1
EXHIBIT 10.27
CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN DELETED AND MARKED WITH AN ASTERISK.
STARTEK PACIFIC, INC.,
MANUFACTURING AGREEMENT
THIS STARTEK PACIFIC, LTD. MANUFACTURING AGREEMENT (the "Agreement") is
made and entered into as of January 1, 1998 (the "Effective Date"), by and
between StarTek Pacific, Ltd. Corporation ("StarTek Pacific"), a Colorado
corporation, and Mentor Media PTE, Ltd., a Singapore corporation ("Mentor
Media"). The parties acknowledge that Mentor Media Pacific, will perform the
manufacturing services under this Agreement.
RECITALS
WHEREAS, StarTek Pacific and Mentor Media intend to create a formal
relationship by which Mentor Media shall provide certain manufacturing services
with respect to orders for StarTek Pacific software products.
WHEREAS, the parties intend in this Agreement to set forth specific terms
and conditions governing the performance of certain manufacturing services by
Mentor Media for StarTek Pacific; and
NOW, THEREFORE, in consideration of the covenants and conditions set forth
below, the adequacy of which is agreed to and hereby acknowledged, the parties
agree as follows:
AGREEMENT
1. DEFINITIONS.
The following terms, whenever initially capitalized, shall have the following
meanings for the purposes of this Agreement:
(a) "BOM" shall mean the xxxx of materials document provided by StarTek
Pacific to Mentor Media, which xxxx of materials identifies all components
comprising a given Product or Product Component. BOMs may be modified in writing
prospectively from time to time by StarTek Pacific at its sole discretion.
(b) "CUSTOMERS" shall mean customers designated by StarTek Pacific,
including StarTek Pacific internal customers and distribution vendors, to whom
StarTek Pacific authorizes Mentor Media to deliver Product pursuant to the terms
and conditions of this Agreement and the Statement of Work.
(c) "DELIVERABLES" shall mean and include all code material, source
material, software masters or replicative material or other such documented
material, of any kind or description and in any form including compact disk,
other disks or diskettes, tape, text or any electronic or other medium supplied
by StarTek Pacific or at its direction. It does not include such materials if
held under an independent contractual relationship with an OEM (original
equipment manufacturer) which contract contains the requisite license. Nor does
it include Products acquired for office purposes and used by Mentor Media in its
offices.
(d) "FACILITY" shall mean the manufacturing facility operated, owned,
subcontracted or leased by Mentor Media, at *.
(e) "FINISHED PRODUCT UNIT" shall mean fully packaged StarTek Pacific
Product, which includes all requisite Product Components and StarTek Pacific
software, ready for delivery to a Customer.
(f) "INSOLVENT" shall mean a financial condition such as to make the sum of
a party's debts greater than all of the party's assets, at fair valuation; or,
when a party has incurred debts beyond that party's ability to pay such debts as
they mature; or, when a party is engaged in a business or transaction for which
the party has unreasonably small capital.
2
(g) "INTELLECTUAL PROPERTY" shall mean any and all trademarks, copyrights,
patents and other proprietary rights comprising or encompassing a given Product.
(h) "INVENTORY" includes Finished Product Units, work in process, Product
Components or raw materials pertaining to the Products that contain StarTek
Pacific software, trademarks, copyrighted material, logos or other proprietary
materials.
(i) "MANUFACTURE" OR "MANUFACTURING" shall mean the manufacture and supply
of Product Components and assembly of Products as described in the Statement of
Work.
(j) "PRODUCTS LIST" shall mean a list provided to Mentor Media by StarTek
Pacific from time to time that will list the Products to be manufactured by
Mentor Media pursuant to the terms of this Agreement.
(k) "PRODUCT(S)" shall mean the copyrighted and/or patented StarTek Pacific
software products, including Product Components, StarTek Pacific software, and
any associated documentation, packaging and other written materials, including,
where applicable, the specified user documentation, which StarTek Pacific may
request Mentor Media to Manufacture pursuant to this Agreement, by the issuance
of a purchase order .
(l) "PRODUCT COMPONENTS" shall mean each individual component listed on a
BOM as comprising a Product, such as, for example, disks, polyvinyl disk
baggies, documentation, boxes, *.
(m) "STATEMENT OF WORK" shall mean the attached Exhibit A, including any
modifications made thereto pursuant to Section 14(b).
(n) "TERRITORY" shall mean *.
(o) "UNACCOUNTED PRODUCTS" shall have the meaning as set forth in Section
9(e).
2. MANUFACTURING AND SERVICES.
(a) GENERAL. Mentor Media hereby agrees to Manufacture Products on the
Products List at the Facility pursuant to the terms and conditions set forth in
this Agreement, including without limitation, the Statement of Work. Mentor
Media shall not conduct Manufacturing at or from any location other than the
Facility without StarTek Pacific's prior written approval. In the event of any
conflict between the terms contained in this Agreement and terms contained in
the Statement of Work, the terms contained in this Agreement shall control.
(b) OTHER MANUFACTURING/SERVICES. In addition to Manufacturing services,
the parties may identify other manufacturing and/or services to be provided
under this Agreement through an addendum signed by the parties hereto.
(c) INVENTORY. All of the Inventory shall at all times be held exclusively
for assembly and delivery to Customers within the Territory as authorized by
StarTek Pacific (or as otherwise authorized by StarTek Pacific in writing) and
for no other purpose, use or disposition, except as may be directed in writing
by StarTek Pacific. Mentor Media shall at all times cause the Inventory to be
free and clear of any and all liens, encumbrances and other claims of its
creditors. Mentor Media grants StarTek Pacific the option, assignable to any
affiliated corporation, to acquire by purchase all of the Inventory (less
Finished Product Units which have already been purchased by StarTek Pacific)
upon * notice, and payment as would apply for unused Inventory in the case of
termination as stated in Section 10, at the price set forth at in Exhibit B. At
any time, upon StarTek Pacific's request, Mentor Media shall take all necessary
steps and shall execute such documents as may be necessary or advisable under
the local law where the Inventory is located, in order to effect the sale of
such Inventory to StarTek Pacific, and to document StarTek Pacific, title to
Inventory owned by StarTek Pacific. Use of Intellectual Property in any manner
by Mentor Media after expiration or termination of this Agreement for any
reason, whether or not incorporated in Inventory, shall be deemed to be in
violation of StarTek Pacific's Intellectual Property rights and shall entitle
StarTek Pacific to have all remedies provided by law or equity (including
injunctive relief); provided, however, (i) this does not
2
3
preclude Mentor Media from continuing to use in its offices StarTek Pacific.
Products legally acquired for that purpose; and (ii) it does not preclude Mentor
Media's performance of independent contractual relationships with StarTek
Pacific or an OEM (original equipment manufacturer) or other party, which
contract contains the requisite StarTek Pacific product replication license.
(d) AGREEMENT NOT TO SELL. Mentor Media acknowledges that, under the terms
of this Agreement, that both during and after the term of this Agreement it has
no rights within the licenses pertaining to software or other StarTek Pacific
proprietary materials or Products which would allow Mentor Media to be a seller
or distributor of any Products. Whenever requested by StarTek Pacific and from
time to time, it will sign separate mutually acceptable agreements to this
effect.
(e) SAFE STORAGE AND *. Mentor Media agrees not to store any other goods
near or in such relation to the Products or Product Components as to cause
injury to those Products or Product Components through contamination by strong
odors, leakage, or otherwise. *.
(f) NON-EXCLUSIVITY. This Agreement is not an exclusive agreement. At all
times StarTek Pacific shall have the right to appoint other parties to perform
Manufacturing and other services for StarTek Pacific or Customers. Provided that
Mentor Media would not be placed in breach of this Agreement, Mentor Media may
contract with and conduct manufacturing services for other software companies.
(g) FINANCIAL INFORMATION. Within * after Mentor Media learns that it has
become or will become Insolvent, Mentor Media shall submit financial statements
to StarTek Pacific in sufficient detail to allow StarTek Pacific to determine
whether Mentor Media shall be capable of continuing to perform its obligations
hereunder. The financial statements shall include, but shall not be limited to,
balance sheets and related statements of income and retained earnings and
statements of changes in financial condition. To the extent those statements are
audited, the audit report of the certified public accountant performing the
audit shall also be made available to StarTek Pacific.
(h) RETURN OF DELIVERABLES. Mentor Media will have possession of
Deliverables and replicable material for certain Products and other property for
purposes of the replication to be done under this Agreement. Upon termination of
this Agreement and at any early time whenever requested by StarTek Pacific to do
so, Mentor Media shall immediately deliver, at StarTek Pacific's cost, to
StarTek Pacific all of such Deliverables (provided that in no event shall such a
request by StarTek Pacific for Mentor Media's return of the Deliverables
prejudice Mentor Media's right to full performance by StarTek Pacific under this
Agreement), replicable materials and all and any other StarTek Pacific
proprietary materials ever received by it and it shall not retain any copy or
original of the same in any way whatsoever.
(i) QUALITY REQUIREMENTS. Mentor Media shall ensure that in performing its
obligations under this Agreement, it shall operate in accordance with the
quality guidelines as posted on Microsoft's Website, which can be found at * and
as set forth in the Statement of Work for all of the work that Mentor Media
performs for StarTek Pacific.
(j) PRODUCTION. Mentor Media covenants and agrees to meet StarTek Pacific's
demands for Product related to the Territory, as such demands may be adjusted
from time to time. Additional measurement procedures may be implemented as
mutually agreed upon by StarTek Pacific and Mentor Media.
(k) NON-CONFORMING PRODUCT. Mentor Media shall promptly replace and
deliver, within * from notification, at no charge to StarTek Pacific or its
Customers, any non-conforming Product if any delivery of Product, or any portion
of it, to any Customer fails to meet the quality standards specified in the
Statement of Work. In the event StarTek Pacific, Inc. determines that a Product
recall is necessary due to a breach of Mentor Media's warranties hereunder, or
due to a manufacturing defect, Mentor Media shall cooperate with StarTek Pacific
in all respects to conduct such recall at Mentor Media's expense; provided that
if Mentor Media has given prior notice of the possible defect and recommended
against delivery and the Product is nonetheless delivered at StarTek Pacific's
direction, or if the recall is necessary because of a StarTek Pacific error, the
recall on account of that defect shall be at StarTek Pacific's expense, but
Mentor Media shall still cooperate with it, and in such a case, StarTek Pacific
shall reimburse Mentor Media for the costs of Manufacturing the replacement
Products.
3
4
3. PRICE AND PAYMENT.
(a) GENERAL. StarTek Pacific and Mentor Media agree that Mentor Media shall
be compensated for the Manufacturing services pursuant to the Price and Payment
terms and conditions set forth in Exhibit B. StarTek Pacific shall be liable for
payment to Mentor Media for raw materials and Finished Product Units that have
been purchased and/or built in support of the * purchase order(s) issued by
StarTek Pacific. *. All payments due by StarTek Pacific to Mentor Media under
this Agreement shall be * from StarTek Pacific's receipt of an invoice from
Mentor Media. Any undisputed payment that is overdue for more than *, shall
thereafter bear interest at an annual rate of * per anum *.
(b) QUANTITY. The quantity of Product to be used in calculating StarTek
Pacific's obligation to pay Mentor Media with regard to any particular purchase
order shall be the lesser of (1) the number of Finished Product Units delivered
to a Customer in response to such purchase order, or (2) the quantity indicated
on the original purchase order.
(c) *.
(d) TAXES. In the event income taxes are required to be withheld by StarTek
Pacific on payments to Mentor Media required hereunder, StarTek Pacific agrees
to provide Mentor Media with reasonable notice in advance of the first such
withholding, and StarTek Pacific may deduct such income taxes from the amounts
owed and timely pay such taxes, when required, to the appropriate taxing
authority. StarTek Pacific shall in turn promptly secure and deliver to Mentor
Media an official receipt for any income taxes withheld. StarTek Pacific agrees
to pay all applicable goods and services or other applicable consumption taxes
(other than income taxes) levied on it by a duly constituted and authorized
taxing authority on the Manufacturing services. To the extent required by any
such taxing authority, Mentor Media may collect such taxes, if any, from StarTek
Pacific and, in such case, shall remit to StarTek Pacific official tax receipts
indicating that such taxes have been collected by Mentor Media and remitted to
the appropriate tax authorities, to the extent such receipts are available, and
Mentor Media shall show such taxes as separate line items on invoices to StarTek
Pacific. Mentor Media agrees to take such steps as are reasonably requested by
StarTek Pacific to minimize such taxes in accordance with all relevant laws and
to cooperate with and assist StarTek Pacific in challenging the validity of any
taxes applicable to the Manufacturing services and collected from StarTek
Pacific by Mentor Media or otherwise paid by StarTek Pacific. Except as required
by law or where expressly agreed to, in writing, by StarTek Pacific pursuant to
Exhibit B, StarTek Pacific shall not pay any taxes other than those described
above, including, without limitation (1) taxes on or with respect to or measured
by any net or gross income or receipts of Mentor Media, (2) any franchise taxes,
taxes on doing business, gross receipts taxes or capital stock taxes (including
any minimum taxes and taxes measured by any item of tax preference), (3) any
taxes imposed or assessed for work performed without the written authorization
by StarTek Pacific after the date upon which this Agreement is terminated, (4)
taxes based upon or imposed with reference to Mentor Media's real and personal
property ownership, (5) taxes incurred by Mentor Media on all goods and services
purchased from other related or unrelated parties, and/or (6) any taxes similar
to or in the nature of those taxes described in (1), (2), (3), (4) or (5) above.
Mentor Media agrees to make available to StarTek Pacific any and all records
necessary to comply with any and all tax obligations as provided herein,
including but not limited to reports necessary for goods and services tax
compliance and audit purposes. The contents and form of such reports shall be
mutually agreed to between the parties.
(e) CURRENCY FOR INVOICING AND PAYMENT. Mentor Media shall invoice StarTek
Pacific for the Prices in United States Dollars. All payments made by StarTek
Pacific to Mentor Media for Products delivered hereunder shall be in United
States Dollars. In computing the * payment due for Manufacturing services and in
rendering invoices, Mentor Media shall make automatic regular adjustments from
the * in accordance with the process outlined in the Statement of Work.
4. LICENSE GRANT.
4
5
(a) GENERAL. In order to allow Mentor Media to perform its Manufacturing as
required hereunder during the term of this Agreement, StarTek Pacific grants
Mentor Media a non-exclusive, non-transferable, personal, limited license right
to the Intellectual Property for each Product:
(1) to procure, reproduce and/or Manufacture the Product Components
based upon the applicable BOM(s) and purchase orders delivered by StarTek
Pacific pursuant to the Statement of Work;
(2) to assemble the Product Components into Finished Product Unit(s)
in accordance with the written instructions and BOM(s) delivered by StarTek
Pacific including the right to reproduce and manufacture any StarTek
Pacific software and documentation specified in the BOM(s) as necessary to
build the Finished Product Unit(s); and
(3) to deliver the Finished Product Unit(s) to Customers in accordance
with the Statement of Work.
(b) LICENSE RESTRICTIONS. Mentor Media shall not (i) in any way modify any
Products or Intellectual Property without obtaining, in advance, the express
written permission of StarTek Pacific; (ii) reproduce, manufacture, or
distribute any Product or Intellectual Property except pursuant to the terms of
this Agreement or pursuant to a separate legal contractual arrangement, which
contains a valid StarTek Pacific license or authorization to do same; or (iii)
reverse engineer, decompile, or disassemble any Products or Intellectual
Property. Notwithstanding the foregoing, Mentor Media may physically disassemble
those Product Components that do not consist of software or hardware solely for
the purpose improving Product assembly and/or quality. No other product or
informational piece, including without limitation flyers, literature,
documentation and advertising, may be bundled with any Products without the
prior written consent of StarTek Pacific. All rights not expressly granted
herein, without limitation, are reserved by, and shall exclusively inure to the
benefit of, StarTek Pacific.
5. SUBCONTRACTING.
(a) TO THIRD PARTIES. Mentor Media shall not subcontract any of its rights
or obligations under this Agreement, with respect to Manufacturing, except as
follows:
(1) Prior to any subcontractor performing any such services for Mentor
Media under this Agreement, Mentor Media and its subcontractor shall enter
into a written agreement ("Subcontractor Agreement") that expressly
provides that StarTek Pacific is a third party beneficiary of the
Subcontractor Agreement with rights to enforce such agreement should Mentor
Media fail to timely do so; that StarTek Pacific at its sole discretion,
reserves the right to evaluate the Subcontractor, either in person or in
written form; and further that requires Subcontractor to:
(a) comply with the applicable obligations identical to those imposed
on Mentor Media under Sections 2, 4(b), 6(a), 7(a)(1),
8,9,10(c),11,12,15(k), 15(l)and Exhibit A of this Agreement, and
(b) halt reproduction of Product(s) as required under this Agreement
or upon notice from Mentor Media or StarTek Pacific of the termination
or expiration of this Agreement, and
(c) pay StarTek Pacific's attorneys' fees if StarTek Pacific employs
attorneys to enforce any rights arising out of the Subcontractor
Agreement; and
(2) Mentor Media guarantees its subcontractor's fulfillment of the
applicable obligations imposed on Mentor Media by this Agreement; and
(3) Mentor Media shall indemnify, defend and hold StarTek Pacific
harmless for all damages and/or costs of any kind, including without
limitation, those incurred by StarTek Pacific and caused by a breach of the
Subcontractor Agreement by a subcontractor and/or subcontractor's failure
to fulfill of the applicable obligations imposed on Mentor Media by this
Agreement, including, but not limited to, Mentor
5
6
Media's payment of any monetary judgments awarded to StarTek Pacific by a
court of competent jurisdiction and any costs and fees relating thereto,
not paid by subcontractor, resulting from subcontractor's unauthorized
replication and/or distribution of Product(s) in accordance with the
Subcontractor Agreement; and
(4) Upon execution of this Agreement and thereafter prior to a
subcontractor performing any services under this Agreement, Mentor Media
shall provide StarTek Pacific with a written certification, signed by a
Mentor Media officer, representing and warranting that Mentor Media is in
compliance with the provisions of Section 5 of this Agreement; and
(5) StarTek Pacific in its reasonable discretion, will provide an
approved * supplier list as seen in Exhibit E which may be updated by
StarTek Pacific from time to time. If a supplier used by Mentor Media as a
subcontractor is removed from such list by StarTek Pacific, StarTek Pacific
acknowledges that Mentor Media may not be able to immediately discontinue
use of subcontractor. In such case, subject to other rights and obligations
of enforcement as set forth in the Agreement, StarTek Pacific and Mentor
Media will mutually agree to a transition plan.
StarTek Pacific will not execute a separate agreement with any of Mentor Media's
subcontractors, unless Mentor Media is in breach of this agreement.
(b) RIGHTS PASS THROUGH. It is the intention of this section that Mentor
Media be able to subcontract in *, provided Mentor Media fully maintains quality
standards and protects StarTek Pacific's property rights in StarTek Pacific's
Intellectual Property and Deliverables such that, in addition to StarTek
Pacific's recourse to Mentor Media under this Agreement, StarTek Pacific shall
also have rights enforceable directly against the subcontractor. The
responsibility and liability of Mentor Media under this Agreement is not
diminished on account of any subcontract and Mentor Media shall be fully
responsible for the subcontractor's performance and work.
(c) EXPORT RESTRICTIONS. Mentor Media hereby agrees that in subcontracting
portions of the Manufacturing to third parties pursuant to Section 5(a) or (b)
above, Mentor Media shall not, directly or indirectly, export or transmit (i)
any Product Component, Product and/or technical data or (ii) any Product (or any
part thereof), process, or service that is the direct product of a Product, to
(a) any countries that are subject to U.S. export restrictions (including as of
the Effective Date, but not limited to, Cuba, Iran, Iraq, Libya, North Korea,
Sudan and Syria); (b) any end-user whom Mentor Media knows or has reason to know
will utilize such Product Component, Product and/or technical data in the
design, development or production of nuclear, chemical or biological weapons; or
(c) any other country to which such export or transmission is restricted by the
export control laws and regulations of the United States, and any amendments
thereof, without prior written consent, if required, of the Bureau of Export
Administration of the U.S. Department of Commerce, or such other governmental
entity as may have jurisdiction over such export or transactions, unless StarTek
Pacific specifically directs Mentor Media in writing to do so.
(d) INDEMNIFICATION. If Mentor Media delivers Product(s) to a Customer
specified by StarTek Pacific or at StarTek Pacific's direction, StarTek Pacific
agrees to indemnify Mentor Media for any consequent indirect violation of the
export restrictions described in subsection 5(c) above.
(e) ENFORCEMENT. Mentor Media agrees that it will diligently and timely
enforce all rights against or obligations of any subcontractor(s) in order to
enforce compliance with the applicable terms of this Agreement and/or to
otherwise cure a subcontractor breach.
6. REPRESENTATIONS & WARRANTIES.
(a) BY MENTOR MEDIA. Mentor Media represents and warrants to StarTek
Pacific as follows:
(1) Mentor Media has full right and power to enter into and perform
according to the terms of this Agreement and doing so does not violate any
agreement between it and any third party;
6
7
(2) the Manufacturing, including any portion done by any subcontractor
as contemplated in Section 5, will strictly comply with all applicable
laws, as well as the terms and conditions of this Agreement, including
without limitation the Statement of Work;
(3) the Products (including the raw materials, reproduction quality,
Product Components and Finished Product Unit quality) will satisfy the
quality workmanship standards and service levels set forth in the * and
Statement of Work and Mentor Media shall further protect StarTek Pacific's
property rights in StarTek Pacific's Intellectual Property and Deliverables
from unauthorized use within the scope of this Agreement;
(4) Mentor Media shall at all times comply with its commitments and
obligations as stated in this Agreement;
(5) Mentor Media's performance of Manufacturing, pursuant to the
rights granted under this Agreement, does not infringe any third party's
patent, copyright, trade secret and/or any other intellectual property
right with respect to Mentor Media's replication, assembly, and/or
distribution processes;
(6) Mentor Media will, at all times relevant to this Agreement, keep
any and all license agreement with third parties relevant to Manufacturing
the Products in force and in good standing; and
(7) Mentor Media shall promptly replace, at no charge to StarTek
Pacific or the Customers, any non-conforming Products, and all
transportation, customs, and/or taxes relating thereto, if any delivery of
Products to StarTek Pacific or Customers, or any portion of it, breaches
the warranties of Section 6(a). In the event StarTek Pacific determines
that a Product recall is necessary, Mentor Media shall cooperate with
StarTek Pacific in all respects to conduct such recall at Mentor Media's
expense, provided that if the recall is necessary because of a StarTek
Pacific error, the recall on the account of that defect shall be at StarTek
Pacific's expense, but Mentor Media shall still cooperate with it, and in
such a case, StarTek Pacific shall reimburse Mentor Media for the costs of
producing and distributing the replacement Products.
(8) All equipment, products, systems and processes utilized by Mentor
Media in providing the Manufacturing services including without limitation
all hardware, software and networks will be fully and effectively "Year
2000 Compliant".
(9) YEAR 2000 COMPLIANCE.
(A) In this Section 6(a)(9), the expression "Year 2000
Compliant" (and like expressions) shall mean that no operational, financial,
data transmission, communication or process is affected or interrupted by dates
prior to, during or after the Year 2000, and in particular, but without
prejudice to the generality of the foregoing that:
(i) No value for current date will cause any
interruption in operation;
(ii) All manipulations of time related data will
produce the required results for all valid data values prior to, during and
after the Year 2000;
(iii) If the date elements in interfaces and data
storage specify the century, they will permit specifying the correct century
either explicitly or by unambiguous algorithms or inferencing rules; and where
any date element represented without a century, the correct century shall be
unambiguous for all manipulations involving that element;
(iv) Year 2000 must be recognized as a leap year.
(B) YEAR 2000 COMPLIANCE PLAN. Mentor Media shall at its
expense develop and submit to StarTek Pacific by _______________, a Year 2000
compliance plan (mail to:Y@K% Plan) which will include, inter alia, audits of
all relevant operational, financial, information, data transmission,
communication processes and systems of mentor Media which are utilized in
performing the Services, as well as the inter-operation
7
8
and inter-dependence of these systems with the systems of any of Mentor Media's
first-tier suppliers,(for purposes of this Section, Mentor Media Inc. shall be
deemed to be first-tier supplier of StarTek Inc) approved sub-contractors of
StarTek Authorized Replicators, which Y2K Plan shall identify non-Year 2000
Compliant elements; the corrective action plan which StarTek will implement to
ensure that such non-Year 2000 Compliant items are made Year 2000 Compliant, or,
where such items cannot be made Year 2000 Compliant, the alternative manual
processes to be implemented to ensure that the Services being provided by Mentor
Media are not interrupted or affected. Mentor Media shall at its own expense
contract the services of a reputable independent third-party auditor (the
"Independent Auditor") to validate that Mentor Media has prepared the Y2K Plan,
and that Mentor Media is executing the Y2K Plan in accordance with its terms so
as to ensure the uninterrupted performance by Mentor Media of the Services.
Mentor Media undertakes at its expense as follows:
(i) By September 1, 1998, Mentor Media shall provide
StarTek Pacific with that portion of its January, 1998, Independent Auditor's
report regarding Year 2000 Compliance. Further, Mentor Media shall provide
StarTek Pacific with its detailed internal status report regarding Year 2000
Compliance and submitted its Y2K Plan to StarTek Pacific for review.
(ii) By October 1, 1998, Mentor Media shall update and
submit to StarTek Pacific for review its updated internal status report
regarding Year 2000 Compliance.
(iii) By January 5, 1999, Mentor Media shall provide
StarTek Pacific with that portion of its January, 1999, Independent Auditor's
report regarding Year 2000 Compliance. Further, Mentor Media shall update and
submit to StarTek Pacific for review its updated internal status report
regarding Year 2000 Compliance.
(iv) By April 1, 1999, Mentor Media shall update and
submit to StarTek Pacific for review its updated internal status report
regarding Year 2000 Compliance. In the event Mentor Media fails to submit its
updated status report, Mentor Media shall submit to StarTek Pacific for review a
report from the Independent Auditor detailing Mentor Media's adherence to the
Y2K Plan. Mentor Media shall then commence system and manual process testing by
not later than April 1, 1999.
(v) By July 1, 1999, Mentor Media shall update and
submit to StarTek Pacific for review its updated internal status report
regarding Year 2000 Compliance. In the event Mentor Media fails to submit its
updated status report, Mentor Media shall submit to StarTek Pacific for review a
report from the Independent Auditor detailing Mentor Media's adherence to the
Y2K Plan and confirming that all systems and processes have been implemented and
fully tested and shown to be Year 2000 Compliant by not later than this date.
(vi) In each quarterly business review ("QBR") with
StarTek Pacific, Mentor Media shall notify StarTek Pacific of any issues
relating to its Year 2000 Compliance and provide an update on the status of its
Year 2000 Compliance. Additionally, the parties shall participate in a
conference call approximately once per month (or at such other times as the
parties may mutually agree) to address any Year 2000 Compliance issues.
(C) StarTek Pacific may at any time, on giving twenty-four
(24) hours' notice to Mentor Media, cause and audit to be undertaken of the Y2K
Plan by StarTek Pacific's nominated independent auditors to evaluate Mentor
Media's compliance with the Y2K Plan and the provisions of this Section. If at
any time a report from the Independent Auditor or from Startek Pacific's
auditors reveals, or it is otherwise revealed or apparent, that Mentor Media has
failed to execute and comply with the Y2K Plan or is otherwise in breach of the
terms of this Section, then Mentor Media shall be deemed to be in breach of this
Agreement, in which case, StarTek Pacific may forthwith immediately by notice in
writing terminate this Agreement. Any interruption in the provision of the
Services or in StarTek Pacific's business prior to, during or after the year
2000 which is due to a non-Year 2000 Compliance of any relevant operational,
financial, information, data transmission, communication process or system of
Mentor Media, which are utilized in performing the Services, or any
inter-operation or inter-dependence of these systems with the systems of any of
Mentor Media's first-tier suppliers, approved sub-contractors or StarTek Pacific
Authorized Replicators, shall constitute a breach by Mentor Media of its
obligations under this Agreement.
8
9
(b) BY STARTEK PACIFIC. StarTek Pacific, hereby represents and warrants to
Mentor Media as follows:
(1) StarTek Pacific has the full and exclusive right and power to
enter into and perform according to the terms of this Agreement;
(2) StarTek Pacific has and will have, at all relevant times,
sufficient rights in the Products to grant Mentor Media the rights granted
in this Agreement;
(3) that at all times relevant to this Agreement, StarTek Pacific will
keep any and all license agreements with third parties relevant to the
reproduction and manufacture of the Products in force and in good standing;
and
(4) that any and all software and Intellectual Property provided by
StarTek Pacific to Mentor Media for incorporation into the Products will be
exportable into the countries where StarTek Pacific requests it be
delivered.
(c) DISCLAIMER OF WARRANTY. THE WARRANTIES SET FORTH IN SECTIONS 6(a) AND
6(b) ABOVE ARE THE ONLY WARRANTIES MADE BY THE PARTIES AND ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, OR STATUTORY, INCLUDING BUT NOT LIMITED TO
IMPLIED WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO THE PRODUCTS.
7. INDEMNIFICATION.
(a) INDEMNITY. *
(b) SURVIVAL. Mentor Media and StarTek Pacific agree that the indemnities
set forth in this Section 7 shall survive and shall be enforceable beyond the
termination or completion of this Agreement.
(c) LIMITATION ON LIABILITY MENTOR MEDIA'S TOTAL LIABILITY AS TO MATTERS
ARISING UNDER THIS AGREEMENT SHALL BE LIMITED TO THE GREATER OF * OR THE TOTAL
AMOUNTS PAID UNDER SECTION 3 OF THIS AGREEMENT, WITH THE EXCEPTION THAT MENTOR
MEDIA'S LIABILITY SHALL BE UNLIMITED AS TO: (i) ANY INDEMNIFICATION OBLIGATION
FOR PERSONAL INJURY, DEATH OR PROPERTY DAMAGE TO THE EXTENT SUCH CLAIM IS BASED
UPON STRICT LIABILITY, NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACT OR OTHER
FAULT OF MENTOR MEDIA OR ITS SUBCONTRACTOR(S); (ii) ANY MATTER ARISING UNDER
SECTION 8 OF THIS AGREEMENT; (iii) FOR THE COST OF ANY RECALL INCLUDING THE COST
OF PRODUCING REPLACEMENT PRODUCT(S); (iv) ANY FAILURE TO RETURN ANY DELIVERABLES
AS IS OTHERWISE PROVIDED FOR IN THIS AGREEMENT; OR (v) ANY COPYRIGHT, PATENT,
TRADEMARK OR TRADE SECRET INFRINGEMENT(S) (ALL OF THE FOREGOING BEING
COLLECTIVELY REFERRED TO AS THE "MENTOR MEDIA EXCLUDED MATTERS"). STARTEK
PACIFIC, INC.'S TOTAL LIABILITY AS TO MATTERS ARISING UNDER THIS AGREEMENT SHALL
ALSO BE LIMITED TO THE GREATER OF * OR THE TOTAL AMOUNTS PAID UNDER SECTION 3 OF
THIS AGREEMENT, EXCEPT FOR ANY MATTERS ARISING UNDER SECTION 8 OF THIS
AGREEMENT. EXCEPT WITH REGARD TO MENTOR MEDIA EXCLUDED MATTERS (WHICH TERM FOR
THE PURPOSES OF THIS SENTENCE SHALL NOT INCLUDE ANY LIABILITY AS TO RECALL), NO
PARTY HERETO SHALL BE LIABLE TO ANOTHER FOR ANY INDIRECT, CONSEQUENTIAL,
PUNITIVE OR INCIDENTAL DAMAGES ARISING OUT OR RELATED TO THIS AGREEMENT. THE
PARTIES ACKNOWLEDGE THAT THE OTHER PROVISIONS OF THIS AGREEMENT RELY UPON THE
INCLUSION OF THIS SECTION 7(c).
8. CONFIDENTIALITY.
9
10
(a) GENERAL. Each party expressly undertakes to retain in confidence the
terms of this Agreement and the Agreement itself, along with all information and
know-how transmitted to or otherwise received by each party that the disclosing
party has identified as being proprietary and/or confidential or that, by the
nature of the circumstances surrounding the disclosure, ought in good faith to
be treated as proprietary and/or confidential (collectively, "Confidential
Information"), and will make no use of such Confidential Information except
under the terms and during the existence of this Agreement. Notwithstanding the
foregoing, any party may disclose the terms of this Agreement to its outside
legal and financial advisors with whom such party has a confidential
relationship and who are obligated to retain such information in confidence, in
the ordinary course of business. In addition, no party shall have an obligation
to maintain the confidentiality of information that (i) it received rightfully
from an unaffiliated third party prior to its receipt from the disclosing party;
(ii) the disclosing party has disclosed to an unaffiliated third party without
any obligation to maintain such information in confidence; or (iii) is
independently developed by the obligated party. Further, each party may disclose
Confidential Information as required by governmental or judicial order, provided
such party gives the disclosing party prompt written notice prior to such
disclosure, and complies with any protective order (or equivalent) imposed on
such disclosure, and provides the disclosing party the option of either seeking
a protective order or having its Confidential Information be subject to the same
protective orders as may apply to information of the party subject to the
governmental or judicial order. No party shall disclose, disseminate or
distribute any other party's Confidential Information to any third party without
the other's prior written permission. Each party's obligation under this Section
8 shall extend to the earlier of such time as the information protected hereby
is in the public domain through no fault of the obligated party or five (5)
years following termination or expiration of this Agreement. Each party shall
take all reasonable steps to ensure that their employees (and in the case of
Mentor Media, also its subcontractors) comply with this Section 8(a).
(b) FACILITY TOURS. StarTek Pacific acknowledges that customers and
potential customers of Mentor Media may tour the Facility. StarTek Pacific
agrees that any casual viewing during such a tour of Products that StarTek
Pacific has already commercially released does not violate Section 8(a) above.
*. In the event that StarTek Pacific reasonably believes that additional
security measures are necessary, StarTek Pacific will notify Mentor Media, and
the parties will implement additional mutually agreeable security procedures for
so long as necessary.
9. RISK OF LOSS.
(a) GENERAL. Risk of loss for all Finished Product Units, which are the
subject of this Agreement, together with all Product Components (including the
associated raw materials), shall remain with Mentor Media except as otherwise
provided in this Section 9. Mentor Media shall take all reasonable precautions
to protect StarTek Pacific property against loss, damage, theft or disappearance
while in its care, custody or control.
(b) TRANSIT RISKS. Risk of loss for Product(s) or Product Components in
transit shall remain at all times with Mentor Media unless and until acceptance
of Finished Product Units is made by a StarTek Pacific or Customer directed
carrier.
(c) ON PREMISES RISK. Mentor Media shall be responsible for all risk of
loss or damage to all StarTek Pacific property while located at Mentor Media's
or its subcontractor's facilities. Mentor Media shall be responsible for the
full amount of the loss or damage and shall reimburse StarTek Pacific for such
loss or damage. Reimburseable amount for any loss or damage shall be as set
forth in Section (d) below.
(d) REIMBURSABLE AMOUNT. Mentor Media shall reimburse StarTek Pacific for
any loss or damage to Finished Product Units as follows:
(1) Mentor Media shall reimburse StarTek Pacific for the * as
established by StarTek Pacific for any loss or damage to Finished Product
Units, except loss or damage resulting from theft, Mentor Media's negligence
or willful acts, or any Unaccounted Product(s);
(2) Mentor Media shall reimburse StarTek Pacific for * as established
by StarTek Pacific, for any loss to Finished Product Units resulting from
theft, the negligence or willful acts of Mentor Media, or any Unaccounted
Product(s).
10
11
(e) UNACCOUNTED PRODUCT(S). Mentor Media shall be liable for and shall
reimburse StarTek Pacific for any Unaccounted Product(s) that is as reported in
the * build reports provided to StarTek Pacific or as determined upon physical
inventory/audit conducted pursuant to Section 11 of this Agreement. "Unaccounted
Product(s)" shall be defined as the number of *. Mentor Media shall also be
liable for Unaccounted Products of its subcontractor(s).
(f) SALVAGE. At all times, and regardless of whether Mentor Media or its
insurers are required to compensate StarTek Pacific for property losses as
provided for in this section, StarTek Pacific shall retain sole rights to
salvage for damaged Products. Mentor Media shall not surrender damaged goods to
carriers, insurers, other parties or for destruction or disposal without first
obtaining the written consent of StarTek Pacific.
(g) *.
10. TERM AND TERMINATION.
(a) DURATION. The term of this Agreement shall commence on the Effective
Date and terminate on June 30, 2001 (the "Term").
(b) EARLY TERMINATION AND DEFAULT. StarTek Pacific may terminate this
Agreement immediately upon notice if Mentor Media: (i) fails to strictly comply
with Section(s) 4 or 8 of this Agreement, (ii) makes or attempts to make an
assignment in violation of Section 15(a) of this Agreement, or (iii) experiences
an Insolvency Event of Default, as defined below. In addition to the foregoing,
StarTek Pacific or Mentor Media may terminate this Agreement without cause with
* notice in writing. The rights and remedies provided herein to the parties
shall not be exclusive and are in addition to any other rights and remedies
provided by law. In the event a non-defaulting party in its discretion elects
not to terminate this Agreement, such election shall not be a waiver of any
claims of that party for a default(s). Further, the non-defaulting party may
elect to leave this Agreement in full force and effect and to institute legal
action against the defaulting party for specific performance and/or damages
suffered by such party as a result of the default(s). For purposes of this
Agreement, an "Insolvency Event of Default" shall be deemed to have occurred in
the event the applicable party fails to formally dismiss the Insolvency Event of
Default within * after commencement of any of the following proceedings: (x) any
party admits in writing its inability to pay its debts generally or makes a
general assignment for the benefit of creditors; (y) any affirmative act of
insolvency by any party or the filing by or against any party of any petition or
action under any bankruptcy, reorganization, insolvency arrangement,
liquidation, dissolution or moratorium law, or any other law or laws for the
relief of, or relating to, debtors; or (z) the subjection of a material part of
any party's property to any levy, seizure, assignment or sale for or by any
creditor, third party or governmental agency.
Notwithstanding the foregoing, StarTek Pacific may, at its sole discretion,
immediately terminate this Agreement if, due to Mentor Media's lack of
diligence, Mentor Media engages in or permits its subcontractor(s) to engage in
the unauthorized replication and/or distribution of Product(s). Mentor Media
will diligently attempt to prevent any unauthorized replication and/or
distribution of Product(s) by Mentor Media employees or any subcontractor and
will cooperate fully with StarTek Pacific to that end. StarTek Pacific may, at
its sole discretion, immediately terminate Mentor Media's right to subcontract
the replication and/or assembly of Product(s), in accordance with Section 5 of
this Agreement, if StarTek Pacific determines that Mentor Media's subcontractor
is or has been involved in the unauthorized replication and/or distribution of
Product(s) or any third party products.
(c) OBLIGATIONS UPON TERMINATION/EXPIRATION OF THIS AGREEMENT. Within *, or
earlier as noted, after termination or expiration of this Agreement, Mentor
Media shall do all of the following:
(1) deliver to StarTek Pacific any Finished Product Units built
against a StarTek Pacific purchase order, but not yet delivered, at the
Prices set forth in Exhibit B. Mentor Media shall destroy all other
Finished Product Units and shall, upon request of StarTek Pacific issue a
letter certifying that such destruction has taken place.
11
12
(2) Mentor Media shall, at StarTek Pacific's election, either deliver
to StarTek Pacific or destroy any other unused Inventory (excluding
Finished Product Units), as designated by StarTek Pacific. StarTek
Pacific's payment obligation for such unused Inventory shall be in
accordance with Exhibit B.
(3) Subject to payment as set forth in Exhibit B, Mentor Media shall,
at StarTek Pacific's request, provide StarTek Pacific the opportunity to
purchase any other Product Components owned by Mentor Media (excluding
unused Inventory).
(4) Mentor Media immediately shall deliver to StarTek Pacific any
StarTek Pacific. Deliverables and any Confidential Information not covered
by the foregoing. Mentor Media shall not retain any copy or original of any
StarTek Pacific. Deliverable or Confidential Information in any way or form
whatsoever.
Mentor Media shall work with StarTek Pacific to terminate the Manufacturing in
an orderly manner in the event of the termination of this Agreement. Use of
Intellectual Property in any manner by Mentor Media after expiration or
termination of this Agreement for any reason, whether or not incorporated in
Inventory, shall be deemed to be in violation of StarTek Pacific's Intellectual
Property rights and shall entitle StarTek Pacific to have all remedies provided
by law or equity (including injunctive relief); provided, however, this does not
preclude Mentor Media from continuing to use Products properly acquired outside
of this Agreement in accordance with the applicable license.
(d) EFFECT OF DEFAULT. If there is a Default, the parties shall have all
rights and remedies provided in this Agreement or otherwise available under law
as limited by this Agreement.
(e) SURVIVAL. Sections 2(d), 6, 7, 8, 10 and 11 shall survive termination
or expiration of this Agreement.
11. RECORD KEEPING AND AUDIT REQUIREMENTS.
(a) RECORD KEEPING REQUIREMENTS. During the term of this Agreement, Mentor
Media agrees to keep all usual and proper production and delivery records and
books of account and all usual and proper entries relating to Mentor Media's
(and any subcontractor's) performance of this Agreement for a minimum period of
* from the date they are created. Such records, books of account, and entries
shall be kept in accordance with generally accepted accounting principles.
(b) DOCUMENTATION. During the term of this Agreement, Mentor Media agrees
to provide StarTek Pacific with any and all information, as mutually agreed upon
between the parties, that StarTek Pacific determines necessary for tax
compliance and statutory reporting purposes. The information required will
include, but may not be limited to, the data shown on Exhibit D. Unless StarTek
Pacific indicates otherwise, Mentor Media shall provide such information in an
electronic format, at an agreed upon quarterly deadline. StarTek Pacific shall
specify the data requirements and make every reasonable effort to assist Mentor
Media in designing the report format. All information should be based on the
StarTek Pacific fiscal year-to-date basis (beginning on July 1). Such report
shall also cover Mentor Media's subcontractor(s). StarTek Pacific reserves the
right to modify the form of such reports by providing Mentor Media with written
notice of any such modifications.
(c) AUDIT. Notwithstanding the foregoing provisions, upon * written notice
if StarTek Pacific reasonably believes a breach is occurring under this
Agreement (with such notice specifying the alleged breach) and otherwise upon
reasonable notice as agreed upon between the parties (but in no event shall such
reasonable notice exceed * and Mentor Media shall not unreasonably delay or
withhold its agreement), StarTek Pacific may cause an audit to be made of Mentor
Media's (and any applicable subcontractor's) books and records, and/or an
inspection of replication, assembly, and distribution locations, including the
Facility, in order to verify Mentor Media's compliance with the terms of this
Agreement and to verify financial reports issued by Mentor Media. This right of
audit extends beyond the termination of this Agreement for a period of *. Any
such audit shall be made by an independent certified public accountant selected
by StarTek Pacific (other than on a contingent fee basis) and/or a StarTek
Pacific internal audit team. Any audit and/or inspection shall be conducted
during regular business hours at Mentor Media's (or any applicable
subcontractor's) offices. Mentor Media agrees to provide StarTek Pacific's
12
13
designated audit or inspection team access to relevant Mentor Media records and
all replication and/or assembly locations. Any such audit shall be paid for by
StarTek Pacific unless material discrepancies are disclosed. *. If material
discrepancies are disclosed, Mentor Media agrees to pay StarTek Pacific for the
costs associated with the audit. No unauthorized duplication or replication of
Product will be permitted. Mentor Media shall be liable for any Unaccounted
Product discrepancies in an amount equal to *. "Unaccounted Product(s)" shall be
defined as the number of Finished Product(s) Units that the audit and/or
inspection determines have been replicated and assembled by Mentor Media and/or
one of Mentor Media's subcontractors, but (i) have not been properly delivered
in accordance with the terms of this Agreement, (ii) are not in Mentor Media's
inventory, and/or (iii) have not been properly destroyed. Mentor Media shall
also be liable for Unaccounted Products of its subcontractor(s). Mentor Media's
obligation to pay StarTek Pacific for Unaccounted Product(s) shall not be
StarTek Pacific's exclusive remedy and is in addition to any other rights and
remedies StarTek Pacific may have as provided by law or this Agreement.
(d) FACILITY INSPECTIONS. StarTek Pacific may cause an inspection to be
made, with at least * prior notice, of the Facility to verify that Mentor Media
and/or any subcontractor is providing Manufacturing in compliance with the
terms of this Agreement. Any inspection conducted pursuant to this Section 10(d)
shall be conducted during regular business hours at the Facility. Mentor Media
agrees to provide StarTek Pacific's designated inspection team access to
relevant records and the Facility. Mentor Media may designate a representative
to accompany the inspector or inspectors, and it may reasonably restrict access
from specific areas containing confidential information of Mentor Media or its
other customers. If material discrepancies from the provisions of this Agreement
are disclosed, Mentor Media agrees to implement agreed-upon corrective action.
Nothing herein shall preclude StarTek Pacific from exercising any other rights
or remedies it has under law or other provisions of this Agreement.
(e) CONFIDENTIALITY. Notwithstanding the foregoing, Mentor Media may edit
its books and records to protect confidential information of Mentor Media that
is unrelated to the subject of a StarTek Pacific record review, or to protect
confidential information of Mentor Media's customers.
(f) PROFIT & LOSS STATEMENTS. Mentor Media agrees to provide StarTek
Pacific with * (as determined by StarTek Pacific) profit and loss statements and
other financial statements for a particular Facility at StarTek Pacific's
request, in each instance within * after such request.
Without any limitations and on as many occasions as StarTek Pacific chooses
to do so, Mentor Media shall permit the audit by StarTek Pacific or its
designated agents or accountants, of all of the records in support of the *
financial reports given or required to be given during the term of this
Agreement subject to subsection (e) above. This right of audit extends beyond
the termination of this Agreement for a period of *.
12. EXPORT RESTRICTIONS.
Mentor Media shall not, directly or indirectly, export or transmit (i) any
Product Component, Product and/or technical data or (ii) any Product (or any
part thereof), process, or service that is the direct product of a Product, to
(a) any countries that are subject to U.S. export restrictions (including, but
not limited to, Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria); (b) any
End-User whom Mentor Media knows or has reason to know will utilize them in the
design, development or production of nuclear, chemical or biological weapons; or
(c) any other country to which such export of transmission is restricted by the
export control laws and regulations of the United States, and any amendments
thereof, without prior written consent, if required, of the Bureau of Export
Administration of the U.S. Department of Commerce, or such other governmental
entity as may have jurisdiction over such export or transactions, unless StarTek
Pacific specifically directs Mentor Media in writing to do so.
Mentor Media shall indemnify, defend and hold StarTek Pacific harmless from any
Claims arising from or related to any failure by Mentor Media to comply with
this Section 12. In addition, if Mentor Media delivers Product(s) to a Customer
specified by StarTek Pacific or at StarTek Pacific's direction, StarTek Pacific
agrees to indemnify Mentor Media for any consequent indirect violation of the
export restrictions described in subsection 12 above.
13
14
13. NOTICES AND PRINCIPAL CONTACTS.
All notices, authorizations, and requests in connection with this Agreement
shall be deemed given on the day they are sent by air express courier, charges
prepaid; and addressed as follows:
MENTOR MEDIA: Mentor Media Pacific Inc.
Attn: *
*
*
Telephone: *
Fax: *
With a copy to:
Mentor Media General Counsel
Telephone:
Fax:
STARTEK PACIFIC, StarTek Pacific, Ltd.
INC.: 000 Xxxxxx
Xxxxxx, XX 00000
Attn: *
Telephone: *
Fax: *
With a copy to: Law & Corporate Affairs
Telephone:
Fax:
or such other person or address as each party, respectively, so designates by
written notice to the other parties.
14. ENTIRE AGREEMENT AND MODIFICATIONS.
(a) ENTIRE AGREEMENT. This Agreement, including all exhibits hereto,
constitutes the entire agreement between Mentor Media and StarTek Pacific with
regard to the subject matter hereof and merge all prior and contemporaneous
communications. The Statement of Work, as may be modified pursuant to Section
14(b) below, is a part of this Agreement for all purposes.
(b) STATEMENT OF WORK. The Statement of Work may be modified as follows:
each modification must be approved by StarTek Pacific and Mentor Media, and such
approval must be documented with a confirming e-mail or other written
communication between authorized representatives of the two parties. In
addition, if StarTek Pacific deems it necessary and appropriate, it shall
prepare on a * basis an updated version of the Statement of Work incorporating
all modifications made since the prior update and clearly setting forth the
"Date of Revision" on the front page. StarTek Pacific shall circulate each such
update to Mentor Media. The most current revised version of the Statement of
Work that has been circulated in this manner to the parties, together with
subsequent modifications
14
15
documented pursuant to this Section 15(b) shall constitute the Statement of Work
for the purposes of this Agreement. Mentor Media shall maintain and make
available to StarTek Pacific upon request copies of all of its documentation
regarding modifications to the Statement of Work. For purposes of this
Agreement, references to Statement of Work includes any agreed modification even
if prior to the quarterly incorporation of such changes.
(c) AMENDMENT. This Agreement may be amended only in writing signed by
authorized representatives of both parties. Notwithstanding the foregoing,
StarTek Pacific reserves the right to change, by * prior notice to Mentor Media,
any policies of StarTek Pacific.
(d) OTHER. Except as provided in this Section 14, the provisions of this
Agreement may be modified only by written instrument signed by duly authorized
representatives of StarTek Pacific and Mentor Media.
15. GENERAL.
(a) PROHIBITION AGAINST ASSIGNMENT. Except as expressly provided in this
Section 15(a), no party may assign its rights or obligations under this
Agreement (by actual assignment or by operation of law, including without
limitation through a merger, consolidation, exchange of shares, or sale or other
disposition of assets, including disposition on dissolution), without the prior
written consent of the other party, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, this is a contract for personal
services and StarTek Pacific, Inc. relies upon the qualifications, reputation
and expertise of Mentor Media to perform all obligations hereunder. In
particular, StarTek Pacific relies upon Mentor Media's history of performance
over more than * of operation,
(b) CONTROLLING LAW. This Agreement shall be construed and controlled by
the laws of the State of Washington, and Mentor Media consents to jurisdiction
and venue in the state and federal courts sitting in the State of Washington.
Process may be served on any party in the manner set forth in Section 13 for the
delivery of notices or by such other method as is authorized by Washington law
or court rule.
(c) NO PARTNERSHIP/JOINT VENTURE/AGENCY/FRANCHISE. This Agreement shall not
be construed as creating a partnership, joint venture, employer-employee or
agency relationship or as granting a franchise.
(d) SEVERABILITY. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be illegal, invalid or unenforceable, the
remaining provisions shall remain in full force and effect.
(e) ATTORNEYS' FEES. If any party employs attorneys to enforce any rights
arising out of or relating to Agreement, the prevailing party shall be entitled
to recover its reasonable attorneys' fees, costs and other expenses.
(f) WAIVER. No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof, and no waiver shall be effective unless
made in writing and signed by an authorized representative of the waiving party.
(g) SECTION HEADINGS. The Section headings used in this Agreement are
intended for convenience only and shall not be deemed to supersede or modify any
provisions.
(h) GOVERNMENTAL APPROVALS. Each party shall, at its own expense, obtain
and arrange for the maintenance in full force and effect of any and all
governmental approvals, consents, licenses, authorizations, declarations,
filings, and registrations as may be necessary or advisable for the performance
of all of the terms and conditions of this Agreement.
(i) FORCE MAJEURE.
(1) Except as otherwise provided in this Section 15(i), neither party
shall be in default by reason of any failure in performance of this
Agreement, if such failure arises out of causes beyond the control and
without the fault or negligence of the involving party including, but not
restricted to, acts of God, acts of the Government, fires, floods,
epidemics, quarantine restrictions, strikes, lock-outs, freight embargoes
and unusually severe weather. This Section shall also apply to Mentor
Media's contractors
15
16
where a contractor's failure arises out of the same causes, except insofar
as Mentor Media could have reasonably been expected to obtain contractor
supply from alternate sources.
(2) Mentor Media shall give a written notice to StarTek Pacific within
* after Mentor Media becomes aware of any circumstances or event which may
reasonably be anticipated to cause or constitute, or which constitute a
force majeure as described in Section 15(i)(1), above. Such notice shall
contain a detailed description of the delay and of the affected portion of
the Agreement. Within a further * after such notice, Mentor Media shall
deliver a detailed written description of the work-around plan, alternative
sources, and any other reasonable means that Mentor Media shall, at its own
cost, use to prevent such further delay.
(3) If the delivery of any Products shall be delayed by reason of
force majeure for more than * beyond when delivery was scheduled, StarTek
Pacific may upon written notice to Mentor Media with respect to the
undelivered Products, either terminate any or all this Agreement hereunder.
In the event of such termination, the parties shall comply with their
obligations as specified in Section 10.
(j) EXHIBIT(S). The following exhibits, as amended from time to time, are
incorporated into this Agreement by this reference ("Exhibit(s)"):
EXHIBIT DESCRIPTION
A Statement of Work
B Price and Payment Terms
C Insurance
D Required Tax Information
E Approved Subcontractor List
All references to the "Agreement" are references to this Agreement and all
Exhibits, all as amended from time to time. To the extent that any
provision contained in any Exhibit is inconsistent or conflicts with this
Agreement exclusive of the Exhibits, the provisions of this Agreement
(exclusive of the Exhibits) shall control.
(k) PRESS RELEASES/PUBLICITY. Mentor Media shall not issue any new press
releases or publicity that may relate or refer to this Agreement. Any press
statements shall only be released by joint agreement of the parties, except as
legally required by the SEC or NYSE. Mentor Media shall not use the name
"StarTek Pacific, Ltd." or "StarTek Pacific, Inc. " in any advertisements.
Mentor Media may, however, with the prior written consent of StarTek Pacific use
the name "StarTek Pacific" in brochures, written response to requests for client
lists as part of Requests for Proposals, Requests for Information, etc. Mentor
Media may also use the name "StarTek Pacific Ltd." or "StarTek Pacific, Inc. "
in verbal client presentations.
(l) INSURANCE. Prior to the commencement of the Manufacturing services to
be performed hereunder and throughout the entire period of performance by Mentor
Media, Mentor Media shall procure and maintain the insurance coverage set forth
in Exhibit C. Such insurance shall be in a form and with insurers acceptable to
StarTek Pacific and shall comply with the minimum requirements set forth in
Exhibit C.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above. All signed copies of this Agreement shall be deemed originals.
16
17
STARTEK PACIFIC, Ltd. Mentor Media International, Inc.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxx Xxx Foo
------------------------------------- --------------------------------
By By
Xxxxxxx X. Xxxxxx Xxxx Xxx Foo
------------------------------------- --------------------------------
Name (Print) Name (Print)
President and Chief Executive Officer Managing Director
------------------------------------- --------------------------------
Title Title
September 24, 1998 September 24, 1998
------------------------------------- --------------------------------
Date Date
17
18
State of CO )
) ss:
County of Weld )
I certify that I know or have satisfactory evidence that Xxxxxxx Xxxxxx is
the person who appeared before me, and said person acknowledged that (he/she)
signed this instrument, on oath stated that (he/she) was authorized to execute
the instrument and acknowledged it as the CEO of STARTEK PACIFIC, Ltd. to be the
free and voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: September 24, 1998
-------------------
/s/ Xxxx Xxxxxxx
-----------------------------------
Notary Public
[Seal or Stamp] Xxxx Xxxxxxx
-----------------------------------
[Printed Name]
My appointment expires May 17, 2001
------------
18
19
__________________ )
) ss:
County of ________ )
I certify that I know or have satisfactory evidence that
____________________________ is the person who appeared before me, and said
person acknowledged that (he/she) signed this instrument, on oath stated that
(he/she) was authorized to execute the instrument and acknowledged it as the
______________________ of Mentor Media, Inc. to be the free and voluntary act of
such party for the uses and purposes mentioned in the instrument.
Dated:
--------------
-------------------------------------
Notary Public
[Seal or Stamp]
-------------------------------------
[Printed Name]
My appointment expires
--------------
19
20
EXHIBIT A
STATEMENT OF WORK
Ex. N-1
21
EXHIBIT B
PRICE AND PAYMENT TERMS
Ex. N-2
22
EXHIBIT C
INSURANCE
This Exhibit "C" is a continuation of that certain Manufacturing Agreement dated
_______________ between STARTEK PACIFIC, Ltd ("StarTek Pacific") and Mentor
Media, Inc. ("Mentor Media"). Capitalized terms not otherwise defined in this
Exhibit shall have the same meaning as set forth in the Agreement to which this
document is an Exhibit.
1. INSURANCE
Prior to the commencement of the work to be performed hereunder and throughout
the entire period of performance by Mentor Media. Mentor Media shall procure and
maintain insurance coverage as will reasonably respond to claims and liabilities
that Mentor Media may encounter in the course of its business. Such insurance
shall be in a form and with insurers acceptable to StarTek Pacific and shall
comply with the following minimum requirements:
1.1 INSURANCE FOR LOSS OR DAMAGE TO PROPERTY. Mentor Media shall maintain
policies of insurance covering loss or damage to Products and any StarTek
Pacific property in its possession or control, including but not limited to loss
or damage that results from the fraudulent, dishonest, or criminal acts of
Mentor Media, its subcontractors, or employees of Mentor Media and its
subcontractors. Such policies shall be written with insurers and on policy forms
reasonably acceptable to StarTek Pacific and shall provide limits adequate to
cover the full value of Product(s) at risk, and proceeds of such policies shall
be payable in Singapore currency (SGD) or United States currency (USD). Mentor
Media shall cause its insurers to endorse the policies as follows:
a) StarTek Pacific shall be named as loss payee to the extent of StarTek
Pacific's interest in Product(s),
b) coverage provided by the policy shall be primary to and not contributory
with coverage maintained by StarTek Pacific
c) rights of subrogation against StarTek Pacific are to be waived, and
d) such policy may not be canceled or materially altered to the detriment
of StarTek Pacific without
* advance notice to StarTek Pacific.
Coverage under this policy shall provide the broadest protection available at
reasonable cost.
Upon request Mentor Media shall provide StarTek Pacific with a current
certificate of insurance and certified copies of policy endorsements evidencing
compliance with the requirements set forth in this section.
1.2 COMPREHENSIVE GENERAL LIABILITY. Mentor Media shall obtain and maintain
a policy of "general", "public", or "commercial" liability insurance written on
an "occurrence form" with limits of not less than * each occurrence for bodily
injury and property damage. The policy shall provide coverage for worldwide
defense, premises and operations, contractual liability (including specifically
the insurable contractual liability assumed in this Agreement), and products and
completed operations.
Mentor Media shall also obtain and maintain a policy of "general",
"public", or "commercial" liability insurance written on an "occurrence form"
with limits of not less than * each occurrence for bodily injury and property
damage. Such policy shall provide coverage for defense, premises and operations,
contractual liability (including specifically the insurable contractual
liability assumed in this Agreement), and products and completed operations.
1.3 WORKERS' COMPENSATION. Mentor Media shall at all times comply to the
full extent with the Worker's Compensation Act of 1985, reenactments thereof,
and any regulations made thereunder.
1.4 EMPLOYERS LIABILITY. Mentor Media, in addition to complying with the
provisions of section 1.3 above, shall maintain coverage for employers liability
with a policy limit of not less than *.
Ex. N-3
23
1.5 CERTIFICATES OF INSURANCE. Upon request by StarTek Pacific, Mentor
Media shall provide to StarTek Pacific certificates of insurance evidencing full
compliance with the insurance requirements contained herein. Such certificates
shall be kept current throughout the entire period of performance, and shall
provide for at least * advance notice to StarTek Pacific, Inc. if the coverage
is to be canceled or materially altered so as not to comply with the foregoing
requirements.
FAILURE BY MENTOR MEDIA, TO FURNISH CERTIFICATES OF INSURANCE OR FAILURE BY
STARTEK PACIFIC TO REQUEST SAME SHALL NOT CONSTITUTE A WAIVER BY STARTEK PACIFIC
OF THE INSURANCE REQUIREMENTS SET FORTH HEREIN. IN THE EVENT OF SUCH FAILURE ON
THE PART OF MENTOR MEDIA OR ITS SUBCONTRACTORS TO PROVIDE THE CERTIFICATES AS
REQUIRED HEREIN, STARTEK PACIFIC EXPRESSLY RESERVES THE RIGHT TO ENFORCE THESE
REQUIREMENTS, AND IN THE EVENT OF LIABILITY OR EXPENSE INCURRED BY STARTEK
PACIFIC AS A RESULT OF SUCH FAILURE BY MENTOR MEDIA OR ANY SUBCONTRACTOR, MENTOR
MEDIA HEREBY AGREES TO INDEMNIFY STARTEK PACIFIC FOR ALL LIABILITY AND EXPENSE
(INCLUDING REASONABLE ATTORNEY'S FEES AND EXPENSES ASSOCIATED WITH ESTABLISHING
THE RIGHT TO INDEMNITY), INCURRED BY STARTEK PACIFIC AS A RESULT OF SUCH FAILURE
BY MENTOR MEDIA OR ITS SUBCONTRACTORS.
Ex. N-4
24
EXHIBIT D
REQUIRED TAX INFORMATION
During the term of this Agreement, Mentor Media agrees to provide StarTek
Pacific with such information, as mutually agreed upon between the parties, that
StarTek Pacific determines necessary for tax compliance and statutory reporting
purposes. Such information shall include, but may not be limited to the
following:
A listing of all transactions, showing for each invoice:
- Invoice Number
- Date of Invoice
- Purchase Order Number(s)
- Total Charges Before GST
- GST
- Total Amount Due
The data provided in electronic format should agree with the information shown
on actual invoices issued to StarTek Pacific.
If there are any transactions that are exempt from GST or are zero-rated for GST
purposes, such transactions should be reported separately (but the information
required will still be listed as set forth above, except that the GST amount
will be zero).
Ex. N-5
