSURE.

On October 6, 2008, Innotrac and GSI issued a joint press release, attached as Exhibit 99.1 hereto, relating to the Merger Agreement and the Merger.  The release is hereby incorporated herein by this reference.

ITEM 9.01	FINANCIAL STATEMENTS AND EXHIBITS.
(d)	Exhibits.

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated October 5, 2008, between Innotrac Corporation, GSI Commerce, Inc. and Bulldog Acquisition Corp. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by GSI Commerce, Inc. (SEC File No. 000-16611) with the Securities and Exchange Commission on October 6, 2008)(The schedules and certain exhibits to the Agreement and Plan of Merger are omitted pursuant to Item 601(b)(2) of Regulation S-K.  Innotrac agrees to furnish supplementally to the SEC, upon request, a copy of any omitted schedule or exhibit)
10.1	Settlement Agreement, dated October 5, 2008, between Innotrac Corporation and Mark E. Dottore, as the Court appointed receiver for all assets of any kind of IPOF L.P., IPOF Fund, IPOF Fund II, L.P., GSI and GSGI.
10.2	Voting Cooperation and Indemnification Agreement, dated October 5, 2008, between Scott D. Dorfman, Susan Mary Trotochaud and GSI Commerce, Inc (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by GSI Commerce, Inc. (SEC File No. 000-16611) with the Securities and Exchange Commission on October 6, 2008).
10.3	Employment Agreement, dated October 5, 2008, between Innotrac Corporation and Scott D. Dorfman.
99.1	Press release of Innotrac Corporation and GSI Commerce, Inc. announcing the Merger and the execution of the Merger Agreement, dated October 6, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		INNOTRAC CORPORATION
	By:	/s/ George M. Hare
		George M. Hare
Date: October 6, 2008		Chief Financial Officer

EX-10.1

Exhibit 10.1

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”), entered into as of October 5, 2008, is made by and between Innotrac Corporation (“INOC”) and Mark E. Dottore, as the Court appointed Receiver for all assets of any kind of IPOF L.P., IPOF Fund, IPOF Fund II, L.P., GSI and GSGI1 (which are collectively referred to as the “IPOF Fund”) acting for and on behalf of the IPOF Fund.  The IPOF Fund and INOC are collectively referred to herein as the “Parties.”

RECITALS

A.  In November 2005,persons comprising allIPOF Fund limited partner/investors filed or subsequently joined as plaintiffs in an action captioned Sheldon Gordon, et al. v. David Dadante, et al., Case No. 1:05 CV 2726, in the United States District Court for the Northern District of Ohio (the “Receivership Action”).

B.  Mark E. Dottore (the “Receiver”) was by Orders in the Receivership Action entered November 23, 2005 and December 1, 2005 as supplemented by an Order entered October 6, 2006, duly appointed as the Receiver for all assets of any kind of the IPOF Fund (the “Receivership Estate”), and was invested by the Court with the power to administer the Receivership Estate with the same rights and powers as a general partner in a limited partnership pursuant to the law of Ohio.

C.  Assets of the IPOF Fund for which Dottore is the Receiver include 4,321,771 shares of common stock of INOC, representing approximately 35.1% of the total shares outstanding, all of which the Receiver desires to sell for the benefit of IPOF Fund and its limited partners/investors.

D.  In addition to the Receivership Action there are actions pending in the United States District Court for the Northern District of Ohio captioned Amantea v. Innotrac, et al., Case No. 07 CV 03542 (the “Amantea Action”), and Small v. Regalbuto, Case No.1:06 CV 01721 (the “Small Action”), in which certain IPOF Fund limited partners/investors are either parties or proposed parties who assert or seek to assert individual claims against INOC and certain of its current and former officers and directors.

1           “GSI” and “GSGI” purportedly are entities established by David Dadante to perpetuate a fraudulent scheme regarding the IPOF Fund.

E.Since the establishment of the Receivership, INOC and the Receiver have engaged in cooperative efforts intended to bring about the sale or disposition of INOC common stock held by IPOF Fund so as to realize the fair value of that stock for the benefit of IPOF Fund.  INOC has entered into a merger agreement more particularly identified below, and the Parties each believe that the merger is in the best interests of INOC and the IPOF Fund, and will provide the IPOF Fund with the means of liquidating its shares of INOC common stock at a fair value.  INOC has entered into this Settlement Agreement in conjunction with the merger agreement, and the Parties acknowledge that the merger is contingent upon, among other things, (i) the settlement and release of any and all existing or potential claims, disputes or causes of action by the IPOF Fund, on its own behalf and on behalf of all of its direct or indirect subsidiaries, parents, successors and other affiliates, general and limited partners and investors, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys, against INOC and its direct or indirect subsidiaries, parents, successors and other affiliates, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys (collectively, the “INOC Released Parties”) in the Receivership, Small and Amantea Actions; and (ii) the issuance of certain ancillary orders as further provided herein in connection with approval of this settlement.

F.  In undertaking to resolve, settle and dismiss these claims, disputes and causes of action, the Parties agree and acknowledge that this Agreement is not premised on any finding or ruling by any court or other authority, or any admission by the INOC Released Parties, that there has been any fraud or other misconduct on the part of any of the INOC Released Parties with respect to the Receivership, Small or AmanteaActions or any other of the above-referenced claims, disputes or causes of action.

2

G.  This Settlement Agreement is subject to approvals by the United States District Court for the Northern District of Ohio in the Receivership, Small and Amantea Actions, and such determinations or findings the Court deems necessary or appropriate to effectuate the Agreement (“Court Approval”), as well as issuing certain ancillary orders as provided herein.

NOW THEREFORE, the Parties, for the consideration recited and as set forth herein, and, subject to Court Approval, intending to be legally bound, hereby agree as follows:

1.           Innotrac Stock.  Simultaneous with the execution of this Agreement, INOC has entered into a merger agreement with GSI Commerce, Inc. (the “Purchaser”) (the “Merger Agreement”) pursuant to which all shares of INOC stock, including all shares held by the Receiver, will be acquired for either (i) a combination of cash and Purchaser's stock or (ii) all cash, as provided in the Merger Agreement (the “Merger Consideration”).  The term “Merger Agreement” as used herein will also include any amendment to the Merger Agreement entered into by INOC after the date hereof that is approved by its Board of Directors.  The shares held by the IPOF Fund will be entitled to receive in the merger the same per share Merger Consideration per share to be paid to all other INOC shareholders pursuant to the Merger Agreement.  The Receiver shall receive the IPOF Fund’s share of the Merger Consideration with respect to the shares owned by the IPOF Fund directly from the Purchaser, as provided in the Merger Agreement.  The Parties agree that the Merger Consideration per share provided for in the Merger Agreement is a fair and equitable price for INOC shares and it is in the best interests of all INOC shareholders to vote in favor of such merger.  The purchase of INOC shares for an amount equal to Merger Consideration per share is a material term of this Agreement and this Agreement will be of no further effect if the merger is not consummated for any reason.

3

2.           Court Approval. Within one day of the execution of this agreement, the Receiver will file a motion in the Receivership Action that will include a request for immediate conditional approval and for final approval from the Court regarding the matters described in Section 4 below.  The Parties agree that obtaining said conditional approval and final approval is a material term of this Agreement and the Merger Agreement.  The Receiver shall exercise his best efforts to obtain conditional approval as provided herein no later than two days after the filing of the motion seeking approval of this Agreement.  Final approval shall be subject to such orders the Court may issue and on a schedule to be determined by the Court.  The Parties agree to file such motions and briefs and to present such arguments and otherwise use their reasonable best efforts to take any and all such further actions as may be necessary or appropriate to support this Agreement and to obtain Court Approval.

3.           Cash Payment. Simultaneous with the closing of the INOC merger, INOC will pay to the Receiver the total sum of one hundred thousand dollars ($100,000) (the “Cash Payment”) for the benefit of the limited partners/investors of the IPOF Fund.  Neither INOC nor the Purchaser shall have any responsibility or liability for the apportionment of the Cash Payment among the partners/investors of the IPOF Fund or any parties to the Receivership, Small or Amantea Actions, or to any person claiming any right to distribution thereof in the administration of the Receivership Estate.  The IPOF Fund and/or any person to whom all or any part of the Cash Payment shall be distributed shall be solely responsible for any tax consequences that may arise from acceptance of the Cash Payment or any portion thereof.

4.           Conditions. It is a condition to the effectiveness of Sections 1 through 3 and 5 through 7 of this Agreement, and a condition to the obligations of INOC and the Purchaser to consummate the transactions contemplated by the Merger Agreement, that: (i) the Court grant conditional and final approval of this Agreement, (ii) the Court grant conditional and final approval of the sale of the shares of INOC stock owned by the IPOF Fund pursuant to the Merger Agreement, (iii) the Court order the dismissal with prejudice of the INOC Released Parties from the Receivership, Small and Amantea Actions and (iv) the Court issue the Bar Order in the form attached as Exhibit A.

4

5.           Voting Agreement. If requested by the Purchaser in connection with the Merger Agreement, the Receiver will enter into a mutually satisfactory voting agreement with the Purchaser, and will vote the shares held by the IPOF Fund in favor of the merger, subject to the terms and conditions of such voting agreement, which agreement shall be substantially identical to the voting provisions contained in the voting agreement entered into by Scott Dorfman pursuant to the Merger Agreement.

6.           Escrow Account and Conditions for Release of Escrow.  The Merger Consideration received by the Receiver from the sale of INOC shares pursuant to the Merger Agreement, and the Cash Payment received by the Receiver under this Agreement, shall be held in an escrow account for the benefit of the limited partners/investors of the IPOF Fund (which escrow account may include a brokerage account for the purpose of selling any Purchaser stock received as part of the Merger Consideration) established by the Receiver for that purpose.  The escrow agent for such escrow account shall be jointly selected by the Receiver and INOC, and the escrow agreement applicable to the account established by the Receiver to hold the Merger Consideration and the Cash Payment shall be in the form of Exhibit C and shall include a provision implementing this Section 6.  The Receiver may, with Court approval, liquidate the portion of the Merger Consideration consisting of stock at any time, with proceeds resulting therefrom to be retained in escrow until the conditions referenced in this Section 6 are met.  The Receiver agrees that none of the Merger Consideration or the Cash Payment is to be released from the escrow account or distributed to any person unless and until all of the following conditions are satisfied:

5

(a)	Such person has executed, with such execution witnessed by a Notary Public, and delivered a release in the form of Exhibit B for the benefit of the INOC Released Parties, the Purchaser and its direct or indirect subsidiaries, parents, successors and other affiliates, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys (collectively, the “Purchaser Released Parties”), and the Receiver;
(b)	The release and distribution has been approved by the Court as part of the Court’s approval of the terms of this Agreement and such plan of distribution and determination of rightful claims by the Receiver has been approved by the Court;
(c)	The Court has issued final orders pursuant to Fed. R. Civ. P. 54(b) with respect to the Court’s approval of the terms of this Agreement and such plan of distribution and determination of rightful claims by the Receiver and dismissal of claims against the INOC Released Parties in the Receivership, Small and Amantea Actions; and
(d)	The Bar Order referenced in Section 4(iv) above remains in effect.

7.           Releases.  The following releases shall be effective as of the closing of the INOC merger pursuant to the Merger Agreement:

   (a) INOC, on its own behalf and on behalf of each of its direct or indirect subsidiaries, parents, and other affiliates, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives and their respective successors, predecessors, heirs and assigns and attorneys, whether in a representative or individual capacity, jointly and severally, fully and forever, release and covenant not to sue the IPOF Fund and all of its direct or indirect subsidiaries, parents, successors and other affiliates, general and limited partners and investors, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys, whether in a representative or individual capacity, with respect to all manner of actions, causes of action, suits, debts, dues, charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages and expenses (including attorneys’ fees and costs) of any nature whatsoever, in law or equity, that INOC had, now has, or may in the future have arising out of or relating in any way to the purchase or ownership of INOC stock by the IPOF Fund.

6

   (b)           The IPOF Fund, on its own behalf and on behalf of each of its direct or indirect subsidiaries, parents, successors and other affiliates, general and limited partners and investors, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives and their respective successors, predecessors, heirs and assigns, and attorneys, whether in a representative or individual capacity, jointly and severally, fully and forever, release and covenant not to sue any of the INOC Released Parties or the Purchaser Released Parties, whether in a representative or individual capacity, with respect to all manner of actions, causes of action, suits, debts, dues, charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages and expenses (including attorneys’ fees and costs) (collectively referred to as “Claims”) of any nature whatsoever, in law or equity, that they or any of them have had, now have, or may in the future have, including but not limited to any Claims that have been or could have been brought with respect to the facts or circumstances alleged in the Receivership, Small or Amantea Actions or which arise out of or relate in any way to the purchase or ownership of INOC stock by the IPOF Fund or any other entity created by, maintained by, or relating in any way to David Dadante, or the trading in, granting or exercising of options in, or alleged manipulation of INOC stock.

7

   (c)           Each Party expressly waives any and all provisions, rights, and benefits conferred by any law or regulation of the United States, any state or territory of the United States or principle of common law that may be the basis for any Claim released hereunder.  The Parties shall not institute or prosecute against each other any administrative, civil or judicial process, action or proceeding or suit that relates to the facts or circumstances alleged, or damages or liabilities sought or that could have been sought in the Receivership, Small or Amantea Actions, or that arises out of or relates in any way to the purchase or ownership of INOC stock by the IPOF Fund or any other entity created by, maintained by, or relating in any way to David Dadante, or the trading in, granting or exercising of options in, or alleged manipulation of INOC stock, except as may be necessary to enforce this Agreement or a breach thereof.

   (d)           The releases herein shall be construed in accordance with Ohio Rev. Code Ann. § 2307.28 (West 2007) and Comer v. Risko, 833 N.E.2d 712, 717 (Ohio 2005) to bar any claims for contribution or legal or equitable indemnity against any of the INOC Released Parties or the Purchaser Released Parties, whether in a representative or individual capacity. For the avoidance of doubt, the Parties agree that they interpret these authorities to cover all Claims, whether or not such Claims sound in tort, contract, or federal or state statutory law.  Moreover, the Parties agree that the releases herein cover any Claim by the IPOF Fund or its direct or indirect subsidiaries, parents, successors and other affiliates, all general and limited partners and investors, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives and their respective successors, predecessors, heirs and assigns, and attorneys, whether in a representative or individual capacity, against any of the INOC Released Parties or the Purchaser Released Parties on any legal or equitable theory for any Claims arising out of the facts or circumstances alleged in the Receivership, Small or Amantea Actions, or that arise out of or that relate in any way to the purchase or ownership of INOC stock by the IPOF Fund or any other entity created by, maintained by, or relating in any way to David Dadante, or the trading in, granting or exercising of options in, or alleged manipulation of INOC stock.

8

   (e)           The foregoing releases and covenants not to sue shall not apply to compliance with the terms of this Agreement and with the exhibits attached hereto.

8.           Receiver’s Reporting on Release of Escrow.  The Receiver shall provide the following reports related to the release from escrow and distribution of the Merger Consideration and Cash Payment:

   (a)Within two (2) days of the execution of this Agreement, the Receiver shall provide to INOC and Purchaser a written report identifying: (i) each IPOF Fund limited partner or investor, and (ii) the amount of each limited partner’s or investor’s aggregate capital contribution to the IPOF Fund (prior to any distributions or recoveries).

   (b)Upon any release from escrow and distribution of the Merger Consideration and Cash Payment under the terms of Section 6(a) through (d) of this Agreement, the Receiver shall provide to INOC and Purchaser a copy of the release in the form of Exhibit B hereto executed by the IPOF Fund limited partner or investor and a written report identifying the amount distributed to such IPOF Fund limited partner or investor.

9.           Third-Party Beneficiaries.  No provision of this Agreement is intended to or shall be construed to grant or confer any right to enforce this Agreement, or any remedy for breach of this Agreement, to or upon any person, other than (i) the parties hereto and (ii) the Purchaser Released Parties and the other INOC Released Parties, who shall be considered third-party beneficiaries of this Agreement.

9

10.          Attorneys’ Fees and Costs.  Each Party shall bear its own costs and attorneys’ fees incurred in the Receivership, Small and Amantea Actions, and in performing its covenants under this Agreement.  This paragraph shall not be construed to preclude the INOC Released Parties or the Purchaser Released Parties from seeking to recover its reasonable attorneys’ fees and expenses from any other person, either in the Receivership, Small and Amantea Actions or any other case, including the individual plaintiffs in those cases, pursuant to Fed. R. Civ. P. 11 or otherwise, if an INOC Released Party or Purchaser Released Party is forced to file motions or briefs or to take other action to enforce or to defend this Agreement or to have the claims against the INOC Released Parties or the Purchaser Released Parties in the Receivership, Small or Amantea Actions or other cases dismissed.  The Receiver agrees that he shall take and bear the expense of any and all actions as is reasonably necessary or appropriate to obtain and enforce the Bar Order as provided in Sections 4 and 6 above and compliance with the Release described in Section 7 for the benefit of the INOC Released Parties and the Purchaser Released Parties.

11.          No Admission/Waiver.  The Parties expressly understand and acknowledge that this Agreement constitutes a compromise and settlement of disputed claims.  No action taken by any Party, either previously or in connection with this Agreement, shall be deemed or construed to be an admission of the truth or falsity of any claims heretofore made or an acknowledgment or admission by any Party of any fault or liability whatsoever to another Party.  This Agreement is entered into solely in settlement of such claims and to avoid the disruption, time, and expense of litigation.

12.          Continuing Jurisdiction.  The United States District Court for the Northern District of Ohio shall retain jurisdiction to enforce this Agreement and any disputes or other claims and/or cases that relate to or involve this Agreement.

13.          Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio without regard to the conflicts of law principles thereof.

10

14.          Entire Agreement.  This Agreement and the Exhibits hereto constitute the entire agreement between and among the Parties regarding the claims and matters discussed herein.  Except as expressly set forth in this Agreement, there are no representations, warranties, or endorsements, whether oral, written, expressed or implied, that in any way affect or condition the validity of this Agreement or any of its conditions or terms.  Any other provisions of this Agreement to the contrary notwithstanding, this Agreement may be modified only by a writing signed by all Parties and this provision cannot be orally waived.

15.          Severability.  If any term, condition or provision contained herein shall contravene or be invalid under applicable law, such contravention or invalidity shall not invalidate the whole Agreement, but the Agreement shall be construed as not containing the particular term and condition or provision held to be invalid, and the rights and obligations of the Parties shall be construed and enforced accordingly.

16.          Representations.  This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties, with the full intent of releasing all claims against each other.  Each Party acknowledges that:

(a)           It has read this Agreement;

(b)          It has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of its own choice;

(c)          It understands the terms and conditions, provisions, and consequences of this Agreement and of the agreements it contains; and

(d)          It is fully aware of the legal and binding effect of this Agreement.

17.          Assignment.  This Agreement shall not be assigned by any party without the prior written consent of all other parties.  This Agreement shall be binding on, enforceable by and inure to the benefit of, each of the parties and their successors or assigns, provided that no assignment shall release the assignor from its obligations under the Agreement unless the other parties agree in writing to such release.

11

18.          Authority.  Each person executing this Agreement on behalf of any other person or persons hereby warrants that it has full authority to do so.

19.          Facsimile Signatures.  Execution of this Agreement may be by facsimile signature which shall be deemed to constitute an original.

20.          Counterparts.  This Agreement may be executed in counterparts.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives, on the respective dates set forth below.

12

Dated:  October 5, 2008	INNOTRAC CORPORATION
	By:	/s/ Scott Dorfman
	Its:	CEO
Dated:  October 5, 2008	IPOF FUND, L.P., IPOF Fund, IPOF Fund II, GSI and GSGI
	By:	/s/ Mark E. Dottore
		Mark E. Dottore, Receiver

13

Exhibit “A” to Settlement Agreement

dated October 5, 2008

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OHIO

Eastern Division

SHELDON GORDON, et al.,		)	Case No. 1:05CV2726
		)
	Plaintiffs,	)	Judge Kathleen O’Malley
		)
	v.	)
		)
DAVID DADANTE, et al.		)
		)
	Defendants.	)

MARK SMALL, et al.,		)	Case No. 1:06CV1721
		)
	Plaintiffs,	)	Judge Kathleen O’Malley
		)
	v.	)
		)
FRANK REGALBUTO, et al.		)
		)
	Defendants.	)

NANCY AMANTEA, et al.,		)	Case No. 1:07CV3542,
		)
	Plaintiffs,	)	Judge Kathleen O’Malley
		)
	v.	)
		)
INNOTRAC, INC., et al.		)
		)
	Defendants.	)

BAR ORDER, PERMANENT INJUNCTION AND DISMISSAL OF CLAIMS

           WHEREAS, on October __, 2008, Mark E. Dottore, Receiver (“Receiver”), filed a motion (the “Motion”) seeking a judicial determination that in connection with a proposed settlement between and among Innotrac Corporation (“INOC”) and IPOF Fund, L.P. (“IPOF”), in the above-captioned action Case No. 1:05CV2726 (the “Receivership Action”): (i) an order should issue dismissing any and all claims, counterclaims, crossclaims and third-party complaints against INOC and certain of its officers named as defendants (the “INOC Defendants”) currently pending in the cases captioned Amantea v. Innotrac, et al., Case No.07 CV 03542 (the “Amantea Action”), and Small v. Regalbuto, Case No.1:06 CV 01721 (the “Small Action”); and (ii) an order should issue barring and enjoining any and all present and future claims against the persons and entities defined herein as the “INOC Released Parties,” whether for indemnity, contribution, or otherwise, arising out of, in connection with, or in any way related to the Receivership Action, the Amantea Action, the Small Action, or the allegations therein; and

1

           WHEREAS, the Receiver has filed a Motion in the Small Action seeking a determination that as a result of the settlement between and among INOC and IPOF in connection with the Receivership Action: (i) an order should issue dismissing the third-party claims against the INOC Defendants in the Small Action; and (ii)an order should issue barring and enjoining any and all present and future claims against the INOC Released Parties, whether for indemnity, contribution, or otherwise, arising out of, in connection with, or in any way related to the claims that have been or could have been asserted in the Small Action; and

           WHEREAS, the Receiver has filed a Motion in the Amantea Action seeking a determination that as a result of the settlement between and among INOC and IPOF in connection with the Receivership Action: (i) an order should issue dismissing all claims against the INOC Defendants in the Amantea Action, and (ii) barring and enjoining any and all present and future claims against the INOC Released Parties, whether for indemnity, contribution, or otherwise, arising out of, in connection with, or in any way related to the claims that have been or could have been asserted in the Amantea Action; and

2

           WHEREAS, due and proper notice of the Motion and the hearing held in connection with the Motion on _______, 2008 (the “Hearing”) has been given to all interested persons, and the Court has considered the papers filed by Receiver in support of its Motion, and all objections to the Motion whether filed with the Court or presented at the Hearing, and such other and further evidence and argument as was presented at the Hearing.

           NOW, THEREFORE, it is hereby ordered that:

           I.           For purposes of this Order, the term “INOC Released Parties” refers to INOC, Scott Dorfman, David L. Gansey, David Ellin, Larry C. Hanger, Peter Toner, Jr., and INOC’s direct or indirect subsidiaries, parents, successors and other affiliates, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys, and each of them.  The successors of Innotrac Corporation included in the term “INOC Released Parties” shall include GSI Commerce, Inc. and its direct or indirect subsidiaries, parents, successors and other affiliates, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys.

           II.          For purposes of this Order, the term “IPOF” refers to IPOF L.P., IPOF Fund, IPOF Fund II, L.P., GSI and GSGI (which are collectively referred to as “IPOF”) and their respective direct or indirect subsidiaries, parents and other affiliates, all general and limited partners and investors, and their respective past, present and future employees, officers, directors, successors, predecessors, heirs and assigns and attorneys, and each of them.

           III.         For purposes of this Order, the term “Receiver” refers to Mark E. Dottore, in his capacity as Receiver of IPOF.

3

           IV.         For purposes of this Order, the term “Non-Settling Parties” refers to:

A.	all plaintiffs, defendants, counter-defendants, cross-defendants and third-party defendants, other than the INOC Released Parties, in the Receivership, Small and Amantea Actions; and
B.	any other person or entity that directly or through his/her/its counsel has been served with notice of the hearing on the Motion.

           V.          Each of the Non-Settling Parties is hereby permanently barred, enjoined and restrained from continuing, commencing, prosecuting, or asserting any claim against the INOC Released Parties arising out of the facts or circumstances alleged in the Receivership, Small or Amantea Actions or arising out of or relating in any way to the purchase or ownership of INOC stock by the IPOF Fund or any other entity created by, maintained by, or relating in any way to David Dadante, or the trading in, granting or exercising of options in, or alleged manipulation of INOC stock.

           VI.         The INOC Released Parties are hereby permanently barred, enjoined and restrained from commencing, prosecuting, or asserting any claim for indemnity or contribution for INOC’s liability to IPOF, or any similar claim where the injury to INOC is INOC’s liability to IPOF, against the Non-Settling Parties, arising out of or relating to the claims or allegations in the Receivership, Small or Amantea Actions.

           VII.        It is the Judgment of the Court that all claims against the INOC Released Parties in the Receivership, Small and Amantea Actions are hereby dismissed with prejudice.

           VIII.      Any judgment obtained by the Receiver or IPOF against any of the NonSettling Parties, or any party other than the INOC Released Parties, shall be reduced in accordance with applicable law.

4

           IX.        Neither INOC’s settlement with IPOF, nor any of the settlement’s terms or provisions, nor any of the negotiations or proceedings connected with it, nor any of the documents or statements referred to therein shall be:

A.	construed as or deemed in any judicial, administrative, arbitration or other type of proceeding to be evidence of a presumption, concession, or an admission by the INOC Released Parties of the truth of any fact alleged or the validity of any claim that has been, could have been, or in the future might be asserted in the Receivership, Small or Amantea Actions; or
B.	construed as a concession or an admission by the INOC Released Parties that IPOF has suffered any damage.

           X.          The Court shall have and retain jurisdiction over the parties for all matters related to the administration, interpretation, effectuation, or enforcement of this Order, the settlement agreement between and among INOC and IPOF and any related disputes.

           XI.         There is no just reason for delay in the entry of final judgment as to the INOC Released Parties, and the Court hereby directs the clerk to enter judgment dismissing with prejudice all claims against the INOC Defendants, specifically including INOC, Scott Dorfman, David L. Gansey, David Ellin, Larry C. Hanger and Robert Toner, Jr. pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.

           XII.        The clerk shall promptly serve copies of this Order upon all parties to this Action.

           XIII.       The Receiver shall promptly serve all other persons whom he believes may be subject to any provision of this Order, and shall, within thirty (30) calendar days from the date of entry of this Order, submit to this Court an affidavit identifying the name, address, date of service, and manner of service of each such Person he served with a copy of this Order in compliance with this provision.

5

	IT IS SO ORDERED.
Dated:
		Honorable Kathleen J. O’Malley
		United States District Judge

6

Exhibit “B” to Settlement Agreement

dated October 5, 2008

ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT

________________, an investor in IPOF FUND, L.P., IPOF II L.P., GSI, GSGI or any affiliate entity thereof ( collectively the “IPOF Fund”), as Releasor, on its own behalf and on behalf of each of its direct or indirect subsidiaries, parents, successors and other affiliates, general and limited partners and investors, and their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys, whether in a representative or individual capacity, in consideration of the sum of One Dollar and other good and valuable consideration received from INNOTRAC CORPORATION (INOC), the receipt whereof is hereby acknowledged, jointly and severally, fully and forever release and discharge, and covenant not to sue, any of INOC, Scott Dorfman, David L. Gansey, David Ellin, Larry C. Hanger, Peter Toner, Jr. and INOC’s direct or indirect subsidiaries, parents, successors and other affiliates, including but not limited to GSI Commerce, Inc. and its direct or indirect subsidiaries, parents, successors and other affiliates, and each of their respective past, present and future officers, directors, shareholders, affiliates, employees, agents and representatives, and their respective successors, predecessors, heirs and assigns and attorneys, whether in a representative or individual capacity, with respect to all manner of actions, causes of action, suits, debts, dues, charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages and expenses (including attorneys’ fees and costs) (collectively referred to as “Claims”) of any nature whatsoever, in law or equity, which Releasor or any of them have had, now have, or may in the future have, including but not limited to Claims that have been or could have been brought with respect to the facts or circumstances alleged in the Receivership, Small or Amantea Actions or which arise out of or relate in any way to the purchase or ownership of INOC stock by the IPOF Fund or any other entity created by, maintained by, or relating in any way to David Dadante, or the trading in, granting or exercising of options in, or alleged manipulation of INOC stock.

This Release may not be changed without the written consent of INOC or its successor.

This Release and the rights and obligations established therein shall be governed and construed by the laws of the State of Ohio.

IN WITNESS WHEREOF, Releasor has caused this Release to be executed on ______________, 2008, by:

		BY:
		(Print full name)
Witness:
	Notary Public

2

Exhibit “C” to Settlement Agreement

dated October 5, 2008

ESCROW AGREEMENT

This Escrow Agreement (the “Escrow Agreement”) is made and entered into as of the _____ day of ________ 2008, by and between Mark E. Dottore, as Receiver (“Receiver”) for IPOF L.P., IPOF Fund II, L.P., GSI, GSGI and any affiliated entity, all of which are referred to as “IPOF Fund” and __________________________, as escrow agent (the “Escrow Agent”) (together with Receiver, “Escrow Parties”).

WHEREAS, Receiver, on behalf of IPOF Fund, and Innotrac Corporation (“INOC”) entered into a settlement agreement dated October ____, 2008 (“Settlement Agreement,” attached hereto as Exhibit A);

WHEREAS, Paragraphs 3 and 5 of the Settlement Agreement requires INOC to pay One Hundred Thousand Dollars ($100,000.00) to the Receiver and for the Receiver to hold such funds in an escrow account;

WHEREAS, the Settlement Agreement further provides that the Receiver, on behalf of IPOF Fund, will receive certain merger consideration, including cash and stock, by reason of the sale of all shares of common stock of INOC held by IPOF Fund; and

WHEREAS, Receiver desires to establish escrow accounts and appoint the Escrow Agent in accordance with the terms hereof and the Escrow Agent has agreed to do so.

NOW THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, sufficiency of which is hereby acknowledged, the Escrow Parties hereby agree as follows:

1.             DEFINED TERMS

Except as defined in this section or as otherwise indicated in this Agreement, all capitalized terms used herein without definition shall have the meanings attributed to them in the Settlement Agreement. Moreover, each defined term stated in the singular shall include the plural and each defined term stated in the plural shall include the singular. The word “including” means “including but not limited to.”

1.1.           Deposit. The term “Deposit” shall mean the amount of One Hundred Thousand Dollars ($100,000.00), and all such additional cash and stock received by the Receiver as part of merger consideration in connection with the sale of all shares of common stock of INOC held by IPOF Fund to be deposited into the Escrow Account.

1.2.           Escrow Account. The term “Escrow Account” shall mean one or more segregated escrow accounts established pursuant to the terms of this Agreement, including any brokerage account established for the purpose of receiving and holding stock that is part of the Escrow Funds as defined herein.

1.3.           Escrow Funds. The term “Escrow Funds” shall mean all funds and stock or the proceeds of sale thereof held in the Escrow Account (including the Deposit and the Income), as such amounts may be reduced from time to time by Expenses permitted under this Escrow Agreement and any losses on the investments set forth in Section 3.3 hereof.

1.4.           Expenses. The term “Expenses” shall mean all reasonable costs and expenses incurred by the Escrow Account and the Escrow Agent (in its capacity as such) pursuant to this Escrow Agreement, including the reasonable compensation paid to the Escrow Agent pursuant to Section 4.2 hereof, the reasonable out of pocket costs and expenses incurred in preparing and circulating the records and reports pursuant to Section 4.3 hereof, any indemnification paid pursuant to Section 4.7.1 hereof, and any amounts reserved by the Escrow Agent pursuant to this Escrow Agreement for any of the foregoing.

1.5.           Income. The term “Income” shall mean the interest, earnings and other income on the Escrow Funds.

1.6.           Person. The term “Person” shall mean an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint-stock company, an escrow account, any unincorporated organization, a government or political subdivision thereof or any other entity or being of whatever kind.

1.7.           Termination Date. The term “Termination Date” shall mean the date on which all the Escrow Funds have been disbursed by the Escrow Agent pursuant to the terms of this Escrow Agreement.

1.8           Receivership Action. “Receivership Action” as used herein means the action captioned  Sheldon Gordon, et al. v. David Dadante, et al, Case No. 1:05 CV 2726, pending in the United States District Court for the Northern District of Ohio.

2.             APPOINTMENT OF ESCROW AGENT

2.1.           Appointment. Receiver hereby appoints and designates ______________ as Escrow Agent for the Escrow Account. The Escrow Agent hereby accepts such appointment and agrees to serve hereunder for the purposes and on the terms set forth in this Escrow Agreement.

3.             THE ESCROW FUNDS

3.1.           Deposit. Subject to any order of the Court entered in the Receivership Action directing otherwise as to any part of the Deposit, the Receiver shall cause the Deposit to be deposited into the Escrow Account when received in accordance with the Settlement Agreement, and shall additionally deposit all cash and stock received as merger consideration from the sale of INOC common stock held by IPOF Fund.

3.2.            Escrow Funds. The Escrow Agent shall accept and maintain the Escrow Funds in the Escrow Account. The Escrow Agent shall hold and dispose of the Escrow Funds in accordance with the terms of this Escrow Agreement.

3.3.           Investment of Escrow Funds. The Escrow Agent is directed and instructed to initially invest and reinvest the Escrow Funds in [the ___________Bank Time Demand Open Account]. Receiver may provide instructions changing the investment of the Escrow Funds (subject to applicable minimum investment requirements) by the furnishing of a written certification to the Escrow Agent; provided, however, that no investment or reinvestment may be made except the following:

2

3.3.1. Direct obligations of the United States of America or obligations the principal of and the interest on which are unconditionally guaranteed by the United States of America;

3.3.2. Certificates of deposit issued by any bank, bank and trust company, or national banking association with a total capital and surplus of at least $250,000,000 (including the Escrow Agent and its affiliates), which certificates of deposit are insured by the Federal Deposit Insurance Corporation or similar governmental agency; or

3.3.3. Any institutional money market fund or money market account offered by the Escrow Agent, including any institutional money market funds or money market account managed by the Escrow Agent or any of its affiliates.

3.3.4. If at any time that an investment decision must be made the Escrow Agent has not received a written certification from Receiver, the Escrow Agent shall invest the Escrow Funds, or such portion thereof as to which no written certification from Receiver has been received, in a Bank Time Demand Open Account or equivalent.

3.3.5. No investment by the Escrow Agent pursuant to this Escrow Agreement shall be made in any instrument or security that has a maturity of greater than ninety (90) days. Notwithstanding anything to the contrary contained herein, the Escrow Agent may, without notice to Receiver, sell or liquidate any of the foregoing investments at any time if the proceeds thereof are required for any disbursement of Escrow Funds permitted or required hereunder. All investment earnings shall become part of the Escrow Funds and investment losses shall be charged against the Escrow Funds. The Escrow Agent shall not be liable or responsible (except for its own misconduct) for loss in the value of any investment made pursuant to this Escrow Agreement, or for any loss, cost or penalty resulting from any sale or liquidation of the Escrow Funds. With respect to any Escrow Funds received by the Escrow Agent after three o’clock, p.m. New York, New York time, the Escrow Agent shall not be required to invest such funds or to effect any investment instruction until the next day upon which the banks in New York, New York are open for business.

3.3.6. Notwithstanding the foregoing, Escrow Agent may hold any stock received as part of the Merger Consideration and, as directed by the Receiver, sell such stock from time to time.

3.4.           Income. Income earned by the Escrow Funds shall be considered part of the Escrow Funds and shall be reinvested in accordance with the terms of Section 3.3.

3.5.           Disbursement of the Escrow Funds. The Escrow Agent shall promptly release and disburse Escrow Funds to such persons who are entitled to distribution under the terms of the Settlement Agreement only upon the occurrence of the following event:

3.5.1  The Receiver presents to the Escrow Agent a written certification in the form attached as Exhibit “B” to this Agreement stating: (i) that each of the conditions contained in Section 6(a) of the Settlement Agreement has been satisfied by the recipient of Escrow Funds to be disbursed as a result of such recipient having executed and delivered to the Receiver a release in the form of Exhibit B of the Settlement Agreement, (ii) that each of the conditions contained in Section 6(b) through (d) of the Settlement Agreement has been satisfied, and (iii) the amount to be disbursed to the particular recipient.

3

4.             ESCROW AGENT

4.1.           Duties. This Escrow Agreement expressly sets forth all the duties of Escrow Agent with respect to any and all matters pertinent hereto. The Escrow Agent is only authorized to take the actions specifically set forth in this Escrow Agreement. The Escrow Agent does not have any interest in the Escrow Funds but is serving as an escrow holder only and having only possession thereof.

4.2.           Compensation. The Escrow Agent shall be entitled to receive the compensation set forth in this Escrow Agreement for its services rendered as Escrow Agent under this Escrow Agreement and shall be entitled to reimbursement for its reasonable Expenses incurred in serving as Escrow Agent. All fees and Expenses to be paid to the Escrow Agent under this Escrow Agreement (including, without limitation, any amounts to be paid to Escrow Agent pursuant to Section 4.7.1) shall be paid from the Escrow Funds, and Receiver shall not be obligated to pay any fee or Expense under this Escrow Agreement. The Escrow Agent shall promptly (but in any case within 3 calendar days) notify Receiver of any disbursement of any portion of the Escrow Funds to itself.

4.3.           Records and Reports. The Escrow Agent shall maintain detailed accounts of all Expenses, receipts, disbursements, distributions, and other transactions relating to the Escrow Account and any Income accruing thereon, and such accounts, books, and records relating to the Escrow Account shall be available for inspection at reasonable hours by Receiver and INOC or its successor. The Escrow Agent shall establish a fiscal year for the Escrow Account (the “Fiscal Year”) and shall notify Receiver and INOC or its successor of the Fiscal Year after such establishment.  At monthly intervals and again within sixty (60) calendar days following the end of the Fiscal Year, the Escrow Agent shall deliver a written report to Receiver and INOC or its successor setting forth the receipts, disbursements, and distributions of the Escrow Account.

4.4.           No Implied Duties of Escrow Agent; Liability of Escrow Agent.

4.4.1.            The Escrow Agent undertakes to perform only such duties as are expressly set forth herein and no duties shall be implied. The Escrow Agent is not a principal, participant, or beneficiary in any transaction underlying this Escrow Agreement, is not a party to the Settlement Agreement, and shall have no responsibility for the content or application of the Settlement Agreement, except as expressly stated herein, or to determine or inquire into the happening or occurrence of any event or contingency, except as expressly stated herein.

4.4.2. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement other than this Escrow Agreement. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith in the absence of negligence, gross negligence, breach of fiduciary duty, or willful misconduct. The Escrow Agent’s sole responsibility shall be for the safekeeping, administration, investing, and disbursement of the Escrow Funds in accordance with the terms of this Escrow Agreement. The Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein. The Escrow Agent may rely upon any certificate, notice, instruction, request or other instrument, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein, which the Escrow Agent shall believe to be genuine and to have been signed or presented by the Person purporting to sign the same. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages (including lost profits), unless the Escrow Agent has been advised of the, likelihood of such loss or damage and regardless of the form of action. The Escrow Agent shall not be obligated to take any legal action or commence any proceeding in connection with the Escrow Funds, any account in which Escrow Funds are deposited, this Escrow Agreement or the Settlement Agreement, or to appear in, prosecute or defend any such legal action or proceeding. The Escrow Agent may consult legal counsel selected by it (subject to the prior approval of Receiver) in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute involving any party hereto. The Escrow Account shall promptly pay from the Escrow Funds, upon demand, the reasonable fees and expenses of any such counsel.

4

4.4.3. The Escrow Agent is authorized, after prior notice to the Receiver and INOC or its successor, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Escrow Funds, with reasonable determination by the Escrow Agent of such court’s jurisdiction in the matter or reasonable determination by the Escrow Agent of the appealability of such orders. If any portion of the Escrow Funds is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, after prior notice to the Receiver and INOC or its successor, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it (subject to the prior approval of Receiver and INOC or its successor) is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other Person by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

4.5           Resignation. The Escrow Agent may resign at any time upon giving Receiver and INOC or its successor Thirty (30) days prior written notice to that effect. In such event, the successor shall be such Person as shall be mutually selected by Receiver and INOC or its successor. The Escrow Agent shall deliver a true and correct copy of the records relating to the Escrow Account to its successor. It is understood and agreed that such resignation shall not be effective until the successor agrees to act hereunder; provided, however, that if no successor is appointed and acting hereunder within thirty (30) calendar days after such notice is given, the Escrow Agent may deliver and deposit the Escrow Funds into a court of competent jurisdiction. The Escrow Agent shall have no liability to Receiver or any other Person with respect to any suspension of performance or disbursement into court; specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of funds held in the Escrow Funds or any delay in or with respect to any other action required or requested of Escrow Agent. The retiring Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall pay all Escrow Funds to The successor Escrow Agent, after making copies of such records as the retiring Escrow Agent deems advisable and after deduction and payment to the retiring Escrow Agent of all reasonable fees and expenses (including court costs and attorneys’ fees) payable to or incurred by the retiring Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder. After any retiring Escrow Agent’s resignation, the provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Escrow Agreement. Any corporation or association into which Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the Escrow Account business of Escrow Agent’s corporate Escrow Account line of business may be transferred, shall be the Escrow Agent under this Escrow Agreement without further act.

4.6.           Removal. Receiver shall have the right at any time, with or without cause, to substitute a new Escrow Agent by giving thirty (30) days prior written notice thereof to the Escrow Agent and INOC or its successor then acting. The removed Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall pay all Escrow Funds to the successor Escrow Agent, after deduction and payment to the removed Escrow Agent of all reasonable fees and expenses payable to, and incurred by, the removed Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder as of the date of removal. After any Escrow Agent’s removal, the provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or committed to be taken by it while it was Escrow Agent under this Escrow Agreement.

5

4.7.           Indemnification

4.7.1.            Indemnification of Escrow Agent. From and at all times after the date of this Escrow Agreement, the Escrow Agent and each director, officer, employee, attorney, agent, and affiliate of Escrow Agent (collectively, the “Indemnified Parties”) shall be, to the fullest extent permitted by law, defended, indemnified and held harmless by the Escrow Account against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys’ fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, whether direct, indirect or consequential, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any Person, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any Person under any statute or regulation, including any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Escrow Agreement or any transactions contemplated herein, whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Indemnified Party shall have the right to be indemnified, defended or held harmless hereunder for any liability or losses caused by its own misconduct or by the breach by the Escrow Agent of this Escrow Agreement. The Escrow Agent shall have the right to select its own counsel (subject to the prior approval of Receiver), whose reasonable fees shall be paid as an Expense from the Escrow Funds. The obligations under this Section 4.7.1 shall survive any termination of this Escrow Agreement and the resignation or removal of the Escrow Agent. Any amount that the Escrow Account becomes liable to pay as a result of the obligations set forth in this Section 4.7.1 shall be paid from the Escrow Funds.

4.7.2.            Indemnification by Escrow Agent. The Escrow Agent shall indemnify, defend and hold harmless the Escrow Account and Receiver and INOC or its successor against any loss, liability, or expense (including without limitation, reasonable fees and disbursements of counsel) incurred as the result of breach of this Escrow Agreement, negligence, gross negligence, embezzlement, or other misappropriation of the Escrow Funds by the Escrow Agent, its officers, directors, employees, and agents, or other misconduct by the Escrow Agent, its officers, directors, employees, and agents. The Escrow Agent shall not use the Escrow Funds to make any payments due under this Section 4.7.2.

5.             MISCELLANEOUS

5.1.Termination. This Escrow Agreement shall terminate on the Termination Date; provided, however, that the obligations set forth in this Section 5.1 and Section 4.7 shall survive the termination of this Escrow Agreement. After one year following termination of the Escrow Account, the Escrow Agent may dispose of any records or reports concerning this Escrow Account and any transactions relating to it in accordance with the Escrow Agent’s established procedures, but in any event only upon ninety (90) calendar days prior written notice to Receiver and INOC or its successor. In the event that Receiver or INOC or its successor desires a copy of such records or reports, the Escrow Agent shall permit such person access to such records or reports for copying at such person’s sole expense prior to the Escrow Agent’s disposal of the same.

6

5.2.           Counterparts. This Escrow Agreement may be executed in multiple counterparts, all of which constitute a single agreement, and may be delivered by facsimile or email (as a ..pdf attachment), which facsimile or email (as a .pdf attachment) signature shall be deemed an original.

5.3.           Amendments and Modifications. This Escrow Agreement, along with the exhibits hereto (which exhibits are hereby incorporated by reference), contains all the terms agreed upon by the Escrow Parties with respect to the subject matter hereof. In the event that there is a conflict between this Escrow Agreement and the Settlement Agreement, this Escrow Agreement shall be enforceable over the conflicting provision or provisions of the Settlement Agreement. This Escrow Agreement may be amended or modified only by subsequent joint written instrument executed by Receiver and INOC or its successor, and if the amendment in any way affects the compensation, duties, or responsibilities of the Escrow Agent, by a duly authorized representative of the Escrow Agent. No waiver of any provision hereof or rights hereunder shall be binding upon Receiver or INOC or its successor unless evidenced by a signed writing.

5.4.           Enforceability. In the event that any one or more of the provisions contained in this Escrow Agreement shall be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Escrow Agreement shall be construed as if such invalid, illegal, or unenforceable provision did not exist.

5.5.           Notices. All notices required or authorized under this Escrow Agreement shall be in writing, (a) sent by facsimile (with receipt personally confirmed by telephone), electronically transmitted as a .pdf attachment to an email message, delivered by personal delivery, or sent by commercial delivery service or certified mail, return receipt requested, (b) deemed to have been given on the date faxed with receipt confirmed, the date the email transmission was sent, the date of personal delivery, or the date set forth in the records of the delivery service or on the return receipt, and (c) addressed to the Receiver and INOC or its successor, and to the Escrow Agent as follows:

To Escrow	[           ]
Agent:
With a copy to:	[           ]

5.6.           Headings. Titles, headings, or subheadings contained in this Escrow Agreement are included only for ease of reference and have no substantive effect.

5.7.           Governing Law. This Escrow Agreement shall be governed by and construed in accordance with the internal laws of the State of Ohio applicable to contracts made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

5.8.           Benefit of Agreement. Nothing in this Escrow Agreement, express or implied, confers on any Person, other than the Parties hereto and their successors and assigns hereunder, any benefit or any legal or equitable right, remedy or claim under this Escrow Agreement.  INOC is an intended third-party beneficiary of this Escrow Agreement with the right to enforce the provisions of this Escrow Agreement and to demand that the Receiver reasonably enforce the provisions of this Escrow Agreement.

7

5.9.           Confidentiality. Copies of all documents, notices, statements, and reports provided to any Escrow Party or other Person as permitted under this Escrow Agreement shall be provided on a confidential basis and shall be kept confidential by all other Escrow Parties or Persons unless such information is otherwise publicly available or unless such information is required by law to be released to any third party, provided, however, that any Escrow Party may share such information with their employees, agents, representatives, accountants, attorneys, and advisors subject to advising such Persons of the requirement that such information must be kept confidential. Notwithstanding the foregoing, nothing in this Paragraph shall prohibit Receiver from supplying to the appropriate judicial authority such documents, notices, statements, and reports as are required by that authority.

5.10.         Rights of the Parties. Nothing in this Escrow Agreement shall be interpreted as conferring upon any Escrow Party any rights to the Escrow Account or the Escrow Funds other than as may be set forth in the Settlement Agreement or this Escrow Agreement.

5.11.         Identifying Information. Receiver acknowledges that certain identifying information is being requested by the Escrow Agent in connection with the USA Patriot Act, Pub. L. 107-56 (the “Act”), and Receiver agrees to provide any information reasonably requested by the Escrow Agent in connection with the Act or any similar legislation or regulation to which the Escrow Agent is subject, in a timely manner.

5.12.         Force Majeure. No party to this Escrow Agreement shall be liable to any other party for losses arising out of, or the inability to perform its obligations under the terms of this Escrow Agreement, due to acts of God, which shall include, but shall not be limited to, fire, floods, strikes, mechanical failure, war, riot, nuclear accident, earthquake, terrorist attack, computer piracy, cyber-terrorism or other acts beyond the control of the parties hereto.

8

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be signed as of the date first above written:

Mark E. Dottore, Receiver

ESCROW AGENT

By:

Title:

9

Exhibit B

______________, 2008

[______________]

Re: Disbursement of Escrow Funds

Dear ____________:

I, Mark E. Dottore, Receiver for IPOF, L.P., IPOF Fund, IPOF Fund II, L.P. GSI, GSGI, and any affiliate thereof hereby certify that the conditions set forth in Section 6(b) through (d) of the Settlement Agreement dated October ___, 2008, between the Receiver and Innotrac Corporation (the “Settlement Agreement”) have been fully satisfied, and [name of individual] has executed and delivered to me a release, a copy of which is attached hereto, as required under Section 6(a) of the Settlement Agreement.

Please release $ _____ from the Escrow Funds in account no. ______in accordance with Section 3.5 of the Escrow Agreement, dated October ____, 2008, between Receiver and [_____________] (as escrow agent).

Please make the above-referenced transfer by wire transfer to the following account:

[INSERT ACCOUNT INFORMATION]

Mark E. Dottore, Receiver

EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

Parties:	innotrac Corporation,
	a Georgia corporation (“Employer”)
	6655 Sugarloaf Parkway
	Duluth, Georgia, 30097
	Scott D. Dorfman (“Executive”)
	8241 Nesbit Ferry RoadAtlanta, Georgia 30350
Date: October 5, 2008

Background:                          Employer is a third party provider of order processing, fulfillment and/or customer care services to e-commerce and other direct-to-consumer businesses (the “Business”).  Employer has entered into an agreement (the “Merger Agreement”) pursuant to which GSI Commerce, Inc., a Delaware corporation (“Parent”), upon the terms and subject to the conditions of the Merger Agreement, is expected to acquire all of the outstanding shares of capital stock of Employer, which currently employs Executive.  Subject to the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Employer desires to continue to employ Executive, and Executive desires to continue such employment, on the terms and conditions stated below (the “Agreement”).

INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual agreements stated below, Executive and Employer agree as follows:

1.  Employment and Term.   Employer hereby employs Executive, and Executive accepts such employment, subject to all of the terms and conditions of this Agreement, for a term beginning on the Closing and ending on December 31, 2011, unless sooner terminated in accordance with other provisions hereof (the “Term”). Subject to the terms and conditions of this Agreement, Executive’s employment with Employer is at will.  Notwithstanding any provisions of this Agreement to the contrary, Employer may not terminate Executive without Cause (as defined in Section 4.3.1 below), and Executive may not terminate or resign other than for Executive Cause (as defined in Section 4.3.2), death or disability (as provided in Section 4.1 and 4.2), at any time before the first anniversary of the Closing.

2.  Position and Duties.

2.1.Title and Responsibilities.  During the Term, Executive will serve as Executive in Transition of Employer.  In that capacity, Executive will have supervision over, and responsibility for, Employer’s account management function, consistent with the account management responsibilities Executive had in the one year period prior to the Closing and/or provide certain consulting services to Parent’s Chief Executive Officer or Chief Financial Officer regarding Employer’s account management function as may be reasonably requested by such individuals.

2.2.Other Responsibilities and Loyalty. Executive will also have such other responsibilities and duties consistent with his position or positions with Employer, as may from time to time be reasonably prescribed by Employer’s Board of Directors or Parent’s Chief Executive Officer or Board of Directors and as are generally consistent with the responsibilities Executive had in the one year period prior to the Closing.  Executive agrees to devote his full business time, attention and energies to the business and interests of the Employer during the Term and Executive will not accept any outside position without the prior written consent of the CEO or the Board.

2.3.Reporting.  Executive will report to, and be subject to the direction of, the Chief Executive Officer or Chief Financial Officer of Employer or any other senior officer of the Parent as may be designated by the Board of Directors of the Parent.

2.4.Policies and Practices.  The employment relationship between Employer and the Executive shall be governed by the policies and practices established by Employer and Employer’s Board of Directors as are applicable to senior management employees generally.  Executive acknowledges that he has received and carefully read and understood the Employer’s Code of Business Conduct and other governing policies, which will govern the terms and conditions of his employment with Employer, along with this Agreement.  In the event that the terms of this Agreement differ from or are in conflict with the Employer’s policies or practices or the Employer’s Code of Business Conduct, this Agreement will control.

2.5.Location.  Executive will perform the services Executive is required to perform pursuant to this Agreement at the Employer’s office, located in Duluth, Georgia or such other location in the greater Atlanta, Georgia area to which Employer may move its principal location (the “Office”); provided, however, that (i) Executive may from time to time perform services from his homes located in Georgia and Alabama, and (ii) Employer may from time to time require Executive to travel to other locations in connection with the Employer’s business, consistent with Executive’s travel prior to the Closing.  Notwithstanding the foregoing, Employer may require Executive to work from home.  Executive may also work remotely from locations outside the Office in a manner consistent with Executive’s past practices in the one year period prior to the Closing.

3.  Compensation, Benefits and Expenses.

3.1.Base Salary.   Employer will pay to Executive an annual base salary (“Base Salary”) of Four Hundred and Twenty-Five Thousand Dollars ($425,000).  Executive’s Base Salary will be payable in bi-weekly installments of $16,346.15 each gross, in accordance with Employer’s normal payroll practices as are applicable to employees generally, subject to payroll deductions and required withholdings.

3.2.Annual and Long-Term Incentives.  Except as specifically provided in Section 3.6, Executive will not be eligible to participate in any annual or long-term bonus, equity or other incentive plan of Employer or Parent now existing or established hereafter.

2

3.3.Benefits.

(a)           Subject to Section 3.2, Executive will be eligible to participate in any profit sharing, savings, health insurance, life insurance, group insurance, disability insurance, and other benefit plans or programs of Employer now existing, or established hereafter, and generally offered to similarly situated employees of Employer, subject to the terms and provisions thereof.  Executive acknowledges that Executive’s participation in the employee benefit plans or programs of Employer are subject to the terms and conditions of such plan or programs and that Employer may change its plans or programs.  Notwithstanding the foregoing, Executive will not be entitled to any severance benefits in connection with the termination of his employment, except to the extent set forth in this Agreement.

(b)           Subject to the terms and conditions of the applicable insurance policy and the applicable life insurance companies, in the event that Employer owns any insurance policies insuring the life of Executive, Executive shall be and is hereby granted, on the date of Closing, an option to have the policies assigned to him, in which event Executive shall pay all premiums that first come due under such policies of insurance after the date of Closing and Employer shall sign all paperwork reasonably required to transfer ownership of the policies to Executive and allow changes of beneficiaries to persons or entities designated by Executive.

3.4.Personal Time-off.   Executive will be eligible for paid personal time of 25 days per year, in accordance with Employer’s paid time off policy.

3.5.Expenses.  Employer will reimburse Executive for all actual, ordinary, necessary and reasonable expenses incurred by Executive in the course of his performance of services hereunder.  Executive will properly account for all such expenses.  Such reimbursement payments shall be made promptly, but in no event later than December 31 of the calendar year following the year in which such expense was incurred. Employer shall upon the Closing enter with SDD Holdings, LLC an aircraft charter agreement in the form attached hereto as Exhibit B, which Executive and Employer shall each keep in force and effect during full term of Executive employment.

3.6.Equity Award.

(a) Effective as of the Closing, Executive and Parent shall enter into a Restricted Stock Award Agreement in the form attached hereto as Exhibit C whereby Parent will grant to Executive under Parent’s 2005 Equity Incentive Plan (the “Equity Plan”) a restricted stock award (the “RSA”) of a number of shares of common stock of Parent equal to the quotient of $2.5 million divided by the average of the closing price of Parent’s common stock for the five business day period immediately prior to the date of Closing (the “Fair Market Value”) of the Parent’s common stock on the date of Closing (the “Restricted Shares”).  Except as otherwise provided in this Section 3.6, all of the Restricted Shares will vest on December 31, 2011and Executive will not be required to pay any consideration for the vested Restricted Shares other than the services rendered by Executive to Employer up to the date of vesting.  Upon any vesting, Executive will remit to Employer an amount of cash necessary to satisfy all payroll deductions and required income tax withholdings as are required by law to be paid by Executive, if any. Once such taxes are paid, Employer shall deliver or cause Parent or any transfer or escrow agent in actual or constructive possession of the Restricted Shares to deliver certificates for the Restricted Shares in accordance with the Equity Plan.

3

(b) If, prior to December 31, 2011, (i) Executive is terminated by Employer for any reason other than Cause (as defined in Section 4.3.1), or (ii) Executive’s employment is terminated pursuant to Section 4.1 (death) or Section 4.2 (disability) or Section 4.3.2 (Employer Breach), all Restricted Shares will vest immediately on such termination, provided that such termination constitutes a “separation from service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, if applicable.  Notwithstanding the foregoing, the Executive will pay to Employer an amount equal to the Fair Market Value of the Restricted Shares on the date of vesting less any applicable federal, state, local and foreign taxes paid by Executive if after the Restricted Shares vest in accordance with the immediately preceding sentence the Executive commits a material breach of his obligations set forth in Sections 7 or 8 hereto.  If, prior to December 31, 2011, Employer terminates Executive’s employment for Cause or Executive resigns or terminates his employment for reasons other than Employer Breach, death or disability, all Restricted Shares will be forfeited to Parent without the payment of any consideration by Parent or Employer.  The Restricted Shares will otherwise be governed by the terms of the Equity Plan and RSA agreement.

(c) Executive acknowledges and agrees that Section 83 of the Internal Review Code of 1986, as amended (the “Code”) taxes as ordinary income to him the fair market value of the Restricted Shares as of the date any restrictions on the shares lapse (that is, as of the date on which part or all of the shares vest), unless Executive timely files an election under Section 83(b).  Executive will be solely responsible for timely making an election under Section 83(b) in the event he chooses to do so.

(d) Employer warrants to Executive that (i) Executive is qualified in all respects to receive the RSA and all Restricted Shares, subject to the vesting requirements as set forth in this Agreement and the Equity Plan; (ii) the issuance of the RSA and Restricted Shares to Executive has received all requisite approvals contemplated by the documents governing the Equity Plan and no further consents or approvals are required; (iii) the issuance of the RSA and Restricted Shares to Executive has been duly authorized and validly issued by Parent, and are fully paid and nonassessable, and (iv) upon vesting, and subject to the vesting requirements set forth in this Agreement and the Equity Plan, the Restricted Shares will be free of all encumbrances and restrictions, including restrictions on transfer.

4. Termination.

4.1.Termination by Death.  If Executive dies, then this Agreement will terminate immediately and automatically, and Executive’s rights to compensation and benefits first earnable by Executive after the date of death  will terminate as of the date of death; provided, however, Executive’s heirs, personal representatives or estate will be entitled to receive any unpaid portion of Executive’s Base Salary and accrued benefits earned up to the date of termination and any benefits which are to be continued or paid after the date of termination in accordance with the terms of the corresponding benefit plans and programs in which Executive participates (the “Accrued Obligations”) and also the Restricted Shares.  In the event of a termination of Executive’s employment pursuant to this paragraph, any right that Executive’s estate may have to compensation and benefits under this Agreement will terminate, except that Executive’s estate will be entitled to receive payment of the Accrued Obligations.

4

4.2.Termination by Disability.   If, as a result of sickness or injury (as defined in Employer’s group long-term disability insurance policy then in force), Executive is unable to perform the essential duties of his employment on a full-time basis for more than thirty (30) days after the Onset of Disability or for periods aggregating more than thirty (30) days during any twelve (12) month period, then Employer may, upon ten (10) days written notice to Executive, terminate Executive's employment.  In the event of a termination of Executive’s employment pursuant to this Section 4.2, Executive’s right to compensation and benefits under this Agreement shall terminate, except that Executive shall be entitled to receive payment of the Accrued Obligations and the Restricted Shares.  “Onset of Disability” means the first day on which Executive is unable to perform the essential duties of his employment on a full-time basis by reason of such injury or sickness.

4.3.Termination for Cause.

4.3.1         Employer may, at any time, upon written notice to Executive, terminate Executive’s employment, and Executive’s rights to compensation and benefits hereunder, for Cause (as defined in this Section 4.3.1), except that Executive will be entitled to receive payment of the Accrued Obligations.  “Cause” will exist if Parent’s board of directors in good faith determines that (i) before the date of termination Executive is convicted of, or enters a plea of guilty or nolo contendere to, a crime constituting a felony or any criminal offense involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof other than an automobile offense, or (ii) Executive is grossly negligent or engaged in willful misconduct in the performance of his duties under this Agreement, or (iii) Executive breaches, in a material respect, this Agreement or any written material agreement between the Executive and Employer or violates, in a material respect, the Employer’s Code of Business Conduct or any of Employer’s material policy statements as are applicable to all employees generally; provided, however, that in the case of termination under clause (ii) or (iii) of the immediately preceding sentence, Cause shall only exist after (A) Employer delivers written notice to Executive of its intention to terminate for Cause within thirty (30) days after Employer has actual knowledge of the facts and circumstances upon which Employer seeks to rely as a basis for its right to terminate for Cause, (B) such notice sets forth in reasonable detail such facts and circumstances and (C) Executive has failed to cease or otherwise correct (if Parent’s board of directors determines in good faith that such events are reasonably capable of being corrected) any of the events listed in clauses (ii) and (iii), if such events are reasonably capable of being corrected, within thirty (30) days following delivery of Employer’s written notice of its intention to terminate for Cause.

5

4.3.2         Executive may, at any time, upon written notice to Employer, terminate Executive’s employment, and Executive’s rights to compensation and benefits hereunder, for Employer Breach (as defined in this Section 4.3.2), and Executive will be entitled to receive payment of the Accrued Obligations and the Restricted Shares.  “Employer Breach” will exist if there occurs a material failure by Employer to comply with the provisions of this Agreement; provided, however, the foregoing events of Employer Breach will exist only if Executive provides to Employer’s Chief Executive Officer notice of the existence of the circumstances constituting Employer Breach within ninety (90) days of the occurrence of Employer Breach and Employer does not remedy such event constituting Employer Breach within thirty (30) days of the date of its receipt of such notice.

4.4.Termination Without Cause.  At any time after the first anniversary of the Closing, Employer may, upon ten (10) days prior written notice to Executive, terminate Executive’s employment, and Executive’s rights to compensation and benefits hereunder, for any reason or no reason, in which case Executive will be entitled to payment of the Accrued Obligations and the Restricted Shares.

4.5.Resignation.  Executive may, upon thirty (30) days prior written notice to Employer, resign or terminate Executive’s employment with Employer, for any reason Executive deems appropriate, in which case Executive will be entitled to receive payment of the Accrued Obligations.

4.6.Release.  Notwithstanding the foregoing, Executive will not receive any of the payments set forth under Section 4, unless upon Executive’s termination of employment Executive furnishes Employer with an effective waiver and release of claims (the “Release”) in the form attached hereto as Exhibit “A” (or such other form of Release as may be required by the Employer) within the time period set forth therein, but in no event later than forty-five (45) days following termination of Executive’s employment.

4.7.Application of Section 409A.Fringe benefits payable under the Agreement will be subject to the distribution requirements of Section 409A(a)(2)(A) of the Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payment to the Executive be delayed until 6 months after separation from service if the Executive is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service.

6

4.8.Parachute Payments.  Anything in this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from Employer pursuant to this Agreement or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion of the Payment, up to and including the total Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Executive elects in writing a different order: reduction of cash payments; cancellation of accelerated vesting of the RSA; reduction of employee benefits.  If acceleration of vesting of the RSA compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the RSA.  Employer will appoint a nationally recognized and independent accounting firm to make the determinations required hereunder.  Employer shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to Employer and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by Employer or Executive) or such other time as requested by Employer or Executive.  If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish Employer and Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to such Payment.  Employer will be entitled to rely upon the accounting firm’s determinations, which will be final and binding on all persons.

5.  Procedure upon Termination.  Executive must promptly return to Employer all documents (including copies) and other materials and property belonging to Employer or Parent or any  of their affiliates, or pertaining to their businesses, including without limitation partner, customer and prospect lists, contracts, files, manuals, letters, reports and records in his possession or control, no matter from whom or in what manner acquired. In the event of a dispute between Executive and Employer, Executive and Employer each agree to exchange information and documents reasonably related to the dispute.

6.   Inventions.   Executive will reasonably communicate in a reasonable timeframe to Employer, in writing, all trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (collectively referred to as “Inventions”), whether or not patentable or registrable under copyright or similar statutes, which are first made, conceived and reduced to practice by Executive, whether alone or jointly with others, at any time   during the period commencing after the Closing  and ending on the date of termination of Executive’s employment, and which relate to the business or operations of Employer or which relate to methods, designs, products or systems sold, leased, licensed or under development by Employer (such concepts, ideas and designs are referred to as “Employer Inventions”).  Executive acknowledges that Employer owns all right, title and interest in and to any and all Employer Inventions (and all Proprietary Rights with respect thereto) created either before or after Closing and hereby assigns and agrees to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to Employer (or to such third party as Employer may direct) all of Executive’s right, title and interest in and to any and all Employer Inventions (and all Proprietary Rights with respect thereto).  Executive acknowledges that all original works of authorship which are first made by Executive (solely or jointly with others), within the scope of Executive’s employment and which are protectable by copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101).  Executive will, at Employer’s expense, sign all documents and take such other actions as Employer may reasonably request to confirm its ownership in Employer Inventions.  “Proprietary Rights” means all trade secret, patent, copyright, mask work and other intellectual property rights throughout the world.

7

7.   Nondisclosure.  At all times after the Closing and during Executive’s employment with Employer and thereafter, except with the express prior written consent of an executive officer of Employer other than Executive or in connection with the proper performance of services under this Agreement, Executive will not, directly or indirectly, communicate, disclose or divulge to any Person, or use for the benefit of any Person, any Proprietary Information or any Third Party Information.  “Proprietary Information” means any and all confidential and/or proprietary knowledge, data or information of Employer or Parent or any of their affiliates, no matter when or how acquired.  By way of illustration, but not limitation, Proprietary Information includes (i) Inventions; (ii) the terms and details of contracts and arrangements with and proposals to any customers of Employer or its affiliates (“Customers”) and any prospective Customers or any entities for which Parent or its affiliates operate e-commerce businesses or provide marketing services (“Partners”) and any prospective Partners; (iii) personal, financial and other information obtained from customers of Customers or Partners (“Consumers”); (iv) non-public pricing information, vendor prices, buying and pricing strategies and merchandise plans, including the terms of contracts and arrangements with vendors; (v) promotional, marketing and advertising strategies and plans, including the terms of contracts and arrangements relating to promotions, marketing and advertising; (vi) non-public financial and statistical information relating to Employer or Parent or any of their affiliates, or the Business operated by Employer and its affiliates or the business and the e-commerce businesses operated by Parent and its affiliates, including budgets, financial and business forecasts, expansion plans and business strategies; and (vii) information regarding the skills and compensation of other employees of Employer and Parent and their  affiliates.  For purposes of this Section 7, Proprietary Information will not include any information which is now known by or available to the general public or generally in the industry, which becomes known by or available to the general public or generally in the industry other than as a result of a breach of this Agreement by Executive or which is independently acquired by Executive.  “Person” means any individual, sole proprietorship, joint venture, partnership, corporation, association, cooperative, trust, estate, government body, administrative agency, regulatory authority or other entity of any nature.  “Third Party Information” means any and all confidential or proprietary data, knowledge and information received from third parties, including Customers and Partners, prospective Customers and Partners and Consumers, subject to a duty on the part of Employer or Parent or any of their affiliates to maintain the confidentiality of such data, knowledge or informationand to use it only for certain purposes.

8.   Non-Competition.   Executive acknowledges that the Business of Employer and its affiliates and the business of Parent and its affiliates are highly competitive, that he has Proprietary Information of Employer and its affiliates and Third Party Information of their Customers and Consumers and that as a result of Employer being acquired by Parent, Executive will receive and be privy to Proprietary Information of Parent and its affiliates and Third Party Information of their Partners and Consumers.  Executive further acknowledges that Employer and Parent and their affiliates are engaged in the provision of services to support the e-commerce and direct-to-consumer businesses of their Customers and Partners and that due to the nature of such businesses, the work performed by Executive for Employer may not be bound by any geographical or territorial limitations.  Accordingly, for one (1) year after the date of the termination of Executive’s employment with Employer (the “Restricted Period”) for any reason, except with Employer’s express prior written consent, Executive will not, directly or indirectly, in any capacity, for the benefit of any Person:

8

(a) Communicate with or solicit any Person who, as of or during the one (1) year prior to the termination of Executive’s employment with Employer, was an employee, consultant, agent or representative of Employer or Parent or any of their affiliates, or who, during the Restricted Period, becomes an employee, consultant, agent or representative of Employer or Parent or any of their affiliates, (i) in any manner which interferes or is likely to interfere with such Person’s relationship with Employer or Parent or any such affiliate, or (ii) in an effort to obtain any such employee, as an employee, of any other Person or (iii) in an effort to obtain any such consultant, agent or representative as a consultant, agent or representative of any Person which conducts a business competitive with all or any material part of the Business of Employer or its affiliates in the United States or the business of the Parent and its affiliates in the United States;

(b) Communicate with or solicit any Person who, as of or during the one (1) year prior  to the termination of Executive’s employment with Employer, was a Partner, Customer, client or prospect of Employer or Parent or any of their affiliates, or who, during the Restricted Period, becomes a Partner, Customer, client or prospect of Employer or Parent or any of their affiliates, in any manner which interferes or is likely  to interfere with such Person’s relationship with Employer or Parent or any such affiliate, or in an effort to obtain any such a Partner, Customer, client or prospect as a partner, customer, client or prospect of any other Person which conducts a business competitive with all or any material part of the Business of Employer in the United States, or its affiliates or the business of Parent and its affiliates in the United States; or

(c) Establish, own, manage, operate or control, or participate in the establishment, ownership, management, operation or control of, or be a director, officer, employee, agent or representative of, or be a consultant to, any Person which conducts a business competitive with all or any material part of the (i) Business of Employer or its affiliates in the United States, or (ii) business of Parent or its affiliates in the United States which is substantially similar to the Business of the Employer, or which is not substantially similar to the Business of the Employer but in which Executive was involved during his employment with the Employer after the Closing Date.

9

9.  Consideration and Enforcement of Covenants.   Executive expressly acknowledges that the covenants contained in Sections 6, 7 and 8 of this Agreement (“Covenants”) are a material part of the consideration bargained for by Employer and, without the agreement of Executive to be bound by the Covenants, Employer would not have agreed to enter into this Agreement.  Executive acknowledges that any breach by Executive of any of the Covenants may result in irreparable injury to Employer for which money damages may not adequately compensate.  If there is such a breach, Employer will be entitled, in addition to all other rights and remedies which Employer may have at law or in equity, to apply to any competent court in Georgia to have an injunction issued enjoining and restraining Executive and all other Persons involved therein from continuing such breach.  The existence of any claim or cause of action which Executive or any such other Person may have against Employer will not constitute a defense or bar to the enforcement of any of the Covenants.  If Employer must resort to litigation to enforce any of the Covenants which has a fixed term, then such term will be extended for a period of time equal to the period during which a breach of such Covenant was occurring, beginning on the date of a final court order (without further right of appeal) holding that such a material breach occurred or, if later, the last day of the original fixed term of such Covenant. If any portion of any Covenant or its application is construed to be invalid, illegal or unenforceable, then the other portions and their application will not be affected thereby and will be enforceable without regard thereto.  If any of the Covenants is determined to be unenforceable because of its scope, duration, geographical area or similar factor, then the court making such determination will have the power to reduce or limit such scope, duration, area or other factor, and such Covenant will then be enforceable in its reduced or limited form.

10. Survival of Obligations.  Notwithstanding anything to the contrary contained herein, Sections 3.5 and 3.6, Sections 5-22 of this Agreement will survive any termination of this Agreement and the termination of the Employment Term.  Additionally, payments and benefits owed to Executive under Sections 3 and 4 hereof shall survive the termination of this Agreement to the extent provided for in Sections 3 and 4.

11. Applicable Law.  This Agreement will be governed by and construed in accordance with the substantive laws (and  choice of laws rules) of the State of Georgia .  Each of the parties irrevocably consents to the jurisdiction and venue of the state courts in Fulton County, Georgia and the federal courts in the Northern District of Georgia in any and all actions between the parties arising hereunder and agrees to resolve all such disputes in such courts.

12. Notices.   All notices, consents or other communications required or permitted to be given under this Agreement must be in writing and will be deemed to have been duly given (i) when delivered personally, or (ii) one (1) business day after being sent by a nationally recognized express courier service designated for next business day delivery, postage or delivery charges prepaid, to the parties at their respective addresses stated on the first page of this Agreement.  Either party may change its address for notice and the address to which copies must be sent by giving notice of the new address to the other party in accordance with this Section 12, provided that any such change of address notice will not be effective unless and until received.  A copy of any notice sent to Executive shall be sent in the same manner of delivery to: David F. Cooper, Esq., Kitchens Kelley Gaynes, P.C., 11 Piedmont Center, Suite 900, 3495 Piedmont Road, NE, Atlanta, Georgia 30305.

10

13. Prior Agreements.  Executive represents to Employer (a) that there are no restrictions, agreements or understandings whatsoever to which Executive is a party which would prevent or make unlawful his execution of this Agreement or his employment hereunder, (b) that Executive’s execution of this Agreement and Executive’s employment hereunder do not constitute a breach of any contract, agreement or understanding, oral or written, to which Executive is a party or which Executive is bound, and (c) that Executive has full legal right and capacity to execute this Agreement and to enter into employment by Employer.  All prior employment agreements, oral or written, between Executive and Employer that have not previously expired or terminated are hereby terminated as of the date hereof as fully performed on both sides; provided, Executive shall be entitled to receive after the Closing any unpaid consideration due Executive on account of agreements entered between Executive and Employer pre-Closing, including any amounts held in the Employer’s Rabbi Trust or bonus plan prior to Closing that the Executive is entitled to receive.

14. Parties in Interest.   This Agreement is for the personal services of Executive and is not be assignable by Employer without the express prior written consent of the Executive.  Because of the unique and personal nature of the Executive’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement is assignable by the Executive.  This Agreement is not intended and shall not be construed to confer any rights or remedies hereunder upon any Person other than the parties hereto, provided, however, that the Parent shall be a third party beneficiary entitled to receive the benefit of and enforce Sections 3.6, 5 through 9, 15 and 16 hereof as if such entities had been a party to this Agreement.

15. Trade Secrets of Others.   It is the understanding of both the Employer and the Executive that the Executive will not divulge to the Employer or Parent or any of their affiliates any confidential information or trade secrets belonging to others.  Consistent with the foregoing, the Executive will not provide to the Employer or its affiliates any documents or copies of documents containing such information.

16. Advertising Waiver.   The Executive agrees to permit the Employer and Parent and their affiliates, and Persons or other organizations authorized by the Employer or Parent or their affiliates, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Employer and Parent and their affiliates in which the Executive’s name and/or pictures of the Executive appear and are cast in a positive manner.  The Executive hereby waives and releases any claim or right the Executive may otherwise have arising out of such use, publication or distribution.

17. Entire Understanding.   This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous, oral or written, express or implied, agreements and understandings.

11

18. Amendment and Waiver.   This Agreement may not be amended or modified unless in writing and signed by Executive, a duly authorized representative of Employer other than Executive and, prior to Closing, the written consent of Parent.  No waiver with respect to this Agreement will be enforceable unless in writing and signed by the party against which enforcement is sought (which, in the case of the Employer, must be a duly authorized representative of Employer other than Executive).  Neither the failure nor any delay on the part of either party to exercise any right, remedy, power or privilege under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor will any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.

19. Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument.

20. Severability.  The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal.  Such court shall have the discretion authority, if any, to modify or replace the invalid or unenforceable term or provision with a valid and enforceable and reasonable term or provision.

21. Section Headings, Interpretation, Construction.   Any headings preceding the text of any of the Sections or Subsections of this Agreement are inserted for convenience of reference only, and will neither constitute a part of this Agreement nor affect its construction, meaning, or effect. This Agreement has been drafted by legal counsel representing the Employer, but the Executive has been encouraged to consult with, and has consulted with, the Executive’s own independent counsel and tax advisors with respect to the terms of this Agreement.  Each party acknowledges that it and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

22.           Furniture and Memorabilia.  Notwithstanding Section 5, at any time after the Closing, Executive shall be permitted to remove (i) all of his personal property from Employer’s offices including all personal memorabilia and business memorabilia collected by Executive in connection with business transacted prior to the date of Closing, and (ii) his HP 2510 personal laptop computer and all office furniture located in the Executive’s office in Duluth, Georgia as of the Closing.  After termination of Executive’s employment with the Company the Company agrees at the cost and expense of Executive to transfer the Executive’s cell phone telephone number to Executive.  To the extent that there is data of Employer located on Executive’s  computer or other electronic device, Executive shall after the termination of his employment be entitled to retain his personal Microsoft Outlook list of contacts and Executive will work in good faith with Employer to transfer or from Executive’s computer Proprietary Information of Employer.

12

IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first stated above.

INNOTRAC CORPORATION

By:	/s/ George M. Hare	/s/ Scott Dorfman
	George M. Hare	Scott Dorfman

13

EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

In consideration of the benefits and mutual agreements set forth in the Employment Agreement, dated October 6, 2008 (the “Agreement”), between Innotrac Corporation (“Employer”)and Scott D. Dorfman (“Executive”), to which this form is attached, Executive, intending to be legally bound, agrees to the following release and waiver (“Release and Waiver”):

In exchange for the consideration provided to Executive by the Agreement that Executive is not otherwise entitled to receive and the other commitments of Employer in the Agreement, Executive and his or her heirs, representatives, agents and attorneys hereby generally and completely release Employer and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct or omissions occurring prior to Executive signing this Release and Waiver.  This general release includes, but is not limited to: (1) all claims arising out of or in any way related to Executive’s employment with Employer or the termination of that employment; (2) all claims related to Executive’s compensation or benefits from Employer, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in Employer; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and similar state laws.  Notwithstanding the foregoing, this general release specifically excludes any and all claims that Executive may have in regard to (a) any ongoing severance or employment obligations of Employer to Executive under the Agreement or any other written agreement or arrangement between Employer and Executive, (b) any ongoing obligations of Employer to Executive under any written stock option agreement, restricted stock award agreement, restricted stock unit award agreement or other equity award agreement evidencing an option or other equity award granted or awarded by Employer to Executive, (c) any indemnification obligations of Employer to Executive as a former director, officer and/or employee of Employer or any of its subsidiaries pursuant to Employer’s certificate of incorporation or bylaws or any indemnification or other written agreement, (d) any rights Executive may have under any directors and officers liability insurance policy of Employer, including tail insurance, and (e) any rights Executive may have arising by virtue of his status as a stockholder of Employer.

Executive acknowledges that, among other rights, he or she is waiving and releasing any rights he or she may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which he or she was already entitled as an executive of Employer.  Executive further acknowledges that he or she has been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) he or she should consult with an attorney prior to executing this Release and Waiver; (c) he or she has twenty-one (21) days in which to consider this Release and Waiver (although he or she may choose voluntarily to execute this Release and Waiver earlier); (d) he or she has seven (7) days following the execution of this Release and Waiver to revoke his or her consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the eighth day after he or she executes this Release and Waiver and the revocation period has expired (the “Effective Date”).

This Release and Waiver, including any referenced documents, constitutes the complete, final and exclusive embodiment of the entire agreement between Employer and Executive with regard to the subject matter hereof.  Executive is not relying on any promise or representation by Employer that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both Executive and a duly authorized officer of Employer.

Date: By:

2

Exhibit B

AIRCRAFT USE AGREEMENT

This Aircraft Use Agreement (“Agreement”) is dated as of [                ], 2008 (the “Effective Date”) and is by and between SDD Holdings, Inc. (hereinafter called “Owner”), and Innotrac Corporation (hereinafter called “Client”).

WITNESSETH:

1.	Aircraft Availability:
	Owner hereby makes available to Client up to 24 occupied flight hours per month (collectively, “Flight Hours”) in a certain Pilatus aircraft, serial number 388, FAA Registration number N388PC (hereinafter called “Aircraft”) subject to the terms and conditions set forth herein.  To the extent Client does not utilize 24 Flight Hours during any calendar month, such unused hours may be carried over to the following month (“Unused Flight Hours”); provided that all Unused Flight Hours shall expire at the end of the Term.
2.	Term:
	The term of this Agreement shall commence on the Effective Date and continue until the termination or expiration of the Employment Agreement dated October 5, 2008, by and between Scott Dorfman and Innotrac Corporation f (“Term”).  Notwithstanding the foregoing, Client may terminate this Agreement (and thereafter have no further liability for the Monthly Basic Charge or Hourly Fee, both as defined on Appendix “A”) if Scott D. Dorfman’s employment by Client is terminated “for cause” or he resigns.
3.	Payment:
	Client agrees to pay Owner in accordance with the terms set forth in Appendix “A” to this Agreement.
4.	Custody of Aircraft:
	Aircraft used by Client under this Agreement shall remain under the custody of Owner at all times.  Owner may use the Aircraft for purposes other than the business of the Client when such use will not interfere with the scheduling needs of Client.  Owner will provide (at its cost) hangar storage for the Aircraft at Peachtree-Dekalb Airport, Atlanta, Georgia.
5.	Maintenance:
	During the term of this Agreement, Owner shall, at its own cost and expense, maintain the Aircraft in a safe and properly-equipped condition, and shall perform all repairs, inspections, and maintenance to keep it in an airworthy condition in accordance with applicable laws and regulations, including, without limitation, all applicable FAR’s and all other applicable D.O.T. and FAA regulations.  Without limiting the foregoing, Owner shall be responsible for undertaking and completing any and all scheduled and unscheduled maintenance and repair procedures, either calendar or hourly, during the Term at Owner’s sole cost and expense.  Other than the payment of the Monthly Basic Charge and Hourly Fee, Client shall have no obligation whatsoever with regard to the use, operation, or maintenance of the Aircraft.

6.	Fuel:
	Owner, at its own cost and expense, shall provide all fuels and lubricants as may be required for the operation of the Aircraft for all flights conducted for the benefit of Owner or Client.
7.	Pilots and Other Carrier-provided Personnel:
	Owner shall furnish qualified flight crews for the operation of the Aircraft for Client at the expense of Owner and shall oversee both the initial and ongoing training of the pilots.  The pilots and other personnel furnished by Owner hereunder shall be the employees of Owner, and not Client, and Owner accepts full and exclusive liability for the payment of worker’s compensation or employer’s insurance premiums with respect to such personnel, and for payment of all taxes, contributions and other payments required by law with respect to such personnel.
8.	Insurance:
	During the term of this Agreement, Owner, at its own cost and expense, shall provide and maintain the following insurance coverage on the Aircraft used by Client: Combined single limit of liability for bodily injury, passenger and property damage liability of not less than $5,000,000 and a non-owner policy with a single limit of liability for bodily injury, passenger and property damage liability of not less than $25,000,000.  In the case of the non-owner insurance policy, Owner will name each of (Client and the Client’s affiliates) as additional named insureds.  Owner will cause a certificate of insurance for each coverage required to be maintained hereunder to be issued to Client promptly following execution of this Agreement.  Owner will at all times comply with all representations, warranties, and other terms and conditions of each policy of insurance required hereunder.
9.	Fees and Taxes:
	Sec Appendix “A”.

2

10.	Scheduling:
	a.	Client understands that under this Agreement, scheduling of the Aircraft will be done on a first-come first-served basis.
	b.	Every effort will be made by Owner to accommodate the aircraft scheduling of Client.  Availability of crews and aircraft will normally be subject to notification of requirement to Owner by Client at least twenty four (24) hours prior to schedule departure time, although Owner will make its best effort to accommodate flight requests made with less than 24 hours notice.  No charges shall be made by Owner for cancelled reservations.
	c.	Any request to the Owner for services provided in this Agreement shall be made only by an authorized representative of Client.  Questions regarding the qualification of any individual to make flight arrangements under this Agreement shall be referred to Scott D. Dorfman.
11.	Monthly Reports:
	Owner will maintain and provide to Client, a log for each flight, containing the date, name of the person authorizing the flight, date of flight, a list of passengers, points of travel and such other information as Client may from time to time reasonably request.
12.	Prior Agreements:
	All prior agreements between Owner and Client (including any lease agreements) respecting the Aircraft are hereby superseded and replaced by this Agreement and all unsatisfied obligations of the parties under all such prior agreements shall be deemed waived and released as of the date of this Agreement.
13.	Governing Law:
	This Agreement shall be governed by the internal laws of the State of Georgia without reference to any conflicts of law provisions.
14.	Assignment:
	Neither party may assign or delegate this Agreement or assign its rights, delegate its obligations or otherwise subcontract the services to be provided hereunder without the prior written approval of the other party.

3

15.	Entire Agreement:
	This Agreement contains the entire understanding between the parties in respect of its subject matter and may be amended only by a written instrument duly executed by the parties hereto or their respective assigns.  Any provision of this Agreement that is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.  This Agreement may be executed in duplicate counterparts, either of which shall constitute the executed Agreement if the other be not produced.
16.	Acknowledgements:
	The parties hereto do not intend that this Agreement be construed as a lease agreement but in the event a court of competent jurisdiction were to conclude otherwise then, and only then, the following paragraphs shall apply:
	a.	Owner certifies that the Aircraft presently complies with applicable FAA maintenance and inspection requirements and that the Aircraft has been maintained for the last twelve (12) months and inspected under Part 91 of the Federal Aviation Regulations.  Owner certifies that the Aircraft will be maintained and inspected under Part 91 of the Federal Aviation Regulations for operations to be conducted under this Agreement for the duration of this Agreement.
	b.	Owner, with an address of 6655 Sugarloaf Parkway, Duluth, GA 30097, certifies that it is responsible for operational control of the Aircraft under this Aircraft Use Agreement during the term hereof and that it understands its responsibility for compliance with applicable Federal Aviation Regulations.
	c.	Owner understands that an explanation of factors bearing on operational control and pertinent FAA regulations can be obtained from the nearest FAA Flight Standards District Office, General Aviation District Office, or Air Carrier District Office.
	d.	Owner agrees to keep a copy of this Aircraft Use Agreement in the Aircraft at all times during the Client’s use, and during the term of this Agreement.
17.	Notices:
	All notices required under this Agreement shall be deemed given if sent by national overnight courier, telecopy or PDF to:

4

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the day and year first above written.

Owner:		Client:
	SDD Holdings, Inc. c/o Scott Dorfman Innotrac Corporation 6655 Sugarloaf Parkway Duluth, GA 30097	Innotrac Corporation 6655 Sugarloaf Parkway Duluth, GA 30097 Attn: Arthur Miller, Esquire
By:		By:
Title:		Title:
Date:		Date:

5

Aircraft Use Agreement

Appendix “A”

1.	Basic Monthly Charges:
	a.	The basic charge during the Term of this Agreement shall be $7,000 per month (“Monthly Basic Charge”), payable beginning on the Effective Date, and continuing on the 1st business day of each month thereafter as provided for in Section 2 of the Agreement.
	b.	In addition to the Monthly Basic Charge, Client shall also pay Owner the sum of $1,250 per occupied flight hour (“Hourly Fee”) not to exceed 24 hours per month.  Subject to the provisions of Section 2 of the Agreement, Client agrees to pay Owner the Hourly Fee multiplied by 24 for each month during the Term regardless of whether Owner actually utilizes the Aircraft for 24 occupied flight hours during any given month.
	c.	An “occupied hour” is defined as an Aircraft flight hour, measured from lift-off to touch-down, flown at the Client’s request from a point specified by the Client to another point specified by the Client, whether or not the Client is on board the Aircraft.
	Except for the Monthly Basic Charge and the Hourly Fee, Client shall have no other monetary obligation to Owner whatsoever and Owner shall be responsible for all costs and expenses associated with the Aircraft including, without limitation, all fuel costs, landing fees, catering charges, ground transportation, international fees and all FET or sales taxes arising from the Monthly Basic Fee or Hourly Fee.

	Accepted:
For:	SDD Holdings, Inc.	For:	Innotrac Corporation
By:		By:
Title:		Title:
Date:		Date:

6

Exhibit C

GSI Commerce, Inc.

2005 Equity Incentive Plan

Restricted Stock Award Agreement

Pursuant to your Restricted Stock Award Grant Notice (“Grant Notice”) and this Restricted Stock Award Agreement (the “Agreement”), GSI Commerce, Inc. (the “Company”) has granted you a Restricted Stock Award under Section 7(b) of its 2005 Equity Incentive Plan (the “Plan”) to acquire the number of shares of the Company’s Common Stock indicated in the Grant Notice (collectively, the “Award”).  Defined terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.

 The Company agrees as follows with respect to the Award:

1. Delivery of Shares of Common Stock.  Your acquisition of the shares of Company common stock that are the subject of the Award and referenced as “Restricted Share” in your Employment Agreement (the “Employment Agreement”) with the Company of even date herewith (the “Shares”) shall be consummated as follows:

(a) Subject to vesting, you will become entitled to the Shares by delivering your Grant Notice, executed by you in the form attached hereto, to the Stock Plan Administrator of the Company, or to such other person as the Company may designate, during regular business hours.

(b) The Company shall direct the transfer agent for the Company to deliver to the Escrow Agent pursuant to the terms of Section 8 below the certificate or certificates evidencing the Shares to be acquired by you.  You acknowledge and agree that (i) until vesting occurs any such Shares shall be held in book entry form directly registered with the transfer agent or such other form and (ii) upon vesting, as the Company may reasonably determine.

2. Consideration.  The Shares to be acquired by you on the “Date of Grant” indicated on your Grant Notice shall be deemed paid, in whole or in part, in consideration of your services to the Company pursuant to your Employment Agreement in the amounts and to the extent required by your Employment Agreement and applicable law and your entry into noncompetition covenants with the Company.

3. Vesting.  Subject to the limitations contained herein and in the Plan, the Shares will be earned by you upon vesting as provided in your Grant Notice and Employment Agreement provided that vesting will cease after the termination of your Continuous Service in accordance with your Employment Agreement.  Shares acquired by you that have vested in accordance with the Vesting Schedule referenced or set forth in the Grant Notice and this Section 3 are “Vested Shares.”  Shares acquired by you pursuant to this Agreement that are not Vested Shares are “Unvested Shares.”

4. Number of Shares.  The number of Shares subject to your Award as referenced in your Grant Notice shall be adjusted from time to time for capitalization adjustments as set forth in the Plan.

5. Conditions to Issuance and Delivery of Shares.  The Company will not be obligated to issue or deliver any Shares pursuant to this Agreement (i) until all conditions to the Award as set forth in the Plan have been satisfied, waived or removed, (ii) if the outstanding Common Stock is at the time listed on any stock exchange or included for quotation on an inter-dealer system, until the Shares have been listed or included or authorized to be listed or included on such exchange or system upon official notice of notice of issuance.

6. Right of Reacquisition.  The Company shall simultaneously with the termination of your Continuous Service automatically reacquire (the “Reacquisition Right”) for no consideration all of the Shares that are Unvested Shares on the day after the termination of your Continuous Service, unless theCompany agrees to waive its Reacquisition Right as to some or all of the Unvested Shares.  Any such waiver shall be exercised by the Company by written notice to you or your representative (with a copy to the Escrow Agent, as defined below) within ninety (90) days after the termination of your Continuous Service, and the Escrow Agent may then release to you the number of Unvested Shares not being reacquired by the Company.  If the Company does not waive its reacquisition right as to all of the Unvested Shares, then upon such termination of your Continuous Service, the Escrow Agent shall transfer to the Company the number of Unvested Shares the Company is reacquiring.  The Reacquisition Right shall expire when all of the Shares have become Vested Shares in accordance with Section 3.

7. Corporate Transaction.  In the event of a Corporate Transaction, the treatment of your Award will be governed by the provisions of Section 12(c) of the Plan, which may include the ability of the Company to assign the Reacquisition Right to its successor (or the successor’s parent company), if any, in connection with the transaction.  In addition, to the extent the Reacquisition Right remains in effect following such transaction, it shall apply to the new capital stock or other property received in exchange for the Common Stock in consummation of the transaction, but only to the extent the Common Stock was at the time covered by such right.

8. Escrow of Unvested Common Stock.  As security for your performance of the terms of this Agreement and to insure the availability for prompt delivery of the Shares upon vesting or, if applicable, execution by Company of its Reacquisition Right provided in Section 6 above, you agree to the following “Joint Escrow” and “Joint Escrow Instructions,” and you and the Company hereby authorize and direct the Chief Financial Officerof the Company (“Escrow Agent”) to hold the documents delivered to Escrow Agent pursuant to the terms of this Agreement and of your Grant Notice and Employment Agreement, in accordance with the following Joint Escrow Instructions:

(a) In the event your Continuous Service with the Company or an affiliate of the Company (an “Affiliate”) terminates, the Company shall, pursuant to the Reacquisition Right in Section 6 above, automatically reacquire for no consideration all Unvested Shares, within the meaning of Section 3 above, as of the date of such termination, unless the Company elects to waive such right as to some or all of the Unvested Shares.  If the Company (or its assignee) elects to waive the Reacquisition Right, the Company or its assignee will give you and Escrow Agent a written notice specifying the number of Unvested Shares not to be reacquired. You and the Company hereby irrevocably authorize and direct Escrow Agent to close the transaction contemplated by such notice as soon as practicable following the date of termination of your Continuous Service in accordance with the terms of this Agreement and your Employment Agreement.

- 2 - -

(b) Vested Shares upon the payment of all applicable taxes owed by you shall be delivered to you within one (1) business day of your request therefor in the manner set forth in Section 18 for the giving of notices.

(c) At any closing involving the transfer or delivery of some or all of the property subject to the Grant Notice and this Agreement, Escrow Agent is directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of Vested Shares and Unvested Shares being transferred, as applicable and (c) to deliver same, together with the certificate, if any, evidencing the Vested Shares or Unvested Shares to be transferred, to you or the Company, as applicable.

(d) You irrevocably authorize the Company to deposit with Escrow Agent the certificates, if any, evidencing the Shares to be held by Escrow Agent hereunder and any additions and substitutions to the Shares as specified in this Agreement.  Subject to all provisions of this Agreement, you irrevocably do hereby constitute and appoint Escrow Agent as your attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and complete any transaction herein contemplated.

(e) The escrow shall terminate and Vested Shares and Unvested Shares shall be delivered by the Escrow Agent to the party entitled to receive them upon the expiration or valid exercise in full of the Reacquisition Right, whichever occurs first, and the completion of the tasks contemplated by these Joint Escrow Instructions; provided, however, that this escrow shall not terminate with respect to any Vested Shares, but for which you have not satisfied any applicable federal, state, local and foreign tax withholding obligation of the Company or an Affiliate which may arise in connection with the vesting of such shares.

(f) If at the time of termination of this escrow Escrow Agent should have in its possession any documents, securities, or other property belonging to you or to which you are entitled, Escrow Agent shall deliver all of same to you and shall be discharged of all further obligations hereunder in its capacity as Escrow Agent.

(g) Except as otherwise provided in these Joint Escrow Instructions, Escrow Agent’s duties hereunder may be altered, amended, modified, or revoked only by a writing signed by all of the parties hereto.

(h) Escrow Agent, in its capacity as Escrow Agent, shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by Escrow Agent to be genuine and to have been signed or presented by the proper party or parties or their assignees.  Escrow Agent shall not be personally liable for any act Escrow Agent may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for you while acting in good faith and any act done or omitted by Escrow Agent pursuant to the advice of Escrow Agent’s own attorneys shall be conclusive evidence of such good faith.

- 3 - -

(i) Escrow Agent is hereby expressly authorized to regard any and all warnings given by any of the parties hereto or by any other person or corporation, and is hereby expressly authorized to comply with and obey orders, judgments, or decrees of any court.  In case Escrow Agent obeys or complies with any order, judgment, or decree of any court, Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm, or corporation by reason of such compliance, notwithstanding any such order, judgment, or decree being subsequently reversed, modified, annulled, set aside, vacated, or found to have been entered without jurisdiction.

(j) Escrow Agent shall not be liable in any respect on account of the identity, authority, or rights of the parties executing or delivering or purporting to execute or deliver this Agreement or any documents or papers deposited or called for hereunder.

(k) Escrow Agent shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with Escrow Agent.

(l) Escrow Agent’s ongoing responsibilities as Escrow Agent hereunder shall terminate if Escrow Agent shall cease to be the Chief Financial Officer or if Escrow Agent shall resign by written notice to each party.  In the event of any such termination, the Company shall appoint any officer or assistant officer of the Company or other person who assumes the position of successor Escrow Agent within two (2) business dates of the date that the Escrow Agent shall cease to be the Chief Financial Officer and you hereby confirm the appointment of such successor or successors as the successor Escrow Agent..

(m) If Escrow Agent reasonably requires other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

(n) It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, Escrow Agent is authorized and directed to immediately interplead into a court of competent jurisdiction all of said securities, Escrow Agent is authorized and directed to retain in its possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a order, decree, or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings.

(o) By signing the Grant Notice Escrow Agent becomes a party to this Agreement hereto only for the purpose of said Joint Escrow Instructions in this Section 8; Escrow Agent does not become a party to any other rights and obligations of this Agreement apart from those in this Section 8.

- 4 - -

(p) Escrow Agent shall be entitled to employ such legal counsel and other experts as Escrow Agent may deem necessary properly to advise Escrow Agent in connection with Escrow Agent’s obligations hereunder.  Escrow Agent may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.  The Company shall be responsible for all fees generated by such legal counsel in connection with Escrow Agent’s obligations hereunder.

(q) These Joint Escrow Instructions set forth in this Section 8 shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  It is understood and agreed that references to “Escrow Agent” or “Escrow Agent’s” herein refer to the original Escrow Agent and to any and all successor Escrow Agents.  It is understood and agreed that the Company may at any time or from time to time assign its rights under the Agreement and these Joint Escrow Instructions in whole or in part.

9. Execution of Documents.  You hereby acknowledge and agree that the manner selected by the Company by which you indicate your consent to your Grant Notice is also deemed to be your execution of your Grant Notice and of this Agreement.  You further agree that such manner of indicating consent may be relied upon as your signature for establishing your execution of any documents to be executed in the future in connection with your Award.  This Restricted Stock Award Agreement shall be deemed to be signed by the Company, you and the Escrow Agent upon the respective signing by the Company, you and the Escrow Agent of the Restricted Stock Award Grant Notice to which it is attached.

10.         Irrevocable Power of Attorney. You constitute and appoint the Company’s Chief Financial Officer as attorney-in-fact and agent to transfer the Shares on the books of the Company with full power of substitution in the premises, and to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and complete any transaction herein contemplated.  This is a special and limited power of attorney coupled with an interest (specifically, your underlying interest in the Shares and the Company’s underlying security interest in retaining the Shares in the event you do not perform the required services for the Company), and is irrevocable and shall survive your death or legal incapacity.  This power of attorney is limited to the matters specified in and to effectuate this Agreement for the parties.

11.          Rights as Stockholder.  Subject to the provisions of this Agreement, you shall have the right to exercise all rights and privileges of a stockholder of the Company with respect to the Shares depositedin the Joint Escrow.   You shall be deemed to be the holder of the Shares for purposes of receiving any dividends that may be paid with respect to such Shares and for purposes of exercising any voting rights relating to such Shares even if some or all of the shares are Unvested Shares.

12.         Limitations on Transfer of the Common Stock.  In addition to any other limitation on transfer created by applicable securities laws, you shall not sell, assign, hypothecate, donate, encumber, or otherwise dispose of any interest in the Shares while such shares are Unvested Shares.  Once the Shares vest in accordance with the conditions set forth in the Plan and your Employment Agreement, you may sell, assign, hypothecate, donate, encumber, or otherwise dispose of or transfer any interest in the Shares in accordance with applicable laws and regulations.

- 5 - -

13.    Restrictive Legends.  The certificates representing the Shares shall have endorsed thereon appropriate legends as determined by the Company.  Subject to the conditions set forth in the Plan and our Employment Agreement, including the payment of all applicable taxes, all restrictions shall be removed and deemed removed immediately upon vesting.

14.    Non-transferability of the Award.  Your Award is not transferable except by will or by the laws of descent and distribution and shall be exercisable during your lifetime only by you.

15.    Award not a Service Contract.  Your Award is not an employment or service contract, and nothing in your Award shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment.  In addition, nothing in your Award shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate, except as otherwise provided in the Employment Agreement.

16.          Withholding Obligations.

(a) At the time your Award is granted and the Shares vest, or at any time thereafter as requested by the Company, you agree to make adequate provision in cash for, any sums required to be paid by you to satisfy the federal, state, local and foreign tax payable by you in connection with the Vested Shares; provided, the Company shall pay from its own resources all withholding obligations of the Company or its Affiliates, if any, which arise in connection with the Award.

(b) Unless your tax withholding obligations are satisfied or you have made provision to satisfy them, the Company shall have no obligation to issue a certificate for such shares or release such shares from any escrow provided for herein.

17.Tax Consequences.  You have reviewed with your own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement.  You are relying solely on such advisors and not on any statements or representations of the Company or any of its agents.  You understand that you (and not the Company) shall be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.  You understand that Section 83 of the Code taxes as ordinary income to you the fair market value of the Shares as of the date all restrictions on the Shares lapse (that is, as of the date on which the Shares vest).  In this context, “restriction” includes the right of the Company to reacquire the Shares pursuant to its Reacquisition Right, which is a substantial risk of forfeiture.

- 6 - -

18.Notices.  All notices with respect to the Plan shall be in writing and shall be hand delivered or sent by first class mail or reputable overnight delivery service, expenses prepaid.  Notice may also be given by electronic mail or facsimile and shall be effective on the date transmitted if confirmed within 24 hours thereafter by a signed original sent in a manner provided in the preceding sentence.  Notices to the Company or the Board shall be delivered or sent to GSI’s headquarters, 935 First Avenue, King of Prussia, PA 19406, to the attention of its Chief Financial Officer and its General Counsel.  Notices to any Participant or holder of shares of Common Stock issued pursuant to an Award shall be sufficient if delivered or sent to such person’s address as it appears in the regular records of the Company or its transfer agent.  Notices to the Escrow Agent shall be sent to Chief Financial Officer, GSI Commerce, Inc., 935 First Avenue, King of Prussia, PA 19406

19.Headings.  The headings of the Sections in this Agreement are inserted for convenience only and will not be deemed to constitute a part of this Agreement or to affect the meaning of this Agreement.

20.Amendment.  This Agreement may be amended only by a writing executed by the Company and you which specifically states that it is amending this Agreement. Notwithstanding the foregoing, this Agreement may be amended solely by the Board (or appropriate committee thereof) by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment may adversely affect your rights hereunder without your prior written consent, which may be given or withheld in your sole discretion.  Without limiting and subject to the foregoing, the Board (or appropriate committee thereof) reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

21.Miscellaneous.

(a) The rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns. Your rights and obligations under your Award may not be assigned by you, except with the prior written consent of the Company.

(b) You agree upon request to execute any further documents or instruments necessary to carry out the purposes and intent of your Award.

22.Governing Plan Document.  Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all laws, and interpretations, amendments, rules and regulations adopted by the Company to comply with such laws, which may from time to time be promulgated and made applicable to the Plan.  In the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control.  The Board (or appropriate committee thereof) will have the power to reasonably interpret the Plan and this Agreement and to adopt such reasonable rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules.  All such interpretations, amendments, rules and regulations shall be made uniform and applicable to all persons who are Eligible Stock Award Recipients (as defined in the Plan).  All such actions taken and all such interpretations and determinations made by the Board (or appropriate committee thereof) will be final and binding upon you, the Company, and all other interested persons.  No member of the Board (or appropriate committee thereof) will be personally liable for any such action, determination, or interpretation made in good faith with respect to the Plan or this Agreement.

- 7 - -

23.Effect on Other Employee Benefit Plans.  The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any subsidiary except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any subsidiary’s employee benefit plans in accordance with their terms.

24.Choice of Law.  The interpretation, performance and enforcement of this Agreement will be governed by the law of the state of Delaware without regard to such state’s conflicts of laws rules.

25.Severability.  If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

26.Company Representations.   The Company warrants as follows: (a)you are qualified in all respects under the Plan to receive the Award and all of the Shares, subject to conditions on vesting; (b) the issuance of the Award and Shares to you has received all requisite approvals contemplated by the documents governing the Plan, and no further consents or approvals are required; (c) the issuance of the Award and Shares to you has been duly authorized by all appropriate corporate action on the part of the Company, and no further authorization or corporate action is required; and (d) upon vesting, and subject to the conditions on vesting, the Shares will be free of all encumbrances and restrictions, including restrictions on transfer.

- 8 - -

EX-99.1

Exhibit 99.1

News Release

Contact:

GSI Commerce, Inc.	Innotrac Corporation
Corporate Marketing	Kristi Doughty
610.491.7474	678.584.4070
Fax: 610.265.2866	Fax: 678.584.8915
news@gsicommerce.com	Kdoughty@innotrac.com

GSI Commerce to Acquire Innotrac Corporation

Acquisition Increases GSI’s Client Base, Provides Expanded Infrastructure and Capacity and Enables GSI to Begin Regional Distribution Strategy for Its Clients in 2009

KING OF PRUSSIA, Pa., and ATLANTA, Oct. 6, 2008 – Leading e-commerce and multichannel solutions provider, GSI Commerce Inc. (Nasdaq: GSIC), today announced it has signed a definitive agreement to acquire Innotrac Corporation (Nasdaq: INOC).

Innotrac is a leading provider of e-commerce fulfillment and customer care services. The company operates eight facilities, including seven primarily used for fulfillment and one primarily used for customer care. The fulfillment facilities are located in Georgia, Illinois, Kentucky, Nevada and Ohio, and the customer care facility is located in Colorado. As of June 30, 2008 Innotrac had gross property and equipment of $49.9 million and net property and equipment of $17.0 million. The company serves more than 30 clients in the retail, telecommunications and direct marketing industries. Retail clients accounted for the largest percentage of the company’s revenue in 2007 and include leading brands in the apparel, beauty, home, jewelry, entertainment, technology, toys and general merchandise categories. The company’s clients include one of the 10 largest retailers in the United States.

For the trailing 12 months ending June 30, 2008 Innotrac recorded net revenues of $128.2 million, income from operations of $4.5 million and non-GAAP income from operations of $9.1 million. Non-GAAP income from operations equals income from operations plus $0.2 million of stock-based compensation expenses and $4.4 million of depreciation and amortization expenses. As previously announced by Innotrac, these results include contribution from a significant client in the telecommunications category whose fulfillment contract will expire in the middle of 2009 and is not expected to renew.

The addition of Innotrac will increase GSI’s client base and expand GSI’s North American infrastructure and capacity. Following the close of the acquisition, GSI will operate approximately 4.7 million square feet of fulfillment centers and 2,165 call center seats. GSI intends to utilize the company’s Reno, Nev. fulfillment center to begin offering regional fulfillment capabilities to its clients beginning in 2009.

“Innotrac furthers our leadership position in e-commerce and multichannel services by bringing new clients, enhancing our scale for fulfillment and call center services and adding to our available capacity to support growth of new and existing clients. By acquiring Innotrac we believe we will be better positioned to capture a greater share of our growing market opportunity. This acquisition works for us strategically and operationally and we would expect it to have a positive impact on our financial results in 2009,” said Michael G. Rubin, chairman and CEO of GSI. “We are also excited to begin our regional distribution strategy more than one year earlier than we had planned by utilizing Innotrac’s Reno, Nevada fulfillment center. Regional fulfillment will enable our clients to deliver packages to their customers more quickly while saving money on delivery costs. This is a key part of our strategic focus of enhancing the consumer shopping experience.”

(more)

Page 2 GSI Commerce to Acquire Innotrac News Release

“Innotrac provides outstanding e-commerce fulfillment and customer care services to some of the best retail and consumer brands in the world,” said Scott Dorfman, CEO of Innotrac. “Our extensive network of facilities and systems is fully integrated and is well suited to complement GSI’s existing fulfillment and customer care facilities. We are excited about the opportunities this transaction provides for our employees and clients and look forward to them benefitting from GSI’s leadership position in e-commerce and multichannel services.”

Under the definitive agreement, which has been approved by the boards of directors of both companies, GSI will acquire Innotrac for $52 million, consisting of cash of $22 million and shares of GSI common stock valued at $30 million, or 1,841,621 shares at $16.29 per share, the volume weighted average price over the 20 days prior to signing. As of June 30, 2008 Innotrac had net debt of $9.9 million, making the aggregate value of the transaction $61.9 million.

Innotrac shareholders are expected to receive approximately $4.03 per share for each share of Innotrac common stock, consisting of $1.70 in cash and 0.1426 of a share of GSI common stock. The number of shares to be received are subject to adjustment under certain circumstances. If the volume weighted average price of GSI common stock during the 20 trading days ending on the third trading day prior to the date of the Innotrac shareholders meeting to approve the merger is between $13.03 and $20.85, the number of shares of GSI common stock to be received per share of Innotrac common stock will range from 0.1784 of a share to 0.1115 of a share, and the total number of shares to be issued by GSI will range from 2,302,379 to 1,438,849. Above $20.85 and below $13.03, the number of shares will be fixed, subject to the right of either party to terminate the definitive agreement under certain circumstances if the price is below $11.12.

The acquisition is expected to close during the first half of 2009 and is subject to customary and other closing conditions, including the approval of Innotrac stockholders, certain third-party consents, and court approval by the United States District Court for the Northern District of Ohio of a settlement agreement between Innotrac and the court-appointed receiver of the IPOF Fund, L.P., which holds approximately 35 percent of the outstanding shares of Innotrac. Innotrac’s chairman and CEO, who owns approximately 46 percent of the company’s issued and outstanding shares, has agreed to vote in favor of the transaction.

Non-GAAP Financial Measures

In this release, we use the non-GAAP financial measure non-GAAP income from operations. This non-GAAP measure is not intended to be considered in isolation of, as a substitute for, or superior to, GAAP financial information. We have included a reconciliation of non-GAAP income from operations to the nearest GAAP measure, income from operations, in the body of this release.

In this release we use non-GAAP income from operations because GSI uses this metric for financial and operational decision making and as a means to evaluate its performance. In our opinion, this non-GAAP measure provides meaningful supplemental information regarding our performance. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing the performance of GSI and the performance of Innotrac and when planning, forecasting and analyzing future periods. This non-GAAP financial measure also facilitates management’s internal comparisons to historical performance as well as to the operating results of comparable companies. We believe this non-GAAP financial measure is useful to investors both because (1) it allows for greater transparency with respect to a key metric used by management in its financial and operational decision making and (2) it is used by institutional investors and the analyst community to help them analyze the health of our business.

Page 3 GSI Commerce to Acquire Innotrac News Release

Non-GAAP income from operations. We define non-GAAP income from operations as income from operations excluding stock-based compensation, depreciation and amortization expenses and acquisition-related integration expenses. We consider non-GAAP income from operations to be a useful metric for management and investors because it excludes certain non-cash and non-operating items. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when valuing equity awards under SFAS 123R, we believe that viewing income from operations excluding stock-based compensation expense allows investors to make meaningful comparisons between our operating performance and those of other businesses. Because we are growing rapidly and operate in an emerging and rapidly changing industry, we believe that our level of capital expenditures and consequently the level of depreciation and amortization expense relative to our revenues could be meaningfully greater today than it will be over time. As a result, we believe it is useful supplemental information to view income from operations excluding depreciation and amortization expense as it provides a potential indicator of the future operating margin potential of the business. We believe the exclusion of acquisition-related integration expenses permits evaluation and a comparison of results for on-going business operations, and it is on this basis that management internally assesses the company's performance.

About GSI Commerce

GSI Commerce® (www.gsicommerce.com) is a leading provider of services that enable e-commerce, multichannel retailing and interactive marketing for large, business-to-consumer (b2c) enterprises in the U.S. and internationally. We deliver customized e-commerce solutions through an e-commerce platform, which is comprised of technology, fulfillment and customer care. We offer each of the platform’s components on a modular basis, or as part of an integrated, end-to-end solution. We also offer a full suite of interactive marketing services through two divisions, gsi interactivesm and e-Dialog Inc. (www.e-dialog.com).

About Innotrac

Innotrac Corporation was founded in 1984 and is based in Duluth, Ga., a suburb of Atlanta. The company employs approximately 1,600 people and provides full-service fulfillment and logistics for retail, catalog and direct marketing companies. The company operates eight fulfillment centers located in four time zones across the U.S. and has a fulfillment capacity of approximately 2.5 million square feet. Innotrac also operates two customer care centers that have a capacity of 570 customer care workstations. For more information about Innotrac, visit the company’s Web site at www.Innotrac.com.

Important Information

In connection with the proposed merger, GSI and Innotrac will file a registration statement, a proxy statement/prospectus and other relevant documents concerning the proposed merger with the SEC. SHAREHOLDERS OF INNOTRAC ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a free copy of the proxy statement/prospectus (when available) and other documents filed by GSI and Innotrac at the Securities and Exchange Commission’s Web site at http://www.sec.gov. Copies of the proxy statement/prospectus can also be obtained, without charge, by directing a request to:

Page 4 GSI Commerce to Acquire Innotrac News Release

GSI Commerce, Inc.	Innotrac Corporation
935 First Avenue	6655 Sugarloaf Parkway
King of Prussia, PA 19406	Duluth, GA 30097
Attention:  Greg Ryan, Director, Corporate Communications	Attention: George Hare, Chief Financial Officer
Telephone Number: (610)491-7294	Telephone Number:(678)584-4000

GSI, Innotrac and their respective directors and executive officers and other members of management and employees may be deemed to participate in the solicitation of proxies in respect of the proposed merger. Information regarding GSI's directors and executive officers is available in GSI's proxy statement for its 2008 annual meeting of shareholders, which was filed with the SEC on April 25, 2008. Information regarding Innotrac’s directors and executive officers is available in Innotrac’s annual report on Form 10-K for its fiscal year ended Dec. 31, 2007 filed with the SEC on April 15, 2008 and amended on April 29, 2008, and in its proxy statement for its 2008 annual meeting of shareholders filed on May 8, 2008. Additional information regarding the interests of such potential participants will be included in the proxy statement/prospectus relating to the merger and the other relevant documents filed with the SEC when they become available.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements made in this release, other than statements of historical fact, are forward-looking statements, including statements regarding the expected timing of the closing of the acquisition, the ability of GSI Commerce Inc. and Innotrac to close the acquisition, the expected benefits of the acquisition, the expected performance and features of Innotrac products services and any GSI Commerce and Innotrac combined products and services, and the expected impact of the acquisition on GSI’s financial results.  In addition, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “opportunity,” “continue,” “project,” “forecast,” “confident,” “prospects,” “schedule” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business of GSI Commerce. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Factors which may affect GSI Commerce’s business, financial condition and operating results include the risk that the planned acquisition may not close on the terms agreed upon or at all, risks related to the acquisition, including unanticipated liabilities and expenses, the effects of changes in the economy, consumer spending, the financial markets and the industries in which GSI Commerce and its partners operate, changes affecting the Internet and e-commerce, the ability of GSI Commerce to develop and maintain relationships with strategic partners and suppliers and the timing of its establishment, extension or termination of its relationships with strategic partners, the ability of GSI Commerce to timely and successfully develop, maintain and protect its technology, confidential and proprietary information, and product and service offerings and execute operationally, the ability of GSI Commerce to attract and retain qualified personnel, the ability of GSI Commerce to successfully integrate its acquisitions of other businesses and the performance of acquired businesses. More information about potential factors that could affect GSI Commerce can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by GSI Commerce with the SEC. GSI Commerce expressly disclaims any intent or obligation to update these forward-looking statements.

###