Exhibit 10.1
ASSET PURCHASE
AGREEMENT
This ASSET PURCHASE AGREEMENT, dated
as of February 25, 2009 (this “ Agreement
”), is made by and between StarTek, Inc., a Delaware
corporation (“ Parent ”), Domain.com, Inc.,
a Delaware corporation ( “Seller” ), and A.
Emmet Stephenson Jr., Inc., a Colorado corporation (“
Purchaser ”).
RECITALS:
WHEREAS, Parent is a provider of
business process outsourcing services to the communications
industry and is the owner of all of the issued and outstanding
capital stock of Seller;
WHEREAS, Seller owns registrations
of domain names and provides related services (the “
Business ”); and
WHEREAS, Seller has decided to sell
the Business, and in accordance therewith, Purchaser desires to
purchase, and Seller desires to sell and transfer, certain assets
used or held for use in the Business upon the terms and subject to
the conditions specified in this Agreement.
NOW, THEREFORE, in consideration of
the premises and the covenants, promises, and agreements herein set
forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, agree as follows.
ARTICLE I
PURCHASE AND SALE OF ASSETS
Section 1.1
Purchase and Sale of Assets; Purchase Price. On the date
hereof and upon the terms and subject to the conditions provided
below, Seller shall convey, assign, transfer and deliver to
Purchaser all of Seller’s right, title and interest in, to
and under, if any, consistent with Section 3.3, the assets
listed on Schedule 1.1 hereto, (the
“Assets” ). In exchange for the Assets,
Purchaser shall pay to Seller cash in the aggregate amount of
$7,075,000 (the “ Purchase Price ”).
Seller shall be entitled to retain all revenues that are received
with respect to the Assets through the Closing (as defined below),
and Purchaser shall be entitled to retain all revenues that are
received with respect to the Assets after the Closing (determined
in both cases by using a cash basis method of
accounting).
Section 1.2
Assumed Liabilities. Purchaser assumes from Seller, and
Seller assigns to Purchaser, all liabilities and obligations of
Seller listed on Schedule 1.2 (collectively, the
“Assumed Liabilities” ), which shall be the sole
responsibility of Purchaser after the Closing. Purchaser
agrees to pay, perform and discharge the Assumed Liabilities as and
when they become due and to indemnify Seller against all claims,
losses and expenses relating to the Assumed Liabilities.
Notwithstanding anything to the contrary in this Agreement,
(a) all Assumed Liabilities that are not transferable without
consent from any other party or parties thereto shall be deemed to
have been assigned and assumed as of the date hereof, irrespective
of any failure to obtain such consent, and (b) all liabilities
of Seller that are not Assumed Liabilities will remain the
obligation of Seller.
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Section 1.3
Closing . The closing of the sale and purchase of the Assets
under this Agreement (the “Closing” ) shall take
place on the date hereof. The effective time of the
transactions contemplated hereby shall be at 12:01 a.m.,
Mountain Time, on the date hereof (the “ Effective
Time ”). At the Closing, Seller shall deliver or
cause to be delivered to Purchaser the fully executed Bill of
Sale,
Assignment, and Assumption Agreement
(the “Bill of Sale” ), in the form attached
hereto as Schedule 1.3 , under which Seller shall assign,
and Purchaser shall assume, the Assets and Assumed
Liabilities. At the Closing, Purchaser shall deliver or cause
to be delivered to Seller the Purchase Price in cash and the Bill
of Sale, duly executed by Purchaser.
Section 1.4
Allocation of Purchase Price . The Purchase Price will
be allocated for tax purposes in accordance with the allocation
schedule attached to be prepared by Purchaser and to be delivered
to Seller and Parent not later than ten business days after the
Closing. Purchaser will ensure that the allocation schedule
is prepared in accordance with Section 1060 of the Internal
Revenue Code. After the Closing, the parties will make
consistent use of the allocation, fair market value and useful
lives specified in such schedule for all tax purposes and in all
filings, declarations and reports with the Internal Revenue Service
( “IRS” ) in respect to the transactions
contemplated by this Agreement, including the reports required to
be filed under Section 1060 of the Internal Revenue
Code. Purchaser will prepare and deliver the IRS Forms 8594
to Seller within forty-five (45) days after the Closing Date to be
filed with the IRS. In any proceeding or investigation
related to the determination of any tax, none of Purchaser, Seller
or Parent shall contend or represent that such allocation is not a
correct allocation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to
Seller that, as of the Closing:
Section 2.1
Capacity and Enforceability. Purchaser has the legal
capacity to execute and deliver this Agreement and the documents to
be executed and delivered by Purchaser pursuant to the transactions
contemplated hereby. This Agreement and the documents to be
executed and delivered by Purchaser pursuant to the transactions
contemplated hereby have been duly executed and delivered by
Purchaser and, assuming due authorization, execution and delivery
hereof and thereof by the other parties hereto and thereto,
constitutes the valid and binding agreement of Purchaser,
enforceable against Purchaser in accordance with their
terms.
Section 2.2
Absence of Restrictions and Conflicts . The execution and
delivery by Purchaser of this Agreement and the documents to be
executed and delivered by Purchaser pursuant to the transactions
contemplated hereby do not, and the performance of each of
Purchaser’s obligations hereunder and thereunder will not,
(a) conflict with or violate any law applicable to Purchaser
or by which any property or asset of Purchaser is bound, or
(b) violate or conflict with, constitute a breach of or
default under, result in the loss of any benefit under, permit the
acceleration of any obligation under or create in any party the
right to terminate, modify or cancel, (i) any contract, will,
agreement, permit, franchise, license or other instrument
applicable to Purchaser (ii) any judgment, decree or order of
any governmental entity to which Purchaser is a party or by which
any of its properties are bound or (iii) arbitration award
applicable to Purchaser.
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Section 2.3
Compliance with Laws . To the knowledge of Purchaser
(and Purchaser acknowledges that an affiliate of Purchaser is
Seller’s sole employee), Seller is in compliance with all
laws applicable to its Business except where the failure to do so
has not had, and would not reasonably be expected to have a
material adverse effect on either the assets, business, operations,
personnel or condition (financial or otherwise) of
Seller.
Section 2.4
Formation and Transfer of Corporations . Purchaser
(a) acknowledges and agrees that Seller has formed certain
corporations under the laws of the state of Delaware under the
direction of an affiliate of Purchaser (the “ Corporate
Names ”), (b) waives any right to seek
indemnification from Seller and Parent under this Agreement with
respect to any Loss (as defined below) to the extent that such Loss
arises in connection with the incorporation of any Corporate Names
and (c) shall indemnify and hold harmless the Seller and its
affiliates from any and all Losses (regardless of whether the
liability, cost or expense relates to the period before or after
the date of this Agreement) relating in any way to the formation or
filing or payment of state franchise tax obligations related to the
Corporate Names.
Section 2.5
As Is, Where Is . PURCHASER HEREBY ACKNOWLEDGES AND AGREES
THAT, BASED ON PURCHASER’S INDEPENDENT INVESTIGATION OF THE
ASSETS AND THE BUSINESS, SELLER IS SELLING AND PURCHASER IS
PURCHASING THE ASSETS ON AN “AS IS, WHERE IS” BASIS
WITHOUT ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE ASSETS OR THE
BUSINESS, INCLUDING INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED
IN CONNECTION WITH THE ASSETS, THE PHYSICAL CONDITION OF ANY OF THE
ASSETS, THE VALUE OF THE ASSETS (OR ANY PORTION THEREOF), THE
MERCHANTABILITY OR FITNESS OF THE ASSETS FOR ANY PARTICULAR
PURPOSE, EXCEPT AS SUCH MATTERS MAY BE AFFECTED BY THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE III OF THIS
AGREEMENT.
Section 2.6
No Broker. Purchaser has not entered into any
contract, arrangement or understanding with any Person that may
result in the obligation of Parent, Seller or Purchaser to pay any
finder’s fees, brokerage or agent’s commissions or
other like payments to any finder, broker or sales agent in
connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Seller and Parent jointly and
severally represent and warrant to Purchaser that, as of the
Closing:
Section 3.1
Incorporation and Good Standing; Authority and
Enforceability. Seller is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State
of Delaware. Seller has all necessary corporate power and authority
to execute and deliver this Agreement and the documents to be
executed pursuant to the transactions contemplated hereby, to
perform their obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby. This
Agreement and the documents to be executed and delivered by Seller
pursuant to the transactions contemplated hereby have been duly
approved by all requisite corporate action of Seller, including
approval by the board of directors of Seller, and have been
executed and delivered by Seller and, assuming due authorization,
execution and delivery hereof and thereof by the other parties
hereto and
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thereto, constitutes the valid and
binding agreement of Seller, enforceable against Seller in
accordance with their terms.
Section 3.2
Absence of Restrictions and Conflicts. The execution and
delivery by Seller of this Agreement and the documents to be
executed and delivered by Seller pursuant to the transactions
contemplated hereby does not, and the performance of each of
Seller’s obligations hereunder and thereunder will not,
(a) conflict with or violate any provision of the certificate
of incorporation or bylaws of Seller, (b) conflict with or
violate any law applicable to Seller or by which any property or
asset of Seller is bound, or (c) violate or conflict with,
constitute a breach of or default under, result in the loss of any
benefit under, permit the acceleration of any obligation under or
create in any party the right to terminate, modify or cancel,
(i) any contract, will, agreement, permit, franchise, license
or other instrument applicable to Seller, (ii) any judgment,
decree or order of any governmental entity to which Seller is a
party or by which any of its properties are bound or (iii) any
arbitration award applicable to Seller.
Section 3.3
Title to Assets. The Assets are free and clear of all
liens and encumbrances; provided , however , that
Purchaser acknowledges and agrees that the Assets are subject to
the terms of the contracts that constitute a portion of the
Assets. Seller has not sold, transferred, leased, licensed,
pledged, exchanged, mortgaged, or otherwise disposed of any right
to any of the Corporate Names, each of which was formed by the
filing of a certificate of incorporation with the Delaware
Secretary of State. Seller has exclusive ownership of
the registration rights to each of the domain names listed on
Schedule 1.1 , and all rights to renew the registration of
each such domain name. Upon execution and delivery of the
Bill of Sale to Purchaser, (i) exclusive ownership of the
registration rights to each of the domain names listed on
Schedule 1.1 (including but not limited to the passwords and
authorization codes for the domain names and all rights to renew
the domain names) will be conveyed to Purchaser and
(ii) Seller’s right, title and interest in all other
Assets will be conveyed to Purchaser, subject only to
Purchaser’s waiver of rights in
Section 2.4(b).
Section 3.4
Absence of Undisclosed Liabilities . Seller has no
liability, debt, obligation or liability of any type, contingent or
otherwise, liquidated or unliquidated, known or unknown, of any
nature or in any amount (a “ Liability ”), and
there is no basis for any such Liability, that would affect the
transfer to Purchaser of Seller’s title to the Assets or the
use and enjoyment of the Assets by Purchaser, except for any such
Liability as to which Purchaser has knowledge prior to the
Closing. For clarity, except for Liabilities known to
Purchaser prior to the Closing and not disclosed to Seller prior to
the Closing, the parties intend that Seller and Parent shall be
responsible under Section 5.1 for any Liability that is based
on facts, circumstances, or conditions prior to the Closing, and
that Purchaser shall be responsible for any Liability that is based
on facts, circumstances, or conditions after the
Closing.
Section 3.5
Litigation . Except as set forth on Schedule
3.5 , there is no suit, claim, action, arbitration, audit,
hearing or other legal proceeding (whether civil, criminal,
administrative or judicial, whether formal or informal, whether
public or private, or whether before a governmental body or
arbitrator), pending or to the knowledge of Seller, threatened,
against or relating to the Assets, or that challenges, or would
reasonably be expected to have the effect of preventing, delaying,
making illegal or otherwise interfering with, the transfer to
Purchaser of Seller’s title to the Assets or the use and
enjoyment of the Assets by Purchaser, except for any such matters
as to which Purchaser has knowledge.
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Section 3.6
No Broker. Neither Parent nor Seller has entered into
any contract, arrangement or understanding with any Person that may
result in the obligation of Parent, Seller or Purchaser to pay any
finder’s fees, brokerage or agent’s commissions or
other like payments to any finder, broker or sales agent in
connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
Section 4.1
Further Assurances; Cooperation . Subject to the other
provisions hereof, Seller, Parent, and Purchaser agree to use
commercially reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done as promptly as
practicable, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement. If at any time after the date hereof any further
action is necessary or desirable to carry out the purposes of this
Agreement, the parties to this Agreement shall take all such
necessary action. Without limiting the foregoing, the parties
shall execute, acknowledge and deliver any further deeds,
assignments, conveyances, and other assurances, documents and
instruments of transfer, reasonably requested by the other party
hereto, and will take, or cause to be taken, any other action
consistent with the terms of this Agreement that may reasonably be
requested by the other parties, for the purpose of assigning,
transferring, granting, conveying, and confirming to Purchaser, or
reducing to possession, any or all interests in the Assets to be
conveyed and transferred by this Agreement. Seller, Parent,
and Purchaser shall each use their best efforts to forward promptly
to the other party all notices, claims, correspondence and other
materials which are received and determined to pertain to the other
party.
Section 4.2
Public Announcements; Confidentiality .
(a)
Subject to its legal obligations, each party shall consult with the
other parties with respect to the timing and content of all
announcements regarding this Agreement or the transactions
contemplated hereby to the financial community, employees,
customers, suppliers or the general public and shall use reasonable
efforts to agree upon the text of any such announcement prior to
its release.
(b)
Seller, Parent, and Purchaser and their respective employees and
agents shall each hold in strict confidenc