MASTER SERVICES AGREEMENT
BY AND BETWEEN
EXECUTONE INFORMATION SYSTEMS, INC.
AND
UNISTAR GAMING CORP.
MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT, dated as of ____________, 1998, between
EXECUTONE INFORMATION SYSTEMS, INC., a Virginia corporation ("Executone") and
its wholly owned subsidiary, UNISTAR GAMING CORP., a Delaware corporation
("Unistar"), is entered into in connection with a Reorganization Agreement dated
as of the date of this Agreement.
WHEREAS in the interest of orderly transition, Unistar wishes to continue
to receive certain services of Executone, as hereinafter specifically provided,
for a limited period after the date hereof; and the parties desire to set forth
herein the basis on which the services shall be made available to and paid for
by Unistar;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
1. The services to be rendered by Executone under this Agreement are set
forth in Exhibit A attached hereto and made a part hereof and are hereinafter
referred to as "the Services." The Services may be rendered by Executone, by
subsidiaries or affiliates of Executone or by third parties, as Executone shall
determine; provided, however, that before any Services that heretofore have been
rendered by Executone are contracted out to third parties, Executone shall so
notify Unistar and Unistar may discontinue such Services upon notice to
Executone in accordance with Section 3(b). The Services shall include a license
to Unistar to occupy and use the space (approximately 1500 square feet)
currently occupied by it at 000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx;
together with the right to use the exterior sidewalks, grounds, entrance areas,
lobbies, hallways, lavatories, stairways, elevators, cafeteria, health club,
copy center, mailroom, parking spaces, and certain furniture, fixtures and
equipment located within the premises and neither owned by nor to be transferred
to Unistar pursuant to the Reorganization Agreement (the "Office Premises"), for
which Unistar shall pay the costs set forth in Exhibit A.
2. Unistar agrees to pay Executone for the Services during the term of
this Agreement in accordance with Exhibit A, and any other payment provisions of
this Agreement. Except as otherwise expressly provided in Exhibit A, Unistar
acknowledges and agrees that the payment to Executone for the Services hereunder
are intended to compensate Executone at least for its costs, including, without
limitation, out-of-pocket costs, expenses and disbursements (including the
salaries of the Executone employees allocable to their providing such Services)
and its allocable overhead. Unistar acknowledges and agrees that Executone may
adjust the prices set forth on Exhibit A each three months to reflect (i) what
Executone reasonably determines are its increased costs related thereto and (ii)
if a profit margin is included, an amount necessary to maintain that margin.
3. (a) The term of this Agreement shall commence on the day following
the date determined by the Executone Board as of which the transactions
constituting the Rights Offering will be closed (the "Rights Closing Date") and
end as provided herein. To the extent that any of the Services are rendered by
Executone after the date provided for termination of such Service herein, at the
request of Unistar as part of ongoing projects, the term of this Agreement shall
be deemed extended accordingly with respect to such Service only upon mutual
written consent of the parties.
(b) If Unistar desires to discontinue one or more of the Services, or
a part of a particular Service set forth in Exhibit A hereto, during the term of
this Agreement, Unistar shall give Executone at least 30 days' prior written
notice requesting discontinuance of such Service or part thereof and specifying
the date of discontinuance. If the requested discontinuance would result in
Executone's incurring or absorbing expenses that Executone would not have
incurred or absorbed but for the discontinuance, Unistar shall reimburse
Executone for such reasonable expenses. Once so discontinued, a Service need not
again be rendered by Executone unless Executone, in its sole discretion, is
willing to do so upon terms and conditions to be agreed upon. If Unistar elects
to discontinue a Service in part, Executone may elect to discontinue such
Service in full.
(c) Executone may at any time in its sole discretion, upon not less
than 90 days' prior written notice to Unistar (immediately in the case of any
Services that Executone ceases to perform or render for itself and its
subsidiaries), terminate all the Services, and from time to time so terminate
any one or more of the Services or any part of a particular Service without
liability to Unistar or any other person for any loss, damage or expense
(including without limitation, lost profits or other consequential damage which
may result therefrom).
4. Unistar shall issue purchase orders to Executone for any specific
services it desires that are not specified in Exhibit A, and upon written
agreement of the parties such services will be governed by the terms and
conditions of this Agreement. Executone shall render to Unistar an invoice
within 30 days after the end of each calendar month, covering the Services
rendered under this Agreement during such calendar month, and Unistar shall
remit to Executone in cash the net amount thereof within 30 days after receipt
of invoice.
5. Executone shall determine Executone's corporate facilities and the
individuals by which the Services are rendered.
6. Nothing in this Agreement will require Executone to render any service
not provided for in this Agreement or excluded by Exhibit A, or to render
Services in quantities greater than the quantities taken by the operations of
Unistar and its subsidiaries during the three- month period ended September 30,
1998, or in a manner or methods different from the manner or methods employed
for the benefit of Executone, or, in performing the Services, to make any change
or addition that will require capital expenditures.
7. The duties of Executone under this Agreement are subject to
interruption or discontinuance by Executone at any time and from time to time,
without liability to Unistar or any other person for any loss, damage or expense
which may result therefrom, for force majeure or other causes beyond Executone's
control or, in the case of any particular Service, upon 30 days' prior written
notice if Executone reasonably determines that its performance of such Service
results in costs or liabilities to Executone materially greater than the payment
for such Service by Unistar hereunder, unless Unistar shall agree to pay such
higher costs or make provisions reasonably acceptable to Executone to cover such
liabilities, as the case may be.
8. Executone will use reasonable efforts to make the Services available in
substantially the same manner as it makes the same Services available for its
own operations, but Executone shall not be liable to Unistar or any other person
for any loss, damage or expense that may result therefrom, for negligent
performance by Executone or from Executone changing its manner of rendering the
Services if Executone deems the same necessary or desirable in the conduct of
its own operations. If Executone for any reason ceases to make available any of
the Services, or any part of a particular Service, to or within its own
operations, which is the means by which Executone renders the Services covered
by this Agreement, Executone may, upon giving written notice to Unistar,
discontinue making available such Service or part to Unistar without liability
other than a reduction in amounts to be paid by Unistar commensurate with the
Service or part discontinued. To the extent that any Service is provided both to
Unistar and to Executone itself or one of its subsidiaries or affiliates (other
than Unistar) Executone shall be entitled to give priority to serving itself or
its subsidiary or affiliate.
9. No right of Unistar under this Agreement shall, without Executone's
prior written consent, be assignable or otherwise transferable by Unistar
voluntarily or by operation of law, whether by merger, sale of assets or
otherwise. If Unistar shall be subject to a change in control following which
one-third or more of the members of Unistar's Board of Directors shall be
replaced, Executone shall be entitled upon such change in control to terminate
this Agreement.
10. The Services hereunder shall be rendered by Executone as an
independent contractor.
IN WITNESS WHEREOF, Executone and Unistar have caused this Agreement to be
duly executed by their respective officers, each of whom is duly authorized, all
as of the day and year first above written.
EXECUTONE INFORMATION SYSTEMS, INC.
By: ____________________________
Name ____________________________
Title:____________________________
UNISTAR GAMING CORP.
By: ____________________________
Name: ____________________________
Title:____________________________
Exhibit A
Services To Be Provided by Executone
Legal Services
Contracts, Securities and Exchange Commission and stock exchange filings,
corporate secretary functions, and performance and supervision of related Legal
Services, including state corporation and business license filings, patent and
trademark services:
Term: 120 days from Rights Closing Date unless extended by mutual written
agreement.
$/Hour
Fees: In-house attorney services $ 95.00
In-house paralegal services $ 45.00
Litigation and other services Billed rate
provided by third parties (plus all
out-of-pocket
expenses paid to
third parties)
Payroll Services, Benefit and Human Resource Administration
Payroll Administration Services consist of the preparation and bulk
distribution of payrolls, preparation of regulatory and various tax reports,
benefits and other deduction reports, workmen's compensation and unemployment
filing and audits and miscellaneous payroll services. Benefit administration
services consist of the administration of pension (401k) and reporting, welfare
plans including life insurance, health insurance, disability coverage, savings
plans and regulatory report compliance and filings.
Term: 120 days from the Rights Closing Date unless extended month to month
by mutual written agreement.
Fees: $400 per month.
Office Premises
The license to use the Office Premises shall expire (unless extended in by
mutual written agreement of Executone and Unistar) at midnight 120 days from the
Rights Closing Date.
The charge for the use of the Office Premises shall be $1.67 per month per
occupied square foot of the Office Premises. The current three employees of
Unistar occupy approximately 859 square feet for a monthly rental of $1,434.53.
This fee will include payment for electric current for overhead lights and
outlets, telephone service charges, mail room and copy services, security
services, reception, maintenance of telephone and voice mail systems, facility
administration, office and kitchen supplies, janitorial services, extra HVAC
charges and miscellaneous building expenses.
The costs of postage and labor for any Unistar bulk mailings will be billed to
Unistar separately as incurred. Unistar shall establish its own Federal Express
or other expedited delivery service accounts as required. Copy center charge
includes items covered in Executone's contract with the third party copy service
provider. Any special items or projects not included in the contract will be
billed separately to Unistar. Health Club billing will be based on membership
totals and will be a separate charge to Unistar.
Computer Services
Computer Services consist of the following:
1. Provide all processing services on the same calendar and daily time
schedule existing at the date of the Agreement for general ledger,
accounts payable and payroll processing interface.
2. Revise the processing schedule, when coordinated in a timely manner
and mutually agreed to.
3. Furnish the same backup service existing at date of Agreement (under
contract with third parties).
4. Continue all other current, regular, routine systems and maintenance
services on the same arrangements existing at the date of the
Agreement.
5. Take appropriate steps to ensure that application programs and
related data, or any portion of them are kept confidential.
Term: 120 days from the Rights Closing Date unless extended by mutual
written agreement.
Fees: $400 per month plus an hourly rate of $75 per hour for special
projects.
Finance Services
Finance Services consist of the General Ledger, Accounts Payable, Cash
Management and certain tax-related filings specified below.
Finance Services will include Unistar and National Indian Lottery ("NIL")
Closing and preparation of Financial Statements.
1. NIL Closing and Financial Statements includes reconciliation to
Unistar and other account analysis being regularly performed at the
date of this Agreement.
2. Unistar Closing and Financial Statements includes account analysis
being regularly performed at the date of this Agreement.
3. The Finance Services will also include up to eight hours per month
of additional analysis and special accounting work that may be
required to adequately close the books.
Closing and Financial Statements Services include all journal entries, fixed
asset accounting and preparation of the Balance Sheets, Income Statements and
Cash Flow Statements along with supporting schedules for expenses.
Accounts Payable Services include invoice processing, filing and mailing of up
to 400 checks per month, preparation of vendor purchase summaries, accounts
payable, agings and transaction reports, and handling all related vendor
inquiries.
Cash Management Services include the following:
1. Print, match and reconcile merchant receipts to business system for
up to 3,000 transactions per month.
2. Match, review and notify player disbursement for processing for up
to 400 checks per month.
3. Maintain and reconcile bank accounts similar to the accounts
existing at the date of this Agreement.
4. Analyze and reconcile business reports to the General Ledger File
and review annual filings for W2-G's and Occupational Taxes.
Term: 120 days unless extended by mutual written agreement.
Fees: $6,667 monthly, plus Billable Manpower will be billed at a rate of
$75.00 per hour.
Billable Manpower includes time spent on special projects for Unistar,
not listed herein or in excess of the quantities stated herein, by
Executone employees and contractors that may be also assigned to various
tasks specifically associated with Executone.
Billable Manpower does not include any contract employees or consultants
hired specifically to perform custom development, modifications or
maintenance for Unistar systems, which will be billed to Unistar at
cost.
Stockholder and Investor Relations Services
Stockholder and Investor Relations Services include responding to inquiries
regarding stockholder accounts, mailing of investor information packages and
discussion of public information with current and prospective stockholders and
investors.
Term: 120 days unless extended by mutual written agreement.
Fees: $500
