8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 28, 2012

STARTEK, INC.

(Exact name of Registrant as specified in its charter)

DELAWARE	1-12793	84-1370538
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

44 Cook Street Suite 400, Denver, Colorado 80206

(Address of principal executive offices; zip code)

Registrant’s telephone number, including area code:  (303) 262-4500

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On February 28, 2012, StarTek, Inc. (the “Company”) and StarTek USA, Inc., a wholly owned subsidiary of the Company, entered into a Credit and Security Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”).  The Credit Agreement is effective February 28, 2012 through February 28, 2015.  The amount the Company may borrow under the Credit Agreement is the lesser of the borrowing base calculation and $10 million, and, so long as no default has occurred, the Company may increase the maximum availability to $20 million in $2.5 million increments.  The Company may request letters of credit under the Credit Agreement in an aggregate amount equal to the lesser of the borrowing base calculation (minus outstanding advances) and $5 million. The borrowing base is generally defined as 85% of our eligible accounts receivable less reserves for foreign exchange forward contracts and other reserves as defined in the Credit Agreement.

Borrowings under the Credit Agreement bear interest at the daily three-month LIBOR index plus 2.50% to 3.00% depending on the calculation of the fixed charge coverage ratio, as defined in the Credit Agreement.  Until the first monthly report of the fixed charge coverage ratio, the interest rate will be the daily three-month LIBOR index plus 3.00%.  The Company will pay letter of credit fees on the average daily aggregate available amount of all letters of credit outstanding monthly at a rate per annum of 3.0% and a monthly unused fee at a rate per annum of 0.30% on the aggregate unused commitment under the Credit Agreement.

The Company granted Wells Fargo a security interest in all of its assets, including all cash and cash equivalents, accounts receivable, general intangibles, owned real property, equipment and fixtures.  In addition, under the Credit Agreement, the Company is subject to certain standard affirmative and negative covenants, including the following financial covenants: 1) maintaining a minimum adjusted EBITDA, as defined in the credit Agreement, of no less than the monthly minimum amounts set forth in the Credit Agreement and 2) limiting non-financed capital expenditures during 2012 to $6.5 million, provided that such expenditures would not cause the ratio of excess availability, as defined in the Credit Agreement, to aggregate non-financed capital expenditures to be less than 1:50 to 1:00.  The requirement for non-financed capital expenditures may be increased quarterly by an amount equal to 50% of any positive variance between budgeted and actual adjusted EBITDA results measured at the end of each quarter.  The Company and Wells Fargo are required to agree on financial covenants for the remaining term of the Credit Agreement beyond 2012, and any failure to do so will constitute an event of default.

Item 1.02 Termination of a Material Definitive Agreement.

On February 28, 2012, the Company terminated its business loan agreement and promissory note for a $7.5 million secured revolving line of credit with UMB Bank Colorado, N.A (“UMB Bank”).  The agreement was set to expire on August 1, 2012.  At the time the agreement was terminated and the Credit Agreement became effective, there were no amounts outstanding under the line of credit.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information under Item 1.01 is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits.
99.1	Press release, dated February 28, 2012, announcing that StarTek, Inc. entered into a new credit facility with Wells Fargo Bank.

2

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

STARTEK, INC.
By:	/s/ Lisa A. Weaver	Date: February 29, 2012
Lisa A. Weaver
Senior Vice President, Chief Financial Officer and Treasurer

3

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release, dated February 28, 2012, announcing that StarTek, Inc. entered into a new credit facility with Wells Fargo Bank.

4

EX-99.1

Exhibit 99.1

INVESTOR RELATIONS CONTACT:

Julie Patterson

Sr. Director of SEC Reporting, StarTek, Inc.

303-262-4587

julie.patterson@startek.com

StarTek, Inc. Announces an Expanded $20 Million Credit Facility with Wells Fargo Bank

DENVER, CO — February 28, 2012 - StarTek, Inc. (NYSE:SRT), a leading provider of business process outsourcing services, today announced that it has signed an agreement with Wells Fargo Bank, N.A. for a three-year $20 million secured revolving credit facility.  The amount the Company may borrow under the revolving credit facility is subject to a borrowing base calculation, and has an initial availability of $10 million, with the flexibility to borrow up to $20 million at the Company’s option.  The facility will replace the Company’s $7.5 million secured line of credit with UMB Bank, which was to expire in August 2012.  The interest rate on borrowings will decrease from LIBOR plus 3.75% to LIBOR plus 2.50%-3.00% under the new agreement.

Chad Carlson, StarTek’s President and Chief Executive Officer commented, “We are pleased to have secured this expanded credit facility and to be working with Wells Fargo Bank.  We believe the new facility is an important component of our capital structure and provides the flexibility required to fund our growth and execute on our strategic initiatives.”

About StarTek

StarTek, Inc. (NYSE: SRT) is a global provider of business process outsourcing services with over 9,000 employees committed to making a positive impact on our clients’ business results for 25 years and counting.  Our company mission is to enable and empower our Brand Warriors to fight for our clients’ brands every day to bring value to our stakeholders. We accomplish this by developing goal congruency with our clients’ business objectives resulting in a trusted partnership.  The StarTek Advantage is the sum total of our culture, customized solutions and processes that solve our clients’ service challenges.  It drives improved customer experiences and reduced costs.  StarTek has proven results for the multiple services we provide including sales, order management and provisioning, customer care, technical support, receivables management, and retention programs.  We manage programs using a variety of multi-channel customer interaction capabilities including voice, chat, email, IVR and back-office support.  StarTek has delivery centers in the U.S., Philippines, Canada, Costa Rica and Honduras and virtually through its StarTek@Home workforce.  For more information, visit www.StarTek.com or call +1 303.262.4500.

Forward-Looking Statements

The matters regarding the future discussed in this news release include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be identified in this document by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should” and similar expressions.   As described below, such statements are subject to a number of risks and uncertainties that could cause StarTek’s actual results to differ materially from those expressed or implied by any such forward-looking statements. These factors include, but are not limited to, risks relating to our reliance on two significant customers, consolidation by our clients, the concentration of our business in the telecommunications industry, pricing pressure, maximization of capacity utilization, lack of success of our clients’ products and services, consolidation of vendors by our clients, interruptions to the Company’s business due to geopolitical conditions and/or natural disasters, foreign currency exchange risk, lack of minimum purchase requirements in our contracts, ability to hire and retain qualified employees, the timely development of new products or services, failure to implement new technological advancements, increases in labor costs, lack of wide geographic diversity, continuing unfavorable economic conditions, our ability to effectively manage growth,

increases in the cost of telephone and data services, unauthorized disclosure of confidential client or client customer information, risks inherent in the operation of business outside of North America, ability of our largest stockholder to affect decisions, stock price volatility, variation in quarterly operating results, inability to renew or replace sources of capital funding and, should we make acquisitions, the effective and timely integration of such acquisitions.  Readers are encouraged to review Item 1A. - Risk Factors and all other disclosures appearing in the Company’s Form 10-K for the year ended December 31, 2010, as well as Item 1A. — Risk Factors and all other disclosures in the Company’s subsequent Form 10-Qs, filed with the Securities and Exchange Commission, for further information on risks and uncertainties that could affect StarTek’s business, financial condition and results of operation.