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ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

ASSET PURCHASE AGREEMENT | Document Parties: Domaincom, Inc | StarTek, Inc You are currently viewing:
This Asset Purchase Agreement involves

Domaincom, Inc | StarTek, Inc

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Delaware     Date: 5/8/2009
Industry: Business Services     Law Firm: Hogan Hartson;Sherman Howard     Sector: Services

ASSET PURCHASE AGREEMENT, Parties: domaincom  inc , startek  inc
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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


 
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