Document:

Exhibit 10.3

 

INDEMNIFICATION AGREEMENT

 

                  THIS AGREEMENT is made this 12 day of November, 2013 by and between INNOTRAC CORPORATION, a Georgia corporation (the “Corporation”), and ___________ (the “Indemnified Party”).

 

W I T N E S S E T H:

 

         WHEREAS, the Indemnified Party currently serves as a director, officer, or both of the Corporation, and in such capacity is performing a valuable service; and

 

         WHEREAS, pursuant to the Corporation’s Articles of Incorporation and Bylaws, each as amended to date (collectively the “Charter”), the Corporation may indemnify its directors and officers to the fullest extent authorized by applicable law; and

 

         WHEREAS, Section 14-2-851 of the Georgia Business Corporation Code, as amended to date (the “State Statute”), provides the statutory basis for the indemnification of directors and officers of a Georgia corporation; and

 

         WHEREAS, in order to induce the Indemnified Party to continue to serve, the Corporation has determined and agreed to enter into this Agreement with the Indemnified Party;

 

         NOW, THEREFORE, in consideration of Indemnified Party’s continued service on behalf of the Corporation after the date hereof, the parties hereto agree as follows:

 

         1.       INDEMNITY. The Corporation hereby agrees to hold harmless and indemnify the Indemnified Party to the fullest extent authorized or permitted by the provisions of the State Statute with respect to the indemnification of directors and officers, or by any amendment thereof or other statutory provision authorizing or permitting such indemnification that is adopted after the date hereof.  This Agreement shall supersede any prior Indemnification Agreement between the parties hereto.

 

         2.       ADDITIONAL INDEMNITY. Subject only to the exclusions set forth in SECTION 3 hereof, the Corporation hereby further agrees to hold harmless and indemnify Indemnified Party against any and all expenses (including reasonable attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by Indemnified Party in connection with any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (including an action by or in the right of the Corporation) to which Indemnified Party is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Indemnified Party is, was or at any time becomes a director, officer, employee, or agent of the Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise.

 

    	  

    	 

    
 

 

         3.       LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to SECTIONS 1 or 2 hereof shall be paid by the Corporation:

 

                  (a)      In respect of expenses, judgments, fines, and settlement amounts to the extent attributable to remuneration paid or other financial benefit provided to the Indemnified Party by the Corporation if it shall be determined by a final judgment or other final adjudication that such remuneration or financial benefit was paid or provided in violation of the Indemnified Party’s duties and obligations to the Corporation;

 

                  (b)      On account of any suit in which judgment is rendered against Indemnified Party for an accounting of profits, made from the purchase or sale by the Indemnified Party of securities of the Corporation, pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any federal or state law, or on account of any payment by the Indemnified Party to the Corporation in respect of any claim for

such accounting;

 

                  (c)      On account of the Indemnified Party’s conduct if it shall be determined by a final judgment or other final adjudication to have been knowingly fraudulent, deliberately dishonest, or grossly negligent, or to have constituted willful misconduct; or

 

                  (d)      If a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.

 

         4.       CONTRIBUTION.  (a)  If the indemnification provided in SECTIONS 1 OR 2 is unavailable and may not be paid to the Indemnified Party for any reason (other than pursuant to SECTIONS 3(A), (B), (C) or (D)), then in respect of any threatened, pending, or completed action, suit, or proceeding in which the Corporation is jointly liable with the Indemnified Party (or would be if joined in such action, suit, or proceeding), the Corporation shall contribute to the amount of expenses, judgments, fines, penalties, and settlements paid or payable by the Indemnified Party in such proportion as is appropriate to reflect (i) the relative benefits received by the Corporation on the one hand and the Indemnified Party on the other from the transaction from which such action, suit, or proceeding arose, and (ii) the relative fault of the Corporation on the one hand and of the Indemnified Party on the other in connection with the events that resulted in such expenses, judgments, fines, penalties, or settlement amounts, as well as any other relevant equitable considerations. The relative fault of the Corporation on the one hand and of the Indemnified Party on the other shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines, penalties, or settlement amounts. The Corporation agrees that it would not be just and equitable if contribution pursuant to this SECTION 4 were determined by pro rata allocation or any other method of allocation that does not take account of the foregoing equitable considerations.

 

               (b)         The determination as to the amount of the contribution, if any, shall be made by: (i) a court of competent jurisdiction upon the application of both the Indemnified Party and the Corporation (if an action or suit had been brought in, and final determination had been rendered by, such court); (ii) the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding; or (iii) regular outside counsel of the Corporation, if a quorum is not obtainable for purposes of clause (ii) above, or, even if obtainable, a quorum of disinterested directors so directs.

 

         5.       CONTINUATION OF OBLIGATIONS. All agreements and obligations of the Corporation contained herein shall continue during the period the Indemnified Party is a director, officer, employee, or agent of the Corporation (or is serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise), and shall continue thereafter for so long as the Indemnified Party shall be subject to any possible claim or threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that the Indemnified Party was serving in any such capacity on behalf of the Corporation.

 

    	  

    	 

    
 

 

         6.       ADVANCEMENT OF EXPENSES. Expenses (including attorneys’ fees), judgments, fines, penalties, and amounts paid in settlement actually and reasonably incurred by the Indemnified Party with respect to any action, suit, or proceeding referred to in SECTIONS 1 or 2 shall be advanced by the Corporation prior to the time of the disposition of such action, suit, or proceeding promptly upon the receipt of a (a) written affirmation from the Indemnified Party of his good faith belief that he is entitled to be indemnified by the Corporation for such expenses, judgments, fines, penalties, or amounts paid in settlement under the provisions of the State Statute, the Charter, this Agreement, or otherwise, and (b) written undertaking to return promptly any amounts advanced hereunder if it shall ultimately be determined that the Indemnified Party is not entitled to indemnification from the Corporation for such amounts under the provisions of the State Statute, the Charter, this Agreement, or otherwise.

 

         7.       NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by the Indemnified Party of notice of the commencement of any action, suit, or proceeding, the Indemnified Party will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement thereof, but the failure to notify the Corporation will not relieve it from any liability that it may have to the Indemnified Party otherwise than under this Agreement. With respect to any such action, suit, or proceeding as to which the Indemnified Party so notifies the Corporation:

 

                  (a)      The Corporation will be entitled to participate at its own expense;

 

                  (b)      Except as otherwise provided below, the Corporation may assume the defense thereof, with counsel reasonably satisfactory to the Indemnified Party. After notice from the Corporation to the Indemnified Party of its election to assume such defense, the Corporation will not be liable to the Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof, other than reasonable costs of investigation or as otherwise provided below. The Indemnified Party shall have the right to employ its own counsel in such action, suit, or proceeding, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnified Party, unless (i) the employment of counsel by the Indemnified Party and payment of fees and expenses by the Corporation has been authorized by the Corporation, (ii) counsel to the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Corporation and the Indemnified Party in the conduct of the defense of such action and has advised the Indemnified Party in writing that such a conflict of interest exists, or (iii) the Corporation shall not in fact have employed counsel in a timely manner to assume the defense of such action, in each of which cases the fees and expenses of counsel for the Indemnified Party shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit, or proceeding brought by or on behalf of the Corporation or as to which the Indemnified Party shall have made the conclusion provided for in clause (ii) above; and

 

                  (c)      The Corporation shall have no obligation to indemnify the Indemnified Party under this Agreement for any amounts paid in settlement of any action or claim effected without the Corporation’s prior written consent. The Corporation shall not settle any action or claim in any manner that would impose any penalty or limitation on the Indemnified Party without the Indemnified Party’s prior written consent. Neither the Corporation nor the Indemnified Party will unreasonably withhold their consent to any proposed settlement.

 

    	  

    	 

    
 

 

         8.       REPAYMENT OF EXPENSES. The Indemnified Party agrees to reimburse the Corporation for all reasonable expenses, judgments, fines, penalties, and settlement amounts paid by the Corporation in defending any civil, criminal, administrative, or investigative action, suit, or proceeding against the Indemnified Party or advanced by the Corporation to the Indemnified Party in such event, but only to the extent that it shall be ultimately determined that the Indemnified Party is not entitled to be indemnified by the Corporation for such expenses, judgments, fines, penalties, or amounts paid in settlement under the provisions of the State Statute, the Charter, this Agreement, or otherwise.

 

         9.       ENFORCEMENT.  (a)  The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce the Indemnified Party to continue to serve on behalf of the Corporation, and acknowledges that the Indemnified Party is relying upon this Agreement in continuing to serve in such capacity.

 

                  (b)      If the Indemnified Party is required to bring any action to enforce rights or to collect moneys due under this Agreement and is successful in such action, then the Corporation shall reimburse the Indemnified Party for all of the Indemnified Party’s reasonable fees and expenses in bringing and pursuing such action.

 

         10.      SEVERABILITY. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable in whole or in part for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof and this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein.

 

         11.      GENERAL AND MISCELLANEOUS.  (a)  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia, without regard to its conflicts of laws rules.

 

                  (b)      This Agreement shall be binding upon the Indemnified Party, his heirs, personal representative, and assigns (whether by merger or otherwise), and upon the Corporation and its successors and assigns, and shall inure to the benefit of and be enforceable by the Indemnified Party, his heirs, personal representatives, and assigns, and by the Corporation and its successors and assigns.

 

                  (c)      No amendment, modification, termination, or cancellation of this Agreement shall be effective unless in a writing signed by both parties hereto.

 

         12.      NO DUPLICATION OF PAYMENTS. The Corporation shall not be liable under this Agreement to make any payment to the extent the Indemnified Party has otherwise actually received payment (under any insurance policy, Charter provision, or otherwise) of the amounts otherwise indemnifiable hereunder.

 

         13.      COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original, with the same effect as if the signatures on each counterpart were signed upon the same instrument.  Any signature delivered electronically (by facsimile, e-meail, pdf or similar attachment) shall be treated in all manner and respects as an original executed counterpart with the same binding effect as if delivered in person as a signed original.

 

    	  

    	 

    
 

 

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

	 	 	 	 
	 	 	 	 
	 	INNOTRAC CORPORATION	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Steve Keaveney	 
	 	 	Senior Vice President and Chief Financial Officer	 

 

AGREED TO AND ACCEPTED:Exhibit 10.4

 

DEFERRED COMPENSATION PLAN TRUST AGREEMENT

 

    	

    	 

    
 

 

	
TABLE OF CONTENTS

	  	  	  	  
	
ARTICLE I

	  	  
	  	
ESTABLISHMENT

	  	
3

	
ARTICLE II

	  	  
	  	
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

	  	
4

	
ARTICLE III

	  	  
	  	
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT

	  	
4

	
ARTICLE IV

	  	  
	  	
DUTIES AND POWERS OF THE TRUSTEE

	  	
6

	
ARTICLE V

	  	  
	  	
DISPOSITION OF INCOME

	  	
7

	
ARTICLE VI

	  	  
	  	
LIMITATION OF TRUSTEE’S LIABILITY

	  	
8

	
ARTICLE VII

	  	  
	  	
EXPENSES AND COMPENSATION

	  	
8

	
ARTICLE VIII

	  	  
	  	
SUBSTITUTION AND SUCCESSION OF TRUSTEE

	  	
9

	
ARTICLE IX

	  	  
	  	
ARTICLE IX ACCOUNTING PROVISIONS

	  	
9

	
ARTICLE X

	  	  
	  	
AMENDMENT AND TERMINATION

	  	
10

	
ARTICLE XI

	  	  
	  	
SUCCESSOR COMPANY

	  	
10

	
ARTICLE XII

	  	  
	  	
CONSTRUCTION AND PAYMENT

	  	
10

	
ARTICLE XIII

	  	  
	  	
MISCELLANEOUS

	  	
10

 

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 TRUST AGREEMENT

 

This Agreement is made by and between Innotrac, Inc. (hereinafter the “Company”), and the undersigned banking institution, as Trustee (hereinafter referred to as the “Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Company has established the The Imam, Inc. Nonqualified Deferred Compensation Plan (the “Plan”) for certain of its employees; and

 

WHEREAS, the Company wishes to establish a trust (“Trust”) and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company’s creditors in the event of the Company’s insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan; and

 

WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded Plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974; and

 

WHEREAS, the Trustee has consented to act as trustee of the trust fund and to hold and distribute the assets transferred to the trustee and accumulated in respect of the Plan on the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter set forth, the Company and the Trustee hereby agree as set forth below.

 

ARTICLE I

ESTABLISHMENT

 

1.1           The Trust Fund shall consist of such sums of money or other property, in a form acceptable to the Trustee, as shall from time to time be paid or delivered to the Trustee pursuant to the Plan which, together with all earnings, profits, increments and accruals thereon, without distinction between principal and income, shall constitute the Trust Fund hereby created and established. The Trust Fund shall be held, administered and disposed of by the Trustee as provided in the Trust Agreement. The Trust hereby established shall be irrevocable.

 

1.2           The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part 1, subchapter 3, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

 

1.3             The Trust Fund shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the Company’s general creditors under federal and state law in the event of insolvency, as defined in Section 3(a) herein.

 

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ARTICLE II

PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

 

2.1           The Company shall designate an Administrative Committee (“Committee”) in accordance with the Plan and the Committee shall deliver to the Trustee a schedule (“the Payment Schedule”) that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. Except as otherwise provided herein, the Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company. The Company shall provide the Trustee with all information necessary to make such tax withholding provisions and the Trustee shall be entitled to rely on such information. The Company shall be responsible for the remittance to the appropriate tax authorities of its share of any applicable employment taxes, as distinguished from those employment taxes required to be withheld from the benefits due Plan participants and their beneficiaries. The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan shall be determined by the Committee and any claim for such benefits shall be considered and reviewed by the Committee under the procedures set out in the Plan.

 

2.3           The Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan, The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the Icons of the Plan, the Company shall make the balance of each such payment as it falls due. Trustee shall notify the Company where principal and earnings are not sufficient to cover payments required by the Payment Schedule under paragraph 2.1 hereof.

 

ARTICLE III

TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY
WHEN COMPANY IS INSOLVENT

 

3.1           The Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the company is Insolvent. The Company shall be considered “Insolvent” for purposes of this Trust Agreement if (i) the Company is unable to pay its debts as they become due, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code or under state court receivership law.

 

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3.2           At all times during the continuance of the Trust as provided in paragraph 1.3 hereof, the principal and income of the Trust shall be subject to claims of general creditors of the company under federal and state law as set forth below:

 

3.2.1        The Board of Directors and the Chief Executive Officer of the Company shall have the duty to inform the Trustee in writing of the Company’s Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries.

 

3.2.2        Unless the Trustee has actual knowledge of the Company’s Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company’s solvency as may be furnished to the Trustee by the Company and that provides the Trustee with a reasonable basis for making a determination concerning the Company’s solvency. The Trustee may hire accountants at the expense of the Trust Fund to assist it in making such a determination concerning the Company’s solvency.

 

3.2.3        If at any time the Trustee has determined that the company is Insolvent, the Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold assets of the Trust for the benefit of the Company’s general creditors. While so holding such assets, the Trustee shall make payments to such creditors if the Company shall so direct or, if the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy code or state receivership law, as a court of competent jurisdiction shall direct. Nothing in this Trust Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of the Company with respect to benefits due under the Plan or otherwise.

 

3.2.4        The Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Article II of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent).

 

3.3           Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to paragraph 3.2. hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by the Company in lieu of the payment provided for hereunder during any such period of discontinuance.

 

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ARTICLE IV

DUTIES AND POWERS OF THE TRUSTEE

 

4.1           The Trustee shall act with the care, skill, prudence and diligence under the circumstance then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company or the Committee which is contemplated by, and in conformity with, the terms of the Plan or this Trust and is given in writing by the Company or the Committee. In the event of a dispute between the Company and a party, the Trustee may apply to a court of competent jurisdiction to resolve the dispute.

 

4.2           The Trustee shall follow the written directions of the Committee with respect to investing and reinvesting the Trust Fund. The Company shall be responsible to ensure that such written directions of the Committee are made in accordance with the Plan and are not contrary to taw. The Trustee shall have no responsibility to monitor investments of the Trust Fund and shall not be liable for any investment losses or other consequences resulting from any action or inaction of the Company or the Committee with respect to the investments of the Trust Fund. Subject to said directions, the Trustee shall have the power:

 

4.2.1        To purchase or subscribe for and invest in any securities, but not including any securities of the Trustee or any affiliate of the Trustee, and to retain any such securities in the Trust Fund. Without in any way intending to limit the generality of the foregoing, the said term “securities” shall be deemed to include common and preferred stocks, mortgages, debentures, bonds, notes or other evidences of indebtedness, and other forms of securities. All rights associated with assets of the Trust shall be exercised by the Trustee, or by the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan participants. The Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity. Upon the written direction of the committee, the Trustee shall invest and reinvest all or a portion of the Trust Fund in shares of any open-ended investment fund or company, including those managed by an affiliate of the Trustee.

 

4.2.2        To deal with all or any part of the Trust Fund; to acquire any property by purchase, subscription, lease, or other means; to sell for cash or on credit, convey, lease for long or short terms, or convert, redeem, or exchange all or any part of the Trust Fund; to hold part of the Trust Fund uninvested or in savings accounts or certificates of deposit offered by the Trustee, or in money market funds managed by the Trustee or an affiliate of the Trustee.

 

4.2.3        To vote, or give proxies to vote, any stock or other security, and to waive notice of meetings, to oppose, participate in, and consent to the reorganization, merger, consolidation, or readjustment of the finances of any enterprise, to pay assessments and expenses in connection therewith and to deposit securities under deposit agreements.

 

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4.2.4        To register any investment held in the Trust in its own name or in the name of its nominee, or to hold any investment in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust.

 

4.2.5        To make, execute, acknowledge and deliver any and all documents, deeds and conveyance, and any and all other instruments necessary or appropriate to carry out the powers herein granted.

 

4.2.6        To enforce by suit or otherwise, or to waive, it right on behalf of the Trust Fund, and to defend claims asserted against it or the Trust Fund; to compromise, adjust and settle any and all claims against or in favor of it or the Trust Fund.

 

4.2.7        To renew, extend, or foreclose any mortgage or other security; to bid on property in foreclosure; to take deeds in lieu of foreclosure, with or without paying a consideration therefor.

 

4.2.8        To employ agents necessary for the operation of the Trust and to request the advice and assistance of counsel, including counsel for the Company, or other counsel designated by the Committee or by the Trustee.

 

4.2.9        In the event that the Company authorized the transfer of all or a portion of the assets of the Trust to an insurance company, to enter into and execute on behalf of the Trust all such documents and instruments necessary or appropriate to carry out such transfer.

 

4.2.10      To do all such other acts, execute all such other instruments and take such other proceedings and exercise all such other privileges and rights with relation to any asset constituting a part of the Trust as are necessary to carry out the purpose of the Trust, and no person dealing with the Trustee shall be bound to see to the application of any money or property paid or delivered to the Trustee or to inquire into the validity or propriety of any such transaction.

 

4.3           No persons dealing with the Trustee shall be under any obligation to see to the proper application of any money paid or property delivered to the Trustee or to inquire into the Trustee’s authority as to any transaction.

 

4.4           The Trustee may make any distribution required hereunder by mailing its check for the specified amount, or delivering the specified property, to the person to whom such distribution or payment is to be made, at such address as may have been last furnished to the Trustee, or if no such address shall have been furnished, to such person in care of the Company, or to the Committee or (if so directed by the Committee) by crediting the account of such person or by transferring the funds to such person’s account by bank or wire transfer.

 

ARTICLE V

DISPOSITION OF INCOME

 

During the term of this Trust, all income received, net of expenses and taxes, shall be accumulated and reinvested.

 

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ARTICLE VI

LIMITATION OF TRUSTEE’S LIABILITY

 

6.1           The Trustee shall be accountable only for funds actually received by it hereunder and shall have no duty or liability to determine that the amount of the funds received by it comply with the provisions of the Plan. If the Company has established a contract with an insurance company to carry out the purposes of the Plan, the Trustee shall not be liable for the acts or omissions of such insurance company, or be under an obligation to invest or otherwise manage the portion of the Trust Fund, which is subject to the management of such insurance company.

 

6.2           Whenever the Trustee is required or authorized to take any action hereunder pursuant to any written direction or notice of the Committee or the Company, the Trustee, acting in accordance with such direction or notice, shall not be responsible for the administration of such Plan or Trust, for the correctness of any payments or disbursements from the Trust, or for any other action taken by the Trustee in accordance with such written direction or notice. Such direction or notice shall be sufficient protection to the Trustee if contained in writing signed by the Committee or such other person authorized to execute documents on behalf of the Committee, in the case of direction or notice required to be given by the Committee; or by any officer of the Company, in the case of direction or notice required to be given by the Company.

 

6.3           The Company shall indemnify and hold harmless the Trustee from and against any losses, costs, damages or expenses, including reasonable attorneys’ fees, which the Trustee may incur or pay out by reason of (i) the Trustee’s acting in accordance with the directions of the Company or the Committee or failing to act in the absence of such directions; (ii) the Trustee’s exercise and performance of its powers and duties hereunder, unless the same are determined to be due to the Trustee’s gross negligence, bad faith or willful misconduct; (iii) any (alleged or actual) action or inaction on the part of the Company or the Committee, unless such losses, costs, damages, or expenses arise out of the Trustee’s gross negligence, bad faith, or willful misconduct; or (iv) the Plan at any time fails to be exempt from the requirements of Parts 2, 3 and 4 of Title I of the Employee Retirement Income Security Act of 1974, as amended. In addition, in the event that the Trustee undertakes or defends any litigation (including but not limited to any audit, proceeding or any other administrative action of any state, local or federal taxing authority) arising in connection with the Trust Fund, the Company agrees to indemnity the Trustee against the Trustee’s reasonable costs, expenses, and liabilities (including, without limitation, reasonable attorneys’ fees and expenses) relating thereto and to be primarily liable for such payments. If the company does not pay such costs, expenses, and liabilities described in this paragraph in a reasonably timely manner, the Trustee may obtain payment from the Trust Fund.

 

ARTICLE VII

EXPENSES AND COMPENSATION

 

The Trustee shall be paid such reasonable compensation as shall from time to time be agreed upon by the Trustee and the Company. AU administrative expenses, charges, taxes and assessments of the Trust Fund and Trustee’s fees shall be paid from the Trust Fund, and lithe Trust Fund is insufficient to cover all such costs, the balance thereof shall be paid by the Company.

 

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ARTICLE VIII

SUBSTITUTION AND SUCCESSION OF TRUSTEE

 

8.1           The Trustee may resign at any time by giving written notice to the Committee. Such resignation shall become effective thirty (30) days thereafter or upon the appointment of a successor Trustee, whichever occurs first. In the event a successor Trustee is not appointed within thirty (30) days, the Trustee may turn over the assets of the Trust to the Committee as successor Trustee. The Committee may remove the Trustee by giving thirty (30) days written notice to the Trustee of such intent to remove, and by then giving written notice of the appointment of a successor Trustee. The removal shall become effective upon acknowledgment of the receipt of the assets of the Trust by the successor Trustee. Each successor Trustee under this Trust shall be appointed in writing by the Committee and shall accept the Trust in writing. Such successor Trustee shall become vested with any estate, property, right, power and duty of the predecessor Trustee hereunder with like effect, as if originally named Trustee. No successor Trustee shall be liable for any act or failure of any predecessor Trustee, and with the approval of the Committee, a successor Trustee may accept the account rendered and the property delivered to it by the predecessor Trustee without in so doing incurring any liability or responsibility with respect to acts of default, if any, of the predecessor Trustee.

 

8.2           Any corporation into which the Trustee may merge or with which it may consolidate, or any corporation resulting from any merger or consolidation to which the Trustee may be party, shall be the successor of the Trustee hereunder, without the execution or filing of any additional instrument of the performance of any further act.

 

ARTICLE IX

ARTICLE IX ACCOUNTING PROVISIONS

 

9.1           The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and ail other transactions required to be made in the administration of the Trust Fund.

 

9.2           Within a reasonable time after the close of each fiscal year, or of any termination of the duties of the Trustee hereunder, the Trustee shall prepare and deliver to the Committee an account of its acts and transactions as Trustee during such fiscal year or during such period from the close of the last fiscal year to the termination of the Trustee’s duties, respectively, including a statement of the then current value of the Trust Fund. Any such account shall be deemed accepted and approved by the Committee, and the Trustee shall be relieved and discharged, as if such account had been settled and allowed by a judgment or decree of a court of competent jurisdiction, unless protested by written notice to the Trustee within sixty (60) days of receipt thereof by the Committee.

 

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9.3           The Trustee or the Committee shall have the right to apply at any time to a court of competent jurisdiction for judicial settlement of any account of the Trustee not previously settled as herein provided or for the determination of any question of construction or for instructions. In any such action or proceeding it shall be necessary to join as parties only the Trustee and the Committee (although the Trustee may also join such other parties as it may deem appropriate), and any judgment or decree entered therein shall be conclusive.

 

ARTICLE X

AMENDMENT AND TERMINATION

 

10.1         This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable.

 

10.2         The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust, any assets remaining in the Trust shall be returned to the Company.

 

ARTICLE XI

SUCCESSOR COMPANY

 

Unless this Trust be sooner terminated, a successor to the business of the Company, by whatever form or manner resulting, which succeeds said Company under the Plan as therein provided shall, upon notice in writing from the Committee that all action required by the Plan to effect such succession has been taken, also succeed to all the right, powers and duties of such Company hereunder.

 

ARTICLE XII

CONSTRUCTION AND PAYMENT

 

12.1         The Trust shall be construed and administered according to the laws of the jurisdiction in which the principal office of the Trustee is located. In any question of interpretation or other matter of doubt, the Trustee may rely upon the opinion of counsel for the Company or Committee or any other attorney at law designated by the Company with approval of the Trustee.

 

12.2         No person having any present or future interest in the Trust shall have any right to assign, transfer, encumber, commute or anticipate his payment under this Trust and such payment shall not in any way be subject to any legal process or levy of execution upon, or attachment or garnishment proceeding against, the same for the payment of any claim against any person having an interest hereunder, nor shall such payment be subject to the jurisdiction of any bankruptcy court or insolvency proceedings.

 

ARTICLE XIII

MISCELLANEOUS

 

13.1         The titles to the Articles in this Trust Agreement are included for convenience of reference only and are not to be used in interpreting this Trust Agreement.

 

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13.2         Neither the gender nor the number (singular or plural) of any word shall be construed to exclude another gender or number when a different gender or number would be appropriate.

 

13.3         This Trust Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall together constitute only one Trust Agreement.

 

13.4         Communications to the Trustee shall be sent to the Trustee’s principal office or to such other address as The Trustee may specify in writing. No communication shall be binding upon the Trustee until it is received by the Trustee. Communications to the Committee or the Company shall be sent to the Company’s principal office or to such other address as the Company may specify in writing.

 

13.5         The effective date of this Trust Agreement shall be April 1, 2007.

 

IN WITNESS WHEREOF, the Company and the Trustee have caused this instrument to be executed this 28th day of March, 2007.

 

	 	
Company: Innotrac, Inc.

	 
	 	 	 	 
	 	 	 	 
	 	Christine A. Herren	 
	 	Name of Officer (please print)	 
	 	 	 	 
	 	By:	/s/ Christine A. Herren	 
	 	 	Signature of Officer	 
	 	 	 	 
	 	 	 	 
	 	Trustee: Investors Bank and Trust Company	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ John Capece	 
	 	 	Signature of Officer	 
	 	 	 	 
	 	State Street Bank and Trust, as	 
	 	Successor in interest to	 
	 	Investors Bank & Trust Company	 

 

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