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EXHIBIT 10.20
CONTRIBUTION AGREEMENT
AGREEMENT, dated as of September 15, 1999 (the "Agreement"), among GOOD
CATALOG COMPANY, a Delaware corporation (the "Company") THE READER'S DIGEST
ASSOCIATION, INC., a Delaware corporation ("RDA"), and XXXXXX.XXX, INC., a
Delaware corporation ("Domain").
W I T N E S S E T H:
WHEREAS, RDA and StarTek, Inc., the parent company of Domain, have
entered into a letter agreement, dated August 12, 1999, pursuant to which RDA
has agreed to cause the Company, its wholly-owned subsidiary, to sell and issue
shares of its Common Stock, $1.00 par value (the "Common Stock") to StarTek or
its subsidiary, in return for certain cash investments and the contribution of
the domain name and URL xxx.xxxxx.xxx; and
WHEREAS, Domain owns all right, title and interest in and to the domain
name and URL xxx.xxxxx.xxx;
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements and covenants herein set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. CONTRIBUTION OF STOCK
1.1 Contribution by Domain. On the terms and subject to the
conditions of this Agreement, Domain agrees at the Closing (as defined in
Section 1.4) to contribute or cause to be contributed to the Company all of
Domain's and all of its affiliates' right, title and interest in and to the
domain name and URL xxx.xxxxx.xxx, the name "xxxxx.xxx," including all
trademarks related thereto, all trademark applications therefore and all
goodwill associated therewith (the "Xxxxx.xxx Rights").
1.2 Cash Investment. On the terms and subject to the conditions of
this Agreement, Domain agrees at the Closing to invest in the Company cash in
the amount of $2,605,625.
1.3 Consideration. In consideration of Domain's contribution to
the Company described in Section 1.1 and 1.2 above, Domain shall receive at the
Closing 199 shares of Company Common Stock.
1.4 The Closing. The contribution of assets described in Sections
1.1 and 1.2, and the exchange of consideration therefor pursuant to this Article
1 shall be held at the offices of Loeb & Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx xx November 1, 1999 or at such other place and time as the parties
shall mutually agree (the "Closing" Date).
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1.5 Deliveries by Domain. At the Closing, Domain shall deliver the
following:
(a) An instrument of assignment substantially in the form of
Exhibit A hereto, assigning all of Domain's right, title and interest in and to
the Xxxxx.xxx Rights to the Company, duly executed, by Domain (the
"Assignment");
(b) The Stockholders Agreement, among Domain, RDA and the
Company substantially in the form of Exhibit B hereto (the "Stockholders
Agreement"), duly executed by Domain;
(c) A Fulfillment Services Agreement between StarTek and the
Company, substantially in the form of Exhibit C hereto (the "Fulfillment
Agreement"), duly executed by StarTek;
(d) UCC financing statements in accordance with Section 4.B.
of the Fulfillment Agreement;
(e) $2,605,625 cash contribution pursuant to Section 1.2, by
wire transfer of immediately available funds to a bank account of the Company
designated to Domain as set forth in Exhibit A to the Loan Agreement (as defined
herein);
(f) The Loan Agreement among Domain and RDA, as lenders, and
the Company, as borrower, substantially in the form of Exhibit D hereto duly
completed (the "Loan Agreement") duly executed by Domain;
(g) A loan to the Company pursuant to the Loan Agreement in
the aggregate principal amount of $7,816,875;
(h) A certificate of a duly authorized officer of Domain and
StarTek as to the satisfaction of the conditions to the Closing set forth in
Sections 3.2(a) and (b) hereof; and
(i) An opinion of Xxxxx, Johnson, Robinson, Xxxx & Ragonetti,
P.C., counsel to StarTek and Domain, substantially in the form of Exhibit E.
1.6 Deliveries by the Company and RDA. The Company and RDA shall
deliver the following:
(a) a certificate representing 199 shares of Company Common
Stock, registered in the name of Domain;
(b) The Services Agreement between RDA and the Company,
substantially in the form of Exhibit F hereto (the "Services Agreement"), duly
executed by the Company and RDA;
(c) The Stockholders Agreement, duly executed by the Company
and RDA;
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(d) The Fulfillment Services Agreement, duly executed by the
Company;
(e) The Loan Agreement, duly executed by RDA and the Company;
(f) A loan by RDA in the aggregate principal amount of
$18,433,125, as reduced by all amounts previously loaned by RDA to the Company
as contemplated in the Loan Agreement;
(g) Promissory notes payable to Domain and RDA, in
substantially the form provided in the Loan Agreement (the "Notes"), duly
completed and executed by the Company;
(h) A certificate of a duly authorized officer of RDA and the
Company as to the satisfaction of the conditions to the Closing set forth in
Sections 3.1(a) and (b) hereof; and
(i) Opinion of Loeb & Loeb LLP, counsel to the Company and
RDA, substantially in the form of Exhibit G hereto.
1.7 Transaction Documents. As used herein, "Transaction Documents"
shall mean the Assignment, the Stockholders Agreement, the Guarantee, the
Services Agreement, the Fulfillment Agreement, the Loan Agreement, the Notes and
any other ancillary or related documents.
2. REPRESENTATIONS AND WARRANTIES
2.1 RDA. RDA represents and warrants that, as of the date hereof:
(a) Business Plan. RDA has contributed to the Company all of
RDA's right title and interest in and to the FY: '00 Business Plan of Xxxxx.xxx
dated May 14, 1999, free and clear of all liens, security interests, pledges,
charges, encumbrances or restrictions of any kind whatsoever ("Encumbrances").
(b) Cash Contributions and Prepaid Expenses. RDA has
contributed to the equity capital of the Company cash and prepaid expenses in
the amount of $6,144,375, representing costs incurred or committed by, or cash
funding of the development by the Company of, an Internet Web site to sell gifts
on-line. RDA has contributed to the Company all right, title and interest in and
to all property acquired or developed by RDA on behalf of the Company with such
prepaid expenses free and clear of all Encumbrances.
(c) Authorization, Execution and Delivery. The execution,
delivery and performance by RDA of this Agreement and the Transaction Documents
to which it is a party, and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary action
on the part of RDA. This Agreement constitutes and, effective upon execution and
delivery by RDA, each Transaction Document to which it is a party will
constitute, legal, valid and binding obligations of RDA, enforceable
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against RDA in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity regardless of whether considered in a proceeding in equity
or at law.
(d) No Violation. Neither the execution or delivery by RDA of
this Agreement or any of the Transaction Documents to which RDA is a party nor
the consummation of the transactions contemplated herein or therein will: (i)
violate any provision of the Certificate of Incorporation or bylaws of RDA; (ii)
violate, or constitute a default under, permit the termination or acceleration
of the maturity of or cause the loss of any rights or options under, any
material contract to which RDA is a party; (iii) require any authorization,
consent or approval of, exemption or other action by, or notice to, any party to
any material contract to which RDA is a party; or (iv) violate any law to which
RDA is subject.
(e) Regulatory Approvals. No consent, approval, authorization,
notice, filing, exemption or other requirement of RDA must be obtained from any
governmental authority in order for (i) the execution or delivery by RDA of this
Agreement or any of the Transaction Documents or (ii) the consummation by RDA or
the Company of the transactions contemplated herein or therein.
(f) Company. To the knowledge of RDA, without investigation,
the representations and warranties of the Company in Section 2.3 are true and
correct as of the dated deemed made.
2.2 Domain and A. Xxxxx Xxxxxxxxxx, Xx. Domain represents and
warrants and, with respect to Sections 2.2(a) and 2.2(b), Domain and A. Xxxxx
Xxxxxxxxxx, Xx., to his knowledge without investigation, jointly and severally
represent and warrant, as of the date hereof and the Closing Date:
(a) Ownership of Xxxxx.xxx Rights. Domain has the sole right
in and to the URL xxx.xxxxx.xxx registered with InterNIC, free and clear of all
Encumbrances, and to Domain's and A. Xxxxx Xxxxxxxxxx, Xx.'s knowledge, without
investigation, Domain is the owner of the other Xxxxx.xxx Rights, free and clear
of all Encumbrances, except rights which the corporation formed in Delaware (or
any other state) under the name "xxxxx.xxx" may have acquired and any rights
X.X. Penney may have acquired by registering and using the domain name
"xxxx.xxx" (collectively, the "Known Conflicts").
(b) Non-Infringement. To the knowledge of Domain and A. Xxxxx
Xxxxxxxxxx, Xx., without investigation, the use by the Company of the Xxxxx.xxx
Rights following the Closing will not infringe any trademark, service xxxx,
trade or business name or other right of any other Person, except to the extent
any of the Xxxxx.xxx Rights are found to infringe on any of the Known Conflicts.
(c) Authorization, Execution and Delivery. The execution,
delivery and performance by Domain of this Agreement and the Transaction
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action on the part of Domain. This
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Agreement constitutes and, effective upon execution and delivery by Domain, each
Transaction Document to which it is a party will constitute, legal, valid and
binding obligations of such party, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject, as
to enforceability, to general principles of equity regardless of whether
considered in a proceeding in equity or at law.
(d) No Violation. Neither the execution or delivery by StarTek
or Domain of this Agreement or any of the Transaction Documents to which either
is a party nor the consummation of the transactions contemplated herein or
therein will: (i) violate any provision of the Certificate of Incorporation or
bylaws of StarTek or Domain; (ii) violate, or constitute a default under, permit
the termination or acceleration of the maturity of or cause the loss of any
rights or options under, any material contract to which StarTek or Domain is a
party; (iii) require any authorization, consent or approval of, exemption or
other action by, or notice to, any party to any material contract to which
StarTek or Domain is a party; or (iv) violate any law to which StarTek or Domain
is subject.
(e) Regulatory Approvals. No consent, approval, authorization,
notice, filing, exemption or other requirement must be obtained from any
governmental authority in order for (i) the execution or delivery by StarTek or
Domain of this Agreement or any of the Transaction Documents and (ii) the
consummation by StarTek or Domain of the transactions contemplated herein or
therein.
(f) Obtaining Shares Entirely for Own Account. Domain is
acquiring the Common Stock for investment for Domain's own account, not as a
nominee or agent, and not with a view to, or for the resale or distribution of
any part thereof. Domain has no present intention of selling, granting any
participation in, or otherwise distributing the Common Stock. Domain further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the shares of the Common
Stock, except as set forth in the Stockholders Agreement.
(g) Disclosure Information. Domain has received from the
Company and RDA all information which it and its representatives have requested
and consider necessary or appropriate in deciding whether to make its
contribution to the Company in consideration of Common Stock as described in
Article 1. The foregoing does not limit or modify the representations and
warranties in Sections 2.1 and 2.3 or the right of Domain to rely thereon.
(h) Investment Experience. Domain (i) fully understands that
an investment in the Company is highly speculative and that it may lose its
entire investment, (ii) is experienced in evaluating and investing in companies
such as the Company and businesses such as an on-line gifts business, (iii) is
capable of evaluating the merits and risks of its investment; (iv) is able to
bear the economic risk of a loss of the entire amount of its investment; and (v)
is prepared to hold the Common Stock received pursuant hereto for an indefinite
period of time.
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(i) Accredited Investor. Domain is an "accredited investor"
within the meaning of Securities and Exchange Commission Rule 501 of Regulation
D, as presently in effect.
(j) Restricted Shares. Domain acknowledges that, because the
Common Stock issued in connection with this Agreement has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), the Common
Stock must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available. Domain is
aware of the provisions of Rule 144 promulgated under the Securities Act which
permits limited resale of shares purchased in a private transaction subject to
the satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less than one (1)
year after a party has purchased and paid for the security to be sold, the sale
being through a "broker's transaction" or in transactions directly with a
"market maker" (as provided by Rule 144(f)) and the number of shares being sold
during any three (3) month period not exceeding specified limitations (unless
the sale is within the requirements of Rule 144(k)).
2.3 The Company. The Company represents and warrants that, as of
the date hereof and the Closing Date:
(a) Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
has all requisite power to own, lease and operate its assets, properties and
business and to carry on its business as presently conducted; and is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of its business or the
location of its properties requires such qualification or licensing, except for
such jurisdictions where the failure to so qualify or be licensed would not have
a material adverse effect on the Company.
(b) Capitalization. The authorized capital stock of the
Company consists solely of 5000 shares of common stock, $1.00 par value per
share, of which 801 shares are issued and outstanding and owned by RDA. Upon
issuance of the Common Stock issuable to Domain on the Closing Date, such shares
shall be validly issued, fully paid and non-assessable. Except as contemplated
in this Agreement, there are no outstanding options, warrants, rights or
agreements for the purchase or acquisition from the Company of any shares of
capital stock.
(c) Authorization, Execution and Delivery. The execution,
delivery and performance by the Company of this Agreement and the Transaction
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action on the part of the Company. This Agreement constitutes and,
effective upon execution and delivery by the Company, each Transaction Document
to which it is a party will constitute, legal, valid and binding obligations of
the Company, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity regardless of whether considered in a proceeding in
equity or at law.
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(d) No Violation. Neither the execution or delivery by the
Company of this Agreement or any of the Transaction Documents to which the
Company is a party nor the consummation of the transactions contemplated herein
or therein will: (i) violate any provision of the Certificate of Incorporation
or bylaws of the Company; (ii) violate, or constitute a default under, permit
the termination or acceleration of the maturity of or cause the loss of any
rights or options under, any material contract to which the Company is a party;
(iii) require any authorization, consent or approval of, exemption or other
action by, or notice to, any party to any material contract to which the Company
is a party; or (iv) violate any law to which the Company is subject.
(e) Regulatory Approvals. No consent, approval, authorization,
notice, filing, exemption or other requirement of the Company must be obtained
from any governmental authority in order for the execution or delivery by the
Company of this Agreement or any of the Transaction Documents.
(f) Subsidiaries. The Company does not own any interest in any
other corporation, limited liability company, partnership or other entity.
(g) Financial Statements. Attached hereto as Exhibit H are the
unaudited balance sheets (the "Most Recent Balance Sheet") and the related
statements of income, changes in stockholders' equity, and cash flow
(collectively, the "Financial Statements") as of and for the nine months ended
June 30, 1999 (the "Most Recent Fiscal Month End") for the Company. The
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby and present fairly the financial condition of the Company as of
such dates and the results of operations of the Company for such period, subject
to normal year-end adjustments (which will not be material individually or in
the aggregate) and lack footnotes and other presentation items. Since the Most
Recent Fiscal Month End, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of the Company.
(h) Undisclosed Liabilities. The Company does not have any
material liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, including any liability for
taxes), except for (i) liabilities set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (ii) liabilities which have
arisen after the Most Recent Fiscal Month End in the ordinary course of
business.
(i) Legal Compliance. The Company has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand or notice
has been filed or, to the knowledge of the Company, commenced against it
alleging any failure so to comply, except where the failure to comply would not
have a material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of the Company.
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(j) Tax Matters.
(i) The Company has filed all Tax Returns that it was required
to file. All such Tax Returns were correct and complete in all material
respects. All Taxes owed by the Company (whether or not shown on any Tax Return)
have been paid. The Company is not the beneficiary of any extension of time
within which to file any Tax Return.
(ii) For purposes of this agreement, "Tax" or "Taxes" means
federal, state, county, local, foreign or other income, gross receipts, ad
valorem, franchise, profits, sales or use, transfer, registration, excise,
utility, environmental, communications, real or personal property, capital
stock, license, payroll, wage or other withholding, employment, social security,
severance, stamp, occupation, alternative or add-on minimum, estimated and other
taxes of any kind whatsoever (including, without limitation, deficiencies,
penalties, additions to tax, and interest attributable thereto) whether disputed
or not. "Tax Return" means any return, information report or filing with respect
to Taxes, including any schedules attached thereto and including any amendment
thereof.
(k) Litigation. The Company (i) is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge, and (ii)
there is no material claim, action, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or relating to the Company
before any court or quasi-judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator.
(l) Year 2000 Compliance. To the Company's knowledge, none of
the computer software, computer firmware, computer hardware (whether general or
special purposes) or other similar or related items of automated, computerized
or software systems that are used or relied on directly by the Company in the
conduct of its business will malfunction, will cease to function, will generate
incorrect data or will produce incorrect results when processing, providing or
receiving (a) date-related data from, into and between the twentieth and
twenty-first centuries or (b) date-related data in connection with any valid
date in the twentieth and twenty-first centuries ("Year 2000 Compliance"), in
each instance in such a manner as to cause material adverse harm to the Company
and the Company will not be required to incur any further material expense in
order to become Year 2000 Compliant. The Company believes that it will not be
subject to any material liability or claims by its customers or employees due to
its failure to be Year 2000 Compliant. The Company has developed reasonable
contingency plans to deal with the possibility that some of its customers and
suppliers may not be Year 2000 Compliant.
(m) Acquisition of Assets. To the best of the Company's
knowledge, no material breach of any representation, warranty or covenant exists
under that certain Asset Purchase Agreement by and between the Company (f/k/a
Reader's Digest Sub Six, Inc.), as buyer, and Good Catalog Company, an Oregon
corporation, as seller and since the closing of such agreement there has not
been any adverse change in the Company's assets, liabilities or the Company's
relationship with its employees which change could be reasonably expected to
have a material adverse effect on the Company's business or property.
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(n) Neither this Agreement nor any of the documents or other
information made available to Domain or its Affiliates, attorneys, accountants,
agents or representatives pursuant hereto in connection with Domain's due
diligence review of the Company or the transactions contemplated by this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements contained therein not misleading; provided that information as of a
later date shall be deemed to modify information as of an earlier date.
3. CONDITIONS TO CLOSING
3.1 Conditions to the Obligations of Domain. The obligations of
Domain under Section 1.5 of this Agreement are subject to the fulfillment, or
written waiver by Domain party, on or before the Closing, of each of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of RDA and the Company contained in Section 2 shall be true on and as
of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing Date.
(b) Authorizations. All authorizations, permits and approvals
(including Board of Directors and stockholder approvals) required for RDA's and
the Company's consummation of the transactions contemplated hereby as of the
date of the Closing shall have been received. RDA and the Company shall have
performed and complied in all material respects with all agreements, covenants
and conditions contained herein and in all other documents contemplated hereby
that are required to be performed or complied with by such party on or before
the Closing.
(c) Consents; No Restrictions. RDA and the Company shall have
received all consents, approvals, waivers and authorizations required from any
government authority for any party to consummate the transactions contemplated
hereby, and such consents, approvals, waivers and authorization shall be in full
force and effect. No injunction or other order issued by any government
authority, nor any statute, rule, regulation or decree which declares any
Transaction Document invalid in any respect or prevents the consummation of the
transactions contemplated hereby or thereby shall be in effect.
(d) Deliveries. RDA and the Company shall have made all
deliveries required by Section 1.6.
3.2 Conditions to the Obligations of RDA and the Company. The
obligations of each of RDA and the Company under Section 1.6 of this Agreement
are subject to the fulfillment, or written waiver by such party, on or before
the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Domain and A. Xxxxx Xxxxxxxxxx, Xx., contained in Section 2 shall
be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
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(b) Authorizations. All authorizations, permits and approvals
(including Board of Directors and stockholder approvals) required for StarTek's
and Domain's consummation of the transactions contemplated hereby as of the date
of the Closing shall have been received. Domain shall have performed and
complied in all material respects with all agreements, covenants and conditions
contained herein and in all other documents contemplated hereby that are
required to be performed or complied with by such party on or before the
Closing.
(c) Consents; No Restrictions. StarTek and Domain shall have
received all consents, approvals, waivers and authorizations required from any
government authority for any party to consummate the transactions contemplated
hereby, and such consents, approvals, waivers and authorization shall be in full
force and effect. No injunction or other order issued by any government
authority, nor any statute, rule, regulation or decree which declares any
Transaction Document invalid in any respect or prevents the consummation of the
transactions contemplated hereby or thereby shall be in effect.
(d) Deliveries. StarTek and Domain shall have made all
Deliveries required by Section 1.5.
4. COVENANTS
4.1 Transfer of URL with NSI. The Company agrees that it shall
take no action to amend, transfer or change the registration of the URL
xxx.xxxxx.xxx with Network Solutions, Inc. until the Company has completed the
name change provided for in Section 4.2.
4.2 Name Change, Etc. RDA and the Company agree that they shall
use their reasonable commercial efforts as promptly as practicable to effect a
change of the name of the Company to "Xxxxx.xxx, Inc." or "Xxxxx.xxx." Such name
change may be effected by amendment to the Certificate of Incorporation of the
Company or merger of the Company with and into another corporation (including a
corporation organized in another jurisdiction), with the surviving corporation
having the name "Xxxxx.xxx, Inc." or "Xxxxx.xxx."
5. MISCELLANEOUS PROVISIONS
5.1 Survival of Representations and Warranties. All of the
representations and warranties of the Company, RDA, Domain and with respect to
Section 2.2(a) and 2.2(b) A. Xxxxx Xxxxxxxxxx, Xx., contained in this Agreement
shall survive the Closing for a period of one year.
5.2 Confidentiality. Each party (the "receiving party") agrees to
keep in confidence all information about the other party (the "disclosing
party") obtained in connection with the transactions proposed hereby
("Confidential Information") except for Confidential Information which (i) is
public knowledge, (ii) is required to be disclosed by law or under the rules of
the New York Stock Exchange, (iii) was independently developed by the receiving
party, or (iv) was already in the receiving party's possession from a source
which the receiving party reasonably believed, after due inquiry, owed no duty
of confidentiality to the disclosing party. In addition, the receiving party
agrees that it will not use the Confidential Information for any purpose other
than for the purpose of performing its obligations under this
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Agreement or the Transaction Documents, as applicable. The parties agree that,
in view of the unique nature of the confidential Information to be disclosed
hereunder, irreparable loss could be sustained by the disclosing party in the
event of an unauthorized disclosure of Confidential Information and the
disclosing party would not have an adequate remedy at law in such event.
Therefore, the parties agree that each party hereto shall be entitled to
injunctive relief, including specific enforcement, to enforce the provisions of
this Section 5.2, in addition to any remedy to which a disclosing party may be
entitled to at law, and the receiving party against whom injunctive relief is
sought agrees not to raise the defense that there is an adequate remedy at law.
5.3 Communications. Unless otherwise provided therein, all notices
and other communications or designations required or permitted by this Agreement
shall be in writing, and,
If to RDA, to:
The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Senior Vice President
Facsimile: 000-000-0000
With a copy to:
The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: 000-000-0000
or at such other address as RDA may designate in a written notice
to Domain.
If to the Company, to:
Good Catalog Company
c/o The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000-0000
Attention: Senior Vice President, Business Planning and Development
Facsimile: 000-000-0000
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With a copy to:
The Reader's Digest Association, Inc.
Reader's Xxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: 000-000-0000
or to such other address as the Company may designate in a written
notice to Domain.
If to Domain, to:
Xxxxxx.xxx, Inc.
c/o StarTek, Inc..
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Chairman
Facsimile: (000) 000-0000
With a copy to:
StarTek, Inc.
0000 X Xxxxxx
Xxxxxxx, XX 00000
Attention: President and Chief Executive Officer
Facsimile: (000) 000-0000
and a copy to:
Xxxxx, Johnson, Robinson, Xxxx & Xxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as Domain may designate in a written notice to
RDA and the Company.
All notices and other communications required or permitted by this Agreement
shall be deemed to have been duly given if personally delivered to the intended
recipient at the proper address determined pursuant to this Section 5.3 or sent
to such recipient at such address by air courier, facsimile transmission,
followed by delivery by overnight courier, or by hand and will be deemed given,
unless earlier received: (a) if sent by courier when recorded on the records of
the courier as received by the receiving party; (b) if sent by facsimile, upon
transmission if on a Business Day and during business hours in the country of
receipt, otherwise, at 9:00 a.m. on the
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next Business Day in the location of receipt, subject to receipt of a facsimile
machine generated confirmation, and (c) if delivered by hand, on the date of
receipt.
5.4 References.
(a) Except as otherwise specified in this Agreement, all
references in this Agreement (i) to any Person shall be deemed to include such
Person's permitted heirs, personal representatives, successors and assigns; (ii)
to any agreement, document or other written instrument shall be a reference to
such agreement, document or instrument together with all exhibits, schedules,
attachments and appendices, thereto, in each case as amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof; and (iii) to any law, statute or regulation
specifically defined or referred to in this Agreement shall be deemed references
to such law, statute or regulation as the same may be supplemented, amended,
consolidated, superseded or modified from time to time.
(b) The words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation." The words "herein,"
"hereof" and "hereunder" and words of similar import, when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and references to "Article," "Section," "Exhibit,"
"Schedule," and "Appendix" are references to this Agreement unless otherwise
specified. Whenever the context so requires, words importing any gender include
the other gender. Any of the terms defined in this Agreement may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference; the singular includes the plural and the plural includes the
singular.
5.5 StarTek's Indemnification. StarTek shall indemnify the Company
and RDA from and against any losses, costs, damages, claims or liabilities,
including costs of defense and fees and expenses of counsel (each a "Loss") (but
not any punitive, exemplary, expectancy or consequential damages) actually
incurred by the Company and/or RDA directly arising out of any breach of the
representations and warranties made by Domain in Section 2.2 of this Agreement,
up to a maximum aggregate indemnification liability of $5,000,000.
The Company and/or RDA shall notify StarTek of any loss, liability,
claim or damage incurred, threatened or commenced by or against such party which
is covered by this Agreement with reasonable promptness. StarTek shall have, at
its election made on a timely basis, the right to compromise, defend or cure
with regard to any such claim, suit or proceeding involving an actual or
potential Loss (a "Claim") through counsel of its own choosing at StarTek's sole
expense if the reasonably foreseeable liability is less than $5,000,000;
provided, however, StarTek shall not be entitled to settle or compromise any
Loss, without the prior written consent of the Company, unless such settlement
provides for a complete release of any and all claims by the third-party to the
URL xxx.xxxxx.xxx. On any Claim involving a potential loss in which StarTek has
the right and chooses to defend an indemnified party hereunder, the indemnified
party shall have the right to engage separate counsel of its choosing and to
participate in the prosecution, defense, compromise or settlement thereof or to
conduct its own defense. In the event StarTek undertakes to compromise, defend
or cure a Claim, StarTek shall so notify the Company and RDA on or before
fifteen (15) days after the receipt of the above
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notice furnished by the Company and/or RDA setting forth its intention to do so
and the Company and RDA shall reasonably cooperate in all respects with StarTek
in defending or curing any such Claim.
5.6 Consent to Jurisdiction; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed in that State. The
Company, Domain and RDA irrevocably and unconditionally (i) agree that any suit,
action or proceeding against such party arising out of this Agreement may be
brought in any New York State or Federal court sitting in New York, New York or
Westchester County, New York, or in any Colorado State or Federal court sitting
in the City and County of Denver, Colorado, (ii) waive, to the fullest extent
such party may effectively do so, any objection which such party may have to
laying of venue of any such suit, action or proceeding and (iii) submit to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding and
agree that any process or notice of motion or other application to any court may
be served on such party within or outside such court's territorial jurisdiction
by registered or certified mail or by personal service at such party's address
set forth above.
5.7 Binding Effect; Successors and Assigns; Entire Agreement.
Except as expressly provided in this Agreement, nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon or give any
Person (including creditors and affiliates of any party) other than the parties
hereto any remedy or claim under or by reason of this Agreement or any term,
covenant or condition hereof, all of which shall be for the sole and exclusive
benefit of the parties. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors, legal representatives and permitted assigns; provided, however,
that, except as otherwise specifically permitted by this Agreement, neither this
Agreement nor any of the rights, interests or obligations of any party hereunder
shall be assigned or delegated without the prior written consent of the party
which is the non-assigning or non-delegating party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, any party shall
have the right to assign its rights and obligations hereunder without the other
parties' consent to a wholly-owned subsidiary or in the event of a merger or
sale of all or substantially all of the assets of such party, including the
merger contemplated pursuant to Section 4.2. This Agreement sets forth the
entire agreement and understanding among the parties hereto as to the subject
matter hereof and merges and supersedes all prior discussions and agreements
between the parties.
5.8 Amendments and Waivers. This Agreement may not be amended,
modified or supplemented unless approved in writing by each party to this
Agreement. No waiver of any right or remedy or of compliance with any provisions
hereof, and no consent provided for herein, shall be effective unless evidenced
by an instrument in writing executed by the party sought to be charged with such
waiver or consent. The rights and remedies herein expressly provided are
cumulative and not exclusive of any other rights or remedies which any party
hereto would otherwise have at law, in equity, by statute or otherwise.
5.9 Headings. The headings of the Sections contained in this
Agreement are solely for convenience of reference, are not part of the agreement
of the parties and shall not affect the meaning or interpretation of this
Agreement.
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5.10 No Implied Waivers. No action taken pursuant to this
Agreement, including, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any representations, warranties, agreements, covenants, obligations or
commitments contained herein or made pursuant hereto. The waiver by any party of
a breach of any provision of this Agreement shall not operate or be construed as
a waiver of any preceding or succeeding breach and no failure by any party to
exercise any right, privilege or remedy hereunder shall be deemed a waiver of
such party's rights, privileges or remedies hereunder or shall be deemed a
waiver of such party's rights to exercise the same at any subsequent time or
times hereunder.
5.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original of the party or
parties executing the same and all of which together shall be deemed to
constitute one and the same agreement. A facsimile signature of a counterpart
executed copy of this Agreement shall be treated as an original.
5.12 Further Assurances. Each party shall cooperate and take such
actions as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
5.13 Construction. RDA, the Company and Domain have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by RDA, the Company and Domain and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
5.14 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation execution, and performance of this
Agreement and the Transaction Documents, including all fees and expenses of
agents, representatives, counsel and accountants. In the event of breach of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from the breach of this Agreement by another
party and in such case the expenses, including reasonable attorneys fees and
costs, of the enforcement of this Agreement shall be borne by the unsuccessful
party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GOOD CATALOG COMPANY
By:/s/ Xxxxx X. Xxxxxxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President
THE READER'S DIGEST ASSOCIATION, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President, Business Planning
and Development
XXXXXX.XXX, INC.
By: /s/ A. Xxxxx Xxxxxxxxxx, Xx.
-------------------------------------------------
Name: A. Xxxxx Xxxxxxxxxx, Xx.
Title: Chairman and Vice President
The undersigned, A. Xxxxx Xxxxxxxxxx, Xx., hereby executes this Agreement in
connection with his representation and warranty in Sections 2.2 (a) and 2.2(b)
of this Agreement.
------------------------------------
A. Xxxxx Xxxxxxxxxx, Xx.
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The undersigned, A. StarTek, Inc., hereby executes this Agreement in connection
with its indemnification in Section 5.5 of this Agreement.
STARTEK, INC.
By: /s/ A. Xxxxx Xxxxxxxxxx, Xx
------------------------------------------
Name: A. Xxxxx Xxxxxxxxxx, Xx.
Title: Chairman
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Exhibits and Schedules not filed
