8-K

 

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): January 28, 2009

GSI COMMERCE, INC.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	0-16611	04-2958132
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
935 First Avenue, King of Prussia, Pennsylvania		19406
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 610-491-7000

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:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02 Termination of a Material Definitive Agreement.

On January 28, 2009, GSI Commerce, Inc. ("GSI"), Bulldog Acquisition Corp., a Georgia corporation and a wholly owned subsidiary of GSI, and Innotrac Corporation, a Georgia corporation ("Innotrac"), entered into a Termination Agreement to terminate their previously announced Agreement and Plan of Merger dated as of October 5, 2008 ("Merger Agreement") pursuant to the mutual termination provision and without penalty to either party. The Termination Agreement also contains a mutual release of the parties with respect to claims arising out of the Merger Agreement and any agreements entered into in connection with the Merger Agreement. GSI filed a Current Report on Form 8-K on October 6, 2008 reporting its entering into the Merger Agreement and describing the terms thereof and, to the extent required by Item 1.02 of Form 8-K, that description is incorporated by reference in this Item 1.02 pursuant to General Instruction B.3 of Form 8-K.

The foregoing summary of the Termination Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Termination Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On January 29, 2009, GSI and Innotrac issued a joint press release announcing that that they had mutually agreed to terminate the Merger Agreement based on current prevailing market valuations. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Description

10.1 Termination Agreement, dated as of January 28, 2009, by and among GSI Commerce, Inc., Bulldog Acquisition Corp. and Innotrac Corporation.

99.1 Press Release issued by GSI Commerce, Inc. and Innotrac Corporation dated January 29, 2009.

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.

	GSI COMMERCE, INC.
January 29, 2009	By:	/s/ Arthur H. Miller
		Name: Arthur H. Miller
		Title: Executive Vice President and Secretary

Exhibit Index

Exhibit No.	Description
10.1	Termination Agreement, dated as of January 28, 2009, by and among GSI Commerce, Inc., Bulldog Acquisition Corp. and Innotrac Corporation.
99.1	Press Release issued by GSI Commerce, Inc. and Innotrac Corporation dated January 29, 2009.

EX-10.1

TERMINATION AGREEMENT

Parties:	Innotrac Corporation, a Georgia corporation (the “Company”), 6655 Sugarloaf Parkway, Duluth, Georgia 30097
	GSI Commerce, Inc., a Delaware corporation (“Parent”), 935 First Avenue, King of Prussia, Pennsylvania 19406
	Bulldog Acquisition Corp., a Georgia corporation (“Acquisition Sub”), 935 First Avenue, King of Prussia, Pennsylvania 19406
Date:	January 28, 2009

Background

A. The parties hereto are parties to that certain Agreement and Plan of Merger dated as of October 5, 2008 (the “Merger Agreement”) providing for the merger (the “Merger”) of Acquisition Sub with and into the Company.

B. The parties desire to terminate the Merger Agreement and abandon the Merger pursuant to Section 7.1(a) of the Merger Agreement (the “Termination”).

C. The board of directors of each of Parent and the Company have approved the Termination and the execution of this Termination Agreement.

D. Capitalized terms used and not defined herein shall have the meanings set forth in Exhibit A of the Merger Agreement.

Intending To Be Legally Bound, in consideration of the mutual agreements contained herein, the parties hereto agree as follows

1. Termination. Effective as of the date hereof, the parties hereby mutually consent to the Termination pursuant to Section 7.1(a) of the Merger Agreement, and the Merger Agreement is hereby terminated and of no further force and effect.

2. Mutual Release. Each of Parent and Acquisition Sub, on the one hand, and Company, on the other hand (in such capacity, a “Releasing Party”), for itself and on behalf of its parents, subsidiaries, directors, officers, employees, representatives, agents, predecessors, successors and assigns (“Related Persons”), hereby fully releases, remises and forever discharges, and covenants not to sue, to the fullest extent permitted under applicable law, the other party (in such capacity, the “Released Party”) and its Related Persons of and from any and all actions, causes of action, suits, liabilities, obligations, debts, accountings, covenants, contracts, agreements, judgments, claims and demands of any nature, whether at law or in equity, which the Releasing Party or its Related Persons had, has or hereafter may have against the Released Party and its Related Persons arising out of and/or relating to the negotiation, execution, delivery, performance, nonperformance, breach or termination of the Merger Agreement (including, without limitation, Section 7.2 thereof), any other agreements executed in connection with the Merger Agreement, and the Merger and the other transactions contemplated thereby. Anything in this Termination Agreement to the contrary notwithstanding, the Confidentiality Agreement and this Termination Agreement each shall survive the Termination and shall not be subject to this Section 2.

3. Public Announcement. Parent and Company will issue a mutually agreed upon joint press release in the form attached hereto as Exhibit A (the “Press Release”) following the signing of this Termination Agreement with respect to this Termination Agreement and the termination of the Merger Agreement. Except as required by law or applicable listing requirements, no other press release or public statement shall be issued or made regarding the termination of the Merger Agreement by either Parent or Company without the prior written consent of the other. Notwithstanding the foregoing, both Parent and Company will be permitted to make reference to the matters addressed in this Termination Agreement or the Press Release in other press releases, public statements or required filings with the Securities and Exchange Commission, provided that such references are consistent in substance with the Press Release or are required by applicable law or listing requirements.

4. Representations and Warranties. Each of Parent and Acquisition Sub, on the one hand, and Company, on the other hand, represents and warrants to the other party that: (a) it has full power and authority to enter into this Termination Agreement and to perform its obligations hereunder, (b) this Termination Agreement has been duly authorized, executed and delivered by such party, and (c) this Termination Agreement constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity.

5. Expenses. All fees and expenses incurred in connection with the Merger Agreement or this Termination Agreement and the transactions contemplated by the Merger Agreement or this Termination Agreement shall be paid by the party incurring such expenses.

6. Applicable Law. This Termination Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof or any other jurisdiction. In any action between any of the parties arising out of or relating to this Termination Agreement or any of the transactions contemplated by this Termination Agreement: (a) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts located in the State of Delaware (and agrees not to commence any such action except in such courts) and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action brought in such court has been brought in an inconvenient forum; (b) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court located in the State of Delaware; (c) each of the parties irrevocably waives the right to trial by jury; and (d) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid, to the address at which such party is to receive notice in accordance with Section 10.

7. Entire Agreement; Counterparts; No Third Party Beneficiaries; Exchanges by Facsimile or Electronic Delivery. This Termination Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among or between any of the parties with respect to the subject matter hereof and thereof; provided, however, that the Confidentiality Agreement shall not be superseded and shall remain in full force and effect. This Termination Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. No provision of this Termination Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder except for Related Persons under Section 2 hereof. The exchange of a fully executed Termination Agreement (in counterparts or otherwise) by facsimile or by electronic delivery shall be sufficient to bind the parties to the terms and conditions of this Termination Agreement.

8. Headings. The section, paragraph and other headings contained in this Termination Agreement are inserted for convenience of reference only and shall not affect in any way the meaning or interpretation of this Termination Agreement.

9. Attorneys’ Fees. In any action at law or suit in equity to enforce this Termination Agreement or the rights of any of the parties hereunder, the prevailing party in such action or suit shall be entitled to receive a reasonable sum for its attorneys’ fees and all other reasonable costs and expenses incurred in such action or suit.

10. Notices. All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Termination Agreement, or in connection with the transactions contemplated hereby and thereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (a) if personally delivered, on the business day after it is received (as evidenced by the receipt of the personal delivery service); (b) if mailed by certified or registered mail return receipt requested, four (4) business days after the aforesaid mailing; (c) if delivered by overnight courier (with all charges having been prepaid), on the second business day after it is sent (as evidenced by the receipt of the overnight courier service of recognized standing); or (d) if delivered by facsimile transmission, on the business day of such delivery if confirmed within 48 hours thereafter by a signed original sent in one of the manners set forth in (a) through (c) above. If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section), or the refusal to accept same, the notice shall be deemed received on the business day the notice is sent (as evidenced by a sworn affidavit of the sender). All such notices, demands, consents, requests, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable: (i) if to Parent or Acquisition Sub: at Parent’s address stated on page one of this Termination Agreement to the attention of General Counsel (fax # (610) 265-1730), with a copy sent simultaneously to the same address, to the attention of its Chief Financial Officer (fax # (610) 265-1730), and to Francis E. Dehel, Esquire, Blank Rome LLP, One Logan Square, Philadelphia, Pennsylvania 19103; telephone: (215) 569-5500, (fax# (215) 832-5532) and (ii) if to Company, to the address stated on page one of this Termination Agreement to the attention of the Chairman, President and Chief Executive Officer (fax # (678) 584-8950), with a copy to David A. Stockton and David M. Eaton, Kilpatrick Stockton LLP, 1100 Peachtree Street, Suite 2800, Atlanta, Georgia (fax # (404) 541-3402 and (404) 541-3188, respectively).

11. Severability. Any term or provision of this Termination Agreement that is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, void or unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

12. Construction. The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Termination Agreement.

13. Specific Performance. Each of the parties agrees that the remedy at law for any breach of the terms and conditions of this Termination Agreement by it will be inadequate and that in addition to, and not in limitation of any other remedies that any other party may have either at law or under this Termination Agreement, such other party shall be entitled to specific performance or injunctive relief or other equitable relief from any court of competent jurisdiction from any breach or purported breach of this Termination Agreement.

IN WITNESS WHEREOF, the parties have caused this Termination Agreement to be executed as of the date first above written.

GSI Commerce, Inc.

By: /s/ Arthur H. Miller
Name: Arthur H. Miller
Title: Executive Vice President

Bulldog Acquisition Corp.

By: /s/ Arthur H. Miller
Name: Arthur H. Miller
Title: Executive Vice President

Innotrac Corporation

By: /s/ George M. Hare
Name: George M. Hare
Title: Senior VP and CFO

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

GSI Commerce and Innotrac Mutually Agree to Terminate Merger Agreement

KING OF PRUSSIA, Pa., and ATLANTA, Jan. 29, 2009 – Leading e-commerce and multichannel solutions provider, GSI Commerce Inc. (Nasdaq: GSIC), and Innotrac Corporation, (Nasdaq: INOC), a leading provider of e-commerce fulfillment and customer care services, today announced that they have mutually agreed to terminate their merger agreement based on current prevailing market valuations. Neither party has any financial obligation to the other as a result of the termination.

Innotrac also announced the cancellation of its special meeting of shareholders to consider the merger agreement, which was scheduled for Feb. 6, 2009.

GSI is scheduled to announce its fiscal 2008 year and fourth quarter operating results after the market close on Feb. 11 with a conference call to follow at 4:45 p.m. EST. For access to the call’s webcast, please visit GSI’s Web site at www.gsicommerce.com and click on the webcast tab, or dial 1-888-679-8018 and use passcode 64667534.

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 interactive^sm 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.

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.

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