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Exhibit 10.13  

 
 

SECURITY AGREEMENT AND PLEDGE OF STOCK
  (Scioto Downs, Inc.)    

        THIS
SECURITY AGREEMENT AND PLEDGE OF STOCK ("Agreement") is made and entered into this    day
of                        , 2003, by and between MTR GAMING GROUP, INC., a
Delaware corporation, hereinafter referred to as "Debtor", and WELLS FARGO BANK, National Association, as Agent Bank on behalf of itself and each of the Banks described hereinbelow, hereinafter
referred to as "Secured Party". 

R  E  C  I  T  A  L  S:

        A.
Reference is made to that certain Third Amended and Restated Credit Agreement, dated March 28, 2003 as amended by First Amendment to Third Amended and Restated Credit Agreement
dated as of June 18, 2003 (as may be further amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), executed by and among MTR GAMING GROUP, INC., a
Delaware corporation, MOUNTAINEER PARK, INC., a West Virginia corporation, SPEAKEASY GAMING OF LAS VEGAS, INC., a Nevada corporation, SPEAKEASY GAMING OF RENO, INC., a Nevada
corporation, SCIOTO DOWNS, INC., an Ohio corporation through its predecessor by merger, RACING ACQUISITION, INC., an Ohio corporation, and PRESQUE ISLE DOWNS, INC., a Pennsylvania
corporation (collectively the "Borrowers"), the Lenders therein named (each, together with their respective successors and assigns, individually being referred to as a "Lender" and collectively as the
"Lenders"), and Wells Fargo Bank, National Association, as administrative and collateral agent for the Lenders (herein, in such capacity, the "Agent Bank" and, together with the Lenders, collectively
referred to as the "Banks"). 

        B.
In this Agreement, all capitalized words and terms not otherwise defined herein shall have the respective meanings and be construed herein as provided in Section 1.01 of the
Credit Agreement and any reference to a provision of the Credit Agreement shall be deemed to incorporate that provision as a part hereof in the same manner and with the same effect as if the same were
fully set forth herein. 

        C.
Debtor is the owner of all of the outstanding stock (collectively the "Pledged Stock") of the following Subsidiary (the "Pledged Subsidiary"): 

	(i)
	Scioto
Downs, Inc., an Ohio corporation ("SDI") represented by Stock Certificate No. N17218, dated July 31, 2003, for one (1) share of the common
voting stock of SDI, registered in the name of MTR Gaming Group, Inc. 

        D.
This Agreement is governed by the laws of Nevada but is subject to the provisions of Ohio Law that govern the conduct of thoroughbred horse racing in Ohio (the "Ohio Racing Act") and
in the event enabling legislation is enacted permitting the operation of gaming devices in Ohio (the "Gaming Devices Act" and, together with the Ohio Racing Act, the "Gaming Laws"). 

AGREEMENTS:

        In
consideration of the terms and conditions set forth herein and the making of the Bank Facilities by Banks, the parties agree as follows: 

        1.     As
security for the performance by Borrowers of each and every term and provision contained in the Credit Agreement and the due and punctual payment of the Revolving
Credit Note and all other amounts owing under any of the Loan Documents (collectively the "Secured Obligations"), Debtor hereby pledges, assigns, and transfers as security the Pledged Stock to Secured
Party, and grants to Secured Party a security interest in the Pledged Stock, together with all rights, products, proceeds, dividends, redemption payments, liquidation payments, instruments and any
other securities derived therefrom, substituted therefor or otherwise subject to the lien hereof pursuant to the provisions hereof, all of which shall be treated as part of the Pledged Stock and
collateral hereunder. 

 

        2.     Debtor
represents and warrants as of the date hereof that: (a) the Pledged Stock represents all of the issued and outstanding shares of the common voting stock of
the Pledged Subsidiary, (b) the Pledged Subsidiary has not authorized or issued any class of stock other than common voting stock, (c) it is the legal, record and beneficial owner of,
has good and marketable title to and has the right to pledge and create a security interest in the Pledged Stock, (d) the Pledged Stock is validly issued, fully paid and
non-assessable and is not subject to any lien, pledge, charge, encumbrance or security interest (other than the security interest hereby created in favor of Secured Party) or right or
option on the part of any third Person to purchase or otherwise acquire the Pledged Stock or any part thereof nor is the Pledged Stock subject to any restriction relating to the voting or other rights
attaching thereto, (e) this Agreement and the delivery of the Pledged Stock to Secured Party creates a valid and enforceable perfected lien on all of the Pledged Stock in favor of the Secured
Party for the benefit of the Banks, and (f) except for the required consents specified herein, no consent, filing, recording or registration is required to perfect the lien purported to be
created by this Agreement. Debtor covenants and agrees that it will defend Secured Party's right, title and lien in and to the Pledged Stock against the claims and demands of all Persons and that it
will have like title to and right to pledge any other property at any time hereafter pledged to the Secured Party as Pledged Stock. 

        3.     Concurrently
herewith, Debtor shall cause to be delivered to Agent Bank in its capacity as Secured Party, the certificate or certificates evidencing the Pledged Stock
(each individually a "Certificate" and collectively the "Certificates") together with an Irrevocable Stock Power with respect to each of the Pledged Subsidiary in the form of Exhibit A, affixed
hereto and by this reference incorporated herein and made a part hereof (the "Stock Power"). Each Certificate evidencing the Pledged Stock shall be delivered to Secured Party in suitable form for
transfer by delivery and shall be accompanied by a duly executed Stock Power, all in form and substance reasonably satisfactory to Secured Party. 

        4.     Upon
the full and complete satisfaction of the Revolving Credit Note and all other amounts owing under any of the Loan Documents and termination of the Bank Facilities,
Secured Party shall release its security interest hereunder, and will deliver to Debtor the Certificates evidencing the Pledged Stock, together with all Stock Powers, and Secured Party shall, at the
request and expense of Debtor, file such documents and take such action as may be required by law or as Debtor may reasonably request, at Debtor's expense, to release Secured Party's security interest
in the Pledged Stock. 

        5.     Secured
Party shall have with respect to the Pledged Stock the rights and obligations of a secured party under the Nevada Uniform Commercial Code, Chapter 104 of the
Nevada Revised Statutes (the "Code"). Such rights shall include, without limitation, subject to all applicable Gaming Laws: 

        a.     The
right, upon the occurrence and during the continuance of an Event of Default, to have the Pledged Stock or any part thereof transferred to its own name or to the name
of its nominee; or, if any Pledged Stock has been sold by Secured Party in foreclosure after the occurrence of an Event of Default, to have such Pledged Stock transferred to and issued in the name of
the purchaser. 

        b.     The
right, upon the occurrence and continuance of an Event of Default, to sell, assign or deliver as many shares of the Pledged Stock as is reasonably necessary to repay
the defaulted Indebtedness owing the Banks, together with expenses, including, but not limited to, reasonable selling expenses, broker's
fees and attorneys' fees attendant upon such sale and repayment, at public or private sale, as Secured Party, at its sole option, may elect, and without demand or advertisement, unless otherwise
required by law. 

        6.     Debtor
hereby covenants, agrees and acknowledges that an "Event of Default" shall exist under this Agreement upon the occurrence of any of the following events or
conditions, and without 

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the
necessity of any demand or notice except as may be expressly required herein or under the Credit Agreement: 

        a.     the
occurrence of any "Event of Default" as defined and described in the Credit Agreement; and/or 

        b.     any
default hereunder not cured within thirty (30) days after written notice from Agent Bank. 

        7.     At
any private or public sale of the Pledged Stock or any part thereof, Secured Party may, to the extent permitted under applicable Law and subject to compliance with all
applicable Gaming Laws, purchase and pay for the same by cancellation of a principal amount of the Credit Facility and Revolving Credit Note or other amounts owing under the Credit Agreement and Loan
Documents equal to the Purchase Price and free of any right of redemption on the part of Debtor. For the purpose of this Paragraph, the "Purchase Price" where the Pledged Stock is listed on any
publicly traded stock exchange ("Exchange"), shall be deemed to be the mean of the high and low selling prices in that Exchange on the date of sale. Secured Party may, in its sole and absolute
discretion, sell all or any part of the Pledged Stock at private sale in such manner and under such circumstances as Secured Party may deem necessary or advisable in order that the sale may be
lawfully conducted. Without limiting the foregoing, Secured Party may (i) approach and negotiate with a limited number of potential purchasers; and (ii) restrict the prospective bidders
or purchasers to persons who will represent and agree that they are purchasing the Pledged Stock for their own account for investment and not with a view to the distribution or resale thereof. In the
event that the Pledged Stock is sold at private sale, Debtor agrees that if the Pledged Stock is sold in a manner that conforms with reasonable commercial practices of banks, commercial finance
companies, insurance companies or other financial institutions disposing of property similar to the Pledged Stock, then: (aa) the sale shall be deemed to be commercially reasonable in all respects;
and (bb) Secured Party shall not incur any liability or responsibility to Debtor in connection therewith, notwithstanding the possibility that a substantially higher price might have been realized at
a public sale. Debtor recognizes that a ready market may not exist for the Pledged Stock if it is not regularly traded on a recognized securities exchange, and that a sale by Secured Party of the
Pledged Stock for an amount substantially less than a pro rata share of the fair market value of the issuer's assets minus liabilities may be commercially reasonable in view of the difficulties that
may be encountered in attempting to sell the Pledged Stock. Secured Party agrees, however, that the Debtor shall have all rights, including rights of notice, provided by the Code. In any case where
notice is required, ten (10) days notice shall be deemed to be reasonable notice. In the event of any sale hereunder, Secured Party shall apply the proceeds in the order set forth in
Section 7.03 of the Credit Agreement. Secured Party may resort to the Pledged Stock or any portion thereof with no requirement on the part of Secured Party to proceed first against any other
Person or Collateral or under any other Security Documentation. Additionally, (a) Debtor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with
respect to the Pledged Stock, whether before or after sale hereunder and all rights, if any, of marshalling of the Pledged Stock and any other security for the obligations of the Borrowers under the
Credit Agreement or otherwise; (b) Debtor agrees it will not sell or otherwise dispose of or create any lien on any portion of the Pledged Stock (except as permitted by the Credit Agreement);
and (c) Debtor agrees to promptly take all actions required under applicable law to maintain the perfection of the security interest in the Pledged Stock in the event that such stock is or
becomes uncertified and to take such actions as the Secured Party reasonably deems necessary or desirable to effect the foregoing and to permit the Secured Party to exercise any of its rights and
remedies hereunder. 

        8.     While
the Pledged Stock shall continue to be held by Secured Party pursuant to this Agreement, so long as no Event of Default has occurred and remains continuing and
until written notice from Secured Party: (a) Debtor shall be entitled to exercise any rights (including, without limitation, the right to vote the Pledged Stock) or subscription privileges
accruing to it as the owner of 

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the
Pledged Stock which are not in violation of the terms of this Agreement or the Credit Agreement or any other Loan Document or any other instrument or agreement referred to herein or therein, or
which would have the effect of impairing the security interest of Secured Party, any Bank or holder of the Revolving Credit Note, provided, however, that any additional shares of stock purchased or
otherwise received on account of any such rights or subscription privileges shall be delivered to Secured Party, together with an appropriate Stock Power, and shall be treated as part of the Pledged
Stock; and (b) Debtor shall be entitled to receive and to retain and use any dividends or distributions paid in respect of the Pledged Stock. Subject to compliance with applicable Gaming Laws,
the Secured Party shall also be entitled to receive directly, and retain as part of the Collateral: 

        a.     all
other or additional stock or securities (other than Cash or Cash Equivalents) paid or distributed by way of dividend in respect of the Pledged Stock; 

        b.     all
other or additional stock or securities (other than Cash or Cash Equivalents) paid or distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar rearrangement; and 

        c.     all
other or additional stock or other securities (other than Cash or Cash Equivalents) which may be paid in respect of the Pledged Stock by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization. 

        9.     Debtor
will at all times comply with all Securities and Exchange Commission, all applicable Gaming Authorities and other regulatory requirements with respect to its
ownership and pledge of the Pledged Stock. Secured Party will at all times comply with all Securities and Exchange Commission, Gaming Authorities and other regulatory requirements with respect to the
pledge and security interest in the Pledged Stock. 

        10.   Upon
the occurrence and continuance of any Event of Default hereunder, subject to applicable law and the requirements of the Gaming Authorities: (a) Secured Party
shall have the right, upon written notice to Debtor, but shall not be required, to vote or give its consent with respect to the voting of any or all of the Pledged Stock, and in such event and for
such purpose Debtor hereby irrevocably constitutes and appoints Secured Party the proxy and attorney-in-fact of the Debtor, with full power of substitution to do so, and
(b) Secured Party shall be entitled to receive all dividends and distributions and apply the same toward payment of the Indebtedness owing under the Bank Facilities in the manner and sequence
set forth in Section 7.03 of the Credit Agreement. 

        11.   The
Debtor represents to Secured Party that the Debtor has made its own arrangements for keeping informed of changes or potential changes affecting the Pledged Stock
including, but not limited to, rights to convert, rights to subscribe, payment of dividends, reorganization or other exchanges, tender offers and voting rights, and the Debtor agrees that Secured
Party shall have no responsibility or liability for informing the Debtor of any such changes or potential changes or for taking any action or omitting to take any action with respect thereto. 

        12.   No
renewal, extension, amendment, restatement or modification of the Credit Agreement, Revolving Credit Note or any other Loan Document shall affect the rights of
Secured Party with respect to the Pledged Stock or any part thereof, except to the extent specifically provided in such renewal, extension, amendment, restatement or modification. No release or
surrender of any Pledged Stock as security hereunder shall affect the security interest in any of the remaining Pledged Stock not so released or surrendered. Secured Party's rights, liens and security
interests hereunder shall continue unimpaired and Debtor shall be and remain obligated in accordance with the terms hereof notwithstanding any compromise or other indulgence granted by Secured Party.
The Debtor hereby waives notice of acceptance of this Agreement and of extensions of credit, loans, advances, or other financial assistance made by Banks to Borrowers. The Debtor further waives
presentment and demand for payment on the Revolving Credit Note, protest and notice of dishonor or default with respect to 

4

 

the
Revolving Credit Note or any other Loan Document, and all other notices to which the Debtor might otherwise be entitled except as herein otherwise expressly provided. 

        13.   All
notices and other communications provided to any party hereto under this Agreement shall be in writing or by facsimile and addressed, delivered or transmitted to
such party at its address or facsimile number set forth in the Credit Agreement or at such other address or facsimile number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted. 

        14.   Whether
or not the transactions contemplated hereunder are completed, the Debtor will pay all expenses relating to this Agreement, including, but not limited to: 

        a.     All
reasonable costs, outlays, attorneys' fees and expenses of any kind and character had or incurred in the enforcement or defense of any of the provisions of this
Agreement, the preparation for, negotiations regarding, consultations concerning, or the defense of legal proceedings involving any claim or claims made or threatened against Secured Party or any Bank
arising out of this transaction or the protection of the Pledged Stock securing the Bank Facilities or advances made hereunder; 

        b.     All
filing and recording fees, costs, expenses which may be incurred by Secured Party in respect of the filing and/or recording of any document or instrument relating to
the security interests granted in this Agreement. 

        15.   Debtor
agrees that it will duly execute and deliver to Secured Party any additional documents which may be reasonably required by Secured Party to give full effect to,
perfect or protect the pledge and security interest granted to Secured Party hereunder or to enable Secured Party to exercise and enforce its rights and remedies hereunder with respect to the Pledged
Stock and to preserve, protect and maintain the Pledged Stock and the value thereof, including, without limitation, payment of all taxes, assessments and other charges imposed on or relating to the
Pledged Stock. Debtor hereby consents and agrees that the issuers of the Pledged Stock, or any registrar or transfer agent or trustee for any of the Pledged Stock, shall be entitled to accept the
provisions of this Agreement as conclusive evidence of the right of Secured Party to effect any transfer or exercise any right hereunder, notwithstanding any other notice or direction to the contrary
heretofore or hereafter given by Debtor or any other Person to such issuers or to any such registrar or transfer agent or trustee. 

        16.   Following
the occurrence and during the continuance of an Event of Default, Debtor agrees to assist Secured Party in obtaining all approvals of the Gaming Authorities or
any other Governmental Authority that are required by law for or in connection with any action or transaction contemplated by this Agreement or by the Code and, at Secured Party's request after and
during the continuance of an Event of Default, to prepare, sign and file with the Gaming Authorities the transferor's portion of any application or applications for consent to the transfer of control
thereof necessary or appropriate under applicable Gaming Laws for approval of any sale or transfer of the Pledged Stock pursuant to the exercise of Secured Party's remedies hereunder and under the
Loan Documents. 

        17.   This
Agreement shall be binding upon and inure to the benefit of the Debtor, Secured Party and their respective legal representatives, heirs, successors and assigns, and
the authorized transferees and holders of the Revolving Credit Note; provided, however, that Debtor may not assign or transfer any of its rights or obligations hereunder without the prior written
consent of Secured Party. 

        18.   This
Agreement, including the exhibits and other agreements referred to herein, constitutes the entire agreement between the parties relating to the subject matter
hereof and cannot be changed or terminated orally, and shall be deemed effective as of the date it is accepted by Secured Party. 

5

 

        19.   Other
than with respect to compliance with all applicable Gaming Laws, this Agreement shall be governed and construed under the laws of the State of Nevada in all
respects, including, but not limited to, matters of title, construction, validity, performance and discharge. Whenever possible, each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under said laws. However, if any provision of this Agreement shall be held to be prohibited or invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 

        20.   Time
is of the essence of this Agreement. 

        21.   Debtor
agrees to indemnify and hold harmless Secured Party in accordance with the provisions of Section 5.14 of the Credit Agreement which is incorporated by this
reference as though fully set forth herein. 

        22.   This
Security Agreement and Pledge of Stock may be executed in any number of separate counterparts with the same effect as if the signatures hereto and hereby were upon
the same instrument. All such counterparts shall together constitute one and the same document. 

        23.   This
Security Agreement and Pledge of Stock shall terminate upon Bank Facility Termination. Upon the occurrence of Bank Facility Termination, Secured Party shall return
the Pledged Stock to Debtor and take all such other actions as Debtor may reasonably request, as Debtor's expense, to terminate the lien and security interest created hereunder. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first hereinabove written. 

	DEBTOR:	 	SECURED PARTY:
	

MTR GAMING GROUP, INC.,

a Delaware corporation	
 	

WELLS FARGO BANK,

National Association,

Agent Bank
	

By	
 	

/s/ Edson R. Arneault
 Edson R. Arneault,

President	
 	

By	
 	

/s/ Virginia Christenson
 Virginia Christenson,

Vice President

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Exhibit 10.32    
    

CREDIT AGREEMENT  

        THIS AGREEMENT is entered into as of June 30, 2003, by and between STARTEK, INC., a Delaware corporation and STARTEK USA, INC., a Colorado
corporation ("Borrower"), ("severally and collectively Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"). 

RECITALS  

        Borrower has requested from Bank the credit accommodations described below (each, a "Credit" and collectively, the "Credit"), and Bank has agreed to provide
Credit to Borrowers on the terms and conditions contained herein. 

        NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as follows: 

ARTICLE I

CREDIT TERMS  

        SECTION 1.1. LINE OF CREDIT. 

        (a)    Line of Credit.    Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances
to Borrower from time to time up to and including June 30, 2005, not to exceed at any time the aggregate principal amount of Ten Million Dollars ($10,000,000.00) ("Line of Credit"), the
proceeds of which shall be used for working capital. Borrower's obligation to repay advances under the Line of Credit shall be evidenced by a promissory note substantially in the form of
Exhibit "A" attached hereto ("Line of Credit Note"), all terms of which are incorporated herein by this reference. 

        (b)    Limitation on Borrowings.    Outstanding borrowings under the Line of Credit, to a maximum of the principal
amount set forth above, shall not at any time exceed an aggregate of Fifteen Million Dollars ($10,000,000.00). 

        (c)    Borrowing and Repayment.    Borrower may from time to time during the term of the Line of Credit borrow,
partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in the Line of Credit Note; provided however, that the
total outstanding borrowings under the Line of Credit shall not at any time exceed the maximum principal amount available thereunder, as set forth above. 

        SECTION
1.2. INTEREST/FEES. 

        (a)    Interest.    The outstanding principal balance of each credit subject hereto shall bear interest at the rate of
interest set forth in each promissory note or other instrument or document executed in connection therewith. 

        (b)    Computation and Payment.    Interest shall be computed on the basis of a 360-day year,
actual days elapsed. Interest shall be payable at the times and place set forth in each promissory note or other instrument or document required hereby. 

        (c)    Commitment Fee.    Borrower shall pay to Bank a non-refundable commitment fee for the Line of
Credit equal to Ten Thousand Dollars ($10,000.00), which fee shall be due and payable monthly beginning June 30, 2003. 

        SECTION
1.3. COLLECTION OF PAYMENTS. STARTEK USA, INC authorizes Bank to collect all principal, interest and fees due under each credit subject hereto by charging STARTEK USA, INC's
deposit account number [9999999999] with Bank, or any other deposit account maintained by Borrower 

1

 

with
Bank, for the full amount thereof. Should there be insufficient funds in any such deposit account to pay all such sums when due, the full amount of such deficiency shall be immediately due and
payable by Borrower. 

ARTICLE II

REPRESENTATIONS AND WARRANTIES  

        Borrower makes the following representations and warranties to Bank, which representations and warranties shall survive the execution of this Agreement and shall
continue in full force and effect until the full and final payment, and satisfaction and discharge, of all obligations of Borrower to Bank subject to this Agreement. 

        SECTION
2.1. LEGAL STATUS. STARTEK, INC is a corporation, duly organized and existing and in good standing under the laws of the State of Delaware and STARTEK USA, INC is a corporation,
duly organized and existing and in good standing under the laws of the State of Colorado and is qualified or licensed to do business (and is in good standing as a foreign corporation, if applicable)
in all jurisdictions in which such qualification or licensing is required or in which the failure to so qualify or to be so licensed could have a material adverse effect on Borrower. 

        SECTION
2.2. AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract, instrument and other document required hereby or at any time hereafter delivered to Bank in
connection herewith (collectively, the "Loan Documents") have been duly authorized, and upon their execution and delivery in accordance with the provisions hereof will constitute legal, valid and
binding agreements and obligations of Borrower or the party which executes the same, enforceable in accordance with their respective terms. 

        SECTION
2.3. NO VIOLATION. The execution, delivery and performance by Borrower of each of the Loan Documents do not violate any provision of any law or regulation, or contravene any
provision of the Articles of Incorporation or By-Laws of Borrower, or result in any breach of or default under any contract, obligation, indenture or other instrument to which Borrower is
a party or by which Borrower may be bound. 

        SECTION
2.4. LITIGATION. There are no pending, or to the best of Borrower's knowledge threatened, actions, claims, investigations, suits or proceedings by or before any governmental
authority, arbitrator, court or administrative agency which could have a material adverse effect on the financial condition or operation of Borrower other than those disclosed by Borrower to Bank in
writing prior to the date hereof. 

        SECTION
2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial statement Borrower dated December 31, 2002, a true copy of which has been delivered by Borrower to Bank prior to the
date hereof, (a) is complete and correct and presents fairly the financial condition of Borrower (b) discloses all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or unliquidated, fixed or contingent, and (c) has been prepared in accordance with generally accepted accounting
principles consistently applied.
Since the date of such financial statement there has been no material adverse change in the financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or
otherwise encumbered any of its assets or properties except in favor of Bank or as otherwise permitted by Bank in writing. 

        SECTION
2.6. INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or adjustments of its income tax payable with respect to any year. 

        SECTION
2.7. NO SUBORDINATION. There is no agreement, indenture, contract or instrument to which Borrower is a party or by which Borrower may be bound that requires the subordination in 

2

 

right
of payment of any of Borrower's obligations subject to this Agreement to any other obligation of Borrower. 

        SECTION
2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter possess, all permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade
names, patents, and fictitious names, if any, necessary to enable it to conduct the business in which it is now engaged in compliance with applicable law. 

        SECTION
2.9. ERISA. Borrower is in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified
from time to time ("ERISA"); Borrower has not violated any provision of any defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect to each
Plan; and each Plan will be able to fulfill its benefit obligations as they come due in accordance with the Plan documents and under generally accepted accounting principles. 

        SECTION
2.10. OTHER OBLIGATIONS. Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract,
instrument or obligation. 

        SECTION
2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing prior to the date hereof, Borrower is in compliance in all material respects with all applicable
federal or state environmental, hazardous waste, health and safety statutes, and any rules or regulations adopted pursuant thereto, which govern or affect any of Borrower's operations and/or
properties, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal
Resource
Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time. None of the operations of Borrower
is the subject of any federal or state investigation evaluating whether any remedial action involving a material expenditure is needed to respond to a release of any toxic or hazardous waste or
substance into the environment. Borrower has no material contingent liability in connection with any release of any toxic or hazardous waste or substance into the environment. 

ARTICLE III

CONDITIONS  

        SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit contemplated by this Agreement is subject to the fulfillment
to Bank's satisfaction of all of the following conditions: 

        (a)    Approval of Bank Counsel.    All legal matters incidental to the extension of credit by Bank shall be
satisfactory to Banks counsel. 

        (b)    Documentation.    Bank shall have received, in form and substance satisfactory to Bank, each of the following,
duly executed: 

        (i)    This
Agreement and each promissory note or other instrument or document required hereby. 

        (ii)   Corporate
Resolution: Borrowing (2). 

        (iii)  Certificate
of Incumbency (2). 

        (iv)  Such
other documents as Bank may require under any other Section of this Agreement. 

3

 

        (c)    Financial Condition.    There shall have been no material adverse change, as determined by Bank, in the
financial condition or business of Borrower or any guarantor hereunder, nor any material decline,
as determined by Bank, in the market value of any collateral required hereunder or a substantial or material portion of the assets of Borrower or any such guarantor. 

        (d)    Insurance.    Borrower shall have delivered to Bank evidence of insurance coverage on all Borrower's property,
in form, substance, amounts, covering risks and issued by companies satisfactory to Bank, and where required by Bank, with loss payable endorsements in favor of Bank. 

        SECTION
3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each extension of credit requested by Borrower hereunder shall be subject to the fulfillment to Bank's
satisfaction of each of the following conditions: 

        (a)    Compliance.    The representations and warranties contained herein and in each of the other Loan Documents
shall be true on and as of the date of the signing of this Agreement and on the date of each extension of credit by Bank pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no Event of Default as defined herein, and no condition, event or act which with the giving of notice or the passage of
time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist. 

        (b)    Documentation.    Bank shall have received all additional documents which may be required in connection with
such extension of credit. 

ARTICLE IV

AFFIRMATIVE COVENANTS  

        Borrower covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Bank
otherwise consents in writing: 

        SECTION
4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other liabilities due under any of the Loan Documents at the times and place and in the manner specified
therein, and immediately upon demand by Bank, the amount by which the outstanding principal balance of any credit subject hereto at any time exceeds any limitation on borrowings applicable thereto. 

        SECTION
4.2. ACCOUNTING RECORDS. Maintain adequate books and records in accordance with generally accepted accounting principles consistently applied, and permit any representative of
Bank, at
any reasonable time, to inspect, audit and examine such books and records, to make copies of the same, and to inspect the properties of Borrower. 

        SECTION
4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and detail satisfactory to Bank for STARTEK, INC: 

        (a)   not
later than 90 days after and as of the end of each fiscal year, a financial statement to include the 10K report; 

        (b)   not
later than 45 days after and as of the end of each quarter, a financial statement to include the 10Q report; 

        (c)   not
later than 90 days after and as of the end of each fiscal year, an aged listing of accounts receivable and accounts payable, and a reconciliation of accounts; 

        (d)   from
time to time such other information as Bank may reasonably request from the Borrower. 

4

 

        SECTION
4.4. COMPLIANCE. Preserve and maintain all licenses, permits, governmental approvals, rights, privileges and franchises necessary for the conduct of its business; and comply with
the provisions of all documents pursuant to which Borrower is organized and/or which govern Borrower's continued existence and with the requirements of all laws, rules, regulations and orders of any
governmental authority applicable to Borrower and/or its business. 

        SECTION
4.5. INSURANCE. Maintain and keep in force insurance of the types and in amounts customarily carried in lines of business similar to that of Borrower, including but not limited
to fire, extended coverage, public liability, flood, property damage and workers' compensation, with all such insurance carried with companies and in amounts satisfactory to Bank, and deliver to Bank
from time to time at Bank's request schedules setting forth all insurance then in effect. 

        SECTION
4.6. FACILITIES. Keep all properties useful or necessary to Borrower's business in good repair and condition, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently preserved and maintained. 

        SECTION
4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness, obligations, assessments and taxes, both real or personal including without limitation
federal and state income taxes and state and local property taxes and assessments, except such (a) as Borrower may in good faith contest or as to which a bona fide dispute may arise, and
(b) for which Borrower has made provision, to Bank's satisfaction, for eventual payment thereof in the event Borrower is obligated to make such payment. 

        SECTION
4.8. LITIGATION. Promptly give notice in writing to Bank of any litigation pending or threatened against Borrower with a claim in excess. 

        SECTION
4.9. FINANCIAL CONDITION. Maintain STARTEK, INC's consolidated financial condition as follows using generally accepted accounting principles consistently applied and used
consistently with prior practices (except to the extent modified by the definitions herein): 

        (a)   Tangible
Net Worth measured at the end of each fiscal year, with "Tangible Net Worth" defined as the aggregate of total stockholders' equity plus subordinated debt less
any intangible assets, not at any time less than $80,000,000.00 through December 30, 2003 and shall increase (but never decrease) as of December 31, 2003 and as of the close of each
fiscal year by an amount equal to 25% of net income (but only if positive) for each fiscal year then ended. 

        (b)   Net
income after taxes not less than $1.00 on an annual basis, determined as of each fiscal year end. Company shall not post losses in any two consecutive quarters.
Borrower could lose its entire investment in and notes receivable from Gifts.com, Inc. For the purposes of this Section 4.9 (b) any write-down pertaining to
Gifts.com, Inc. will be excluded. 

        SECTION
4.10. NOTICE TO BANK. Promptly (but in no event more than five (5) days after the occurrence of each such event or matter) give written notice to Bank in reasonable detail
of: (a) the occurrence of any Event of Default, or any condition, event or act which with the giving of notice or the passage of time or both would constitute an Event of Default;
(b) any change in the name or the organizational structure of Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss
through liability or property damage, or through fire, theft or any other cause affecting Borrower's property. 

5

   ARTICLE V

NEGATIVE COVENANTS  

        Borrower further covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower will not without
Bank's prior written consent: 

        SECTION
5.1. USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except for the purposes stated in Article I hereof. 

        SECTION
5.2. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or unsecured,
matured or unmatured, liquidated or unliquidated, joint or several, that exceeds $10,000,000.00 per transaction and $15,000,000.00 in the aggregate during the term of the loan, except (a) the
liabilities of Borrower to Bank, and (b) any other liabilities of Borrower existing as of, and disclosed to Bank prior to, the date hereof. 

        SECTION
5.3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other entity; make any substantial change in the nature of Borrower's business as conducted as
of the date hereof; acquire all or substantially all of the assets of any other entity; nor sell, lease, transfer or otherwise dispose of all or a substantial or material portion of Borrower's assets
except in the ordinary course of its business or upon prior written consent of Bank, which will not be unreasonably withheld. 

        SECTION
5.4. GUARANTIES. Guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of
business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of Borrower as security for, any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Bank. 

        SECTION
5.5. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or investments in any person or entity in excess of $15,000,000.00 during the term of the loan, except any of the
foregoing existing as of, and disclosed to Bank prior to, the date hereof. This excludes current trading or investment for sale portfolio. 

        SECTION
5.6. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either in cash, stock or any other property on Borrower's stock now or hereafter outstanding, nor
redeem, retire, repurchase or otherwise acquire any shares of any class of Borrower's stock now or hereafter outstanding in such amounts that would cause a failure to comply with the terms of this
agreement. 

        SECTION
5.7. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of Borrower's assets now owned or hereafter acquired
that exceeds $10,000,000.00 per transaction and $15,000,000.00 in the aggregate during the term of the loan, except any of the foregoing in favor of Bank or which is existing as of, and disclosed to
Bank in writing prior to, the date hereof. Borrower shall allow no person or entity a security interest in, or lien upon, its accounts receivable or inventory without prior written consent of Bank. 

6

 

ARTICLE VI

EVENTS OF DEFAULT  

        SECTION 6.1. The occurrence of any of the following shall constitute an "Event of Default" under this Agreement: 

        (a)   Borrower
shall fail to pay when due any principal, interest, fees or other amounts payable under any of the Loan Documents. 

        (b)   Any
financial statement or certificate furnished to Bank in connection with, or any representation or warranty made by Borrower or any other party under this Agreement
or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made. 

        (c)   Any
default in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other Loan Document (other than those
referred to in subsections (a) and (b) above), and with respect to any such default which by its nature can be cured, such default shall continue for a period of twenty
(20) days from its occurrence. 

        (d)   Any
default in the payment or performance of any obligation, or any defined event of default, under the terms of any contract or instrument (other than any of the Loan
Documents) pursuant to which Borrower has incurred any debt or other liability to any person or entity, including Bank. 

        (e)   The
filing of a notice of judgment lien against Borrower; or the recording of any abstract of judgment against Borrower in any county in which Borrower has an interest
in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the assets of Borrower; or the entry of a judgment against Borrower. 

        (f)    Borrower
shall become insolvent, or shall suffer or consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or any of its
property, or shall generally fail to pay its debts as they become due, or shall make a general assignment for the benefit of creditors; Borrower shall file a voluntary petition in bankruptcy,
or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time ("Bankruptcy Code"), or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or any involuntary petition or proceeding pursuant
to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors is filed or commenced against Borrower, or Borrower shall file an
answer admitting the jurisdiction of the court and the material allegations of any involuntary petition; or Borrower shall be adjudicated a bankrupt, or an order for relief shall be entered against
Borrower by any court of competent jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors. 

        (g)   There
shall exist or occur any event or condition which Bank in good faith believes impairs, or is substantially likely to impair, the prospect of payment or performance
by Borrower of its obligations under any of the Loan Documents. 

        (h)   The
dissolution or liquidation of Borrower or any of its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of
Borrower. 

        (i)    Any
change in ownership during the term of this Agreement of an aggregate of twenty-five percent (25%) or more of the common stock of Borrower. 

        SECTION
6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of Borrower under each of the Loan Documents, any term thereof to the contrary
notwithstanding, shall at Bank's option and without notice become immediately due and payable without presentment, 

7

 

demand,
protest or notice of dishonor, all of which are hereby expressly waived by each Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the Loan
Documents shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available under each of the Loan Documents, or accorded by law, including without
limitation the right to resort to any or all security for any credit subject hereto and to exercise any or all of the rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any
other rights, powers or remedies provided by law or equity. 

ARTICLE VII

MISCELLANEOUS  

        SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of the Loan Documents shall affect or
operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise
thereof or the exercise of any other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of the Loan Documents must be in writing
and shall be effective only to the extent set forth in such writing. 

        SECTION
7.2. NOTICES. All notices, requests and demands which any party is required or may desire to give to any other party under any provision of this Agreement must be in writing
delivered to each party at the following address: 

	BORROWER:	 	STARTEK, INC.

STARTEK USA, INC.

100 Garfield Street

Denver, Colorado 80270
	

BANK:	
 	

WELLS FARGO BANK, NATIONAL ASSOCIATION

1740 Broadway

Denver, Colorado 80274

or
to such other address as any party may designate by written notice to all other parties. Each such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand
delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if
sent by telecopy, upon receipt. 

        SECTION
7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated costs of Bank's in-house counsel), expended or incurred by Bank in connection with (a) the negotiation
and preparation of this Agreement and the other Loan Documents, Bank's continued administration hereof and thereof, and the preparation of any amendments and waivers hereto and thereto, (b) the
enforcement of Bank's rights and/or the collection of any amounts which become due to Bank under any of the Loan Documents, and (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity. 

8

 

        SECTION
7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns
of the parties; provided however, that Borrower may not assign or transfer its interest hereunder without Banks prior written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights and benefits under each of the Loan Documents. In connection therewith, Bank may disclose all documents and information
which Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, or any collateral required hereunder. 

        SECTION
7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute the entire agreement between Borrower and Bank with respect to each credit subject hereto
and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. This Agreement may be amended or modified only in writing signed by each
party hereto. 

        SECTION
7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their respective permitted successors and
assigns, and no other person or entity shall be a third party beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any other of the Loan
Documents to which it is not a party. 

        SECTION
7.7. TIME. Time is of the essence of each and every provision of this Agreement and each other of the Loan Documents. 

        SECTION
7.8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement. 

        SECTION
7.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which
when taken together shall constitute one and the same Agreement. 

        SECTION
7.10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 

        SECTION
7.11. ARBITRATION. 

        (a)    Arbitration.    The parties hereto agree, upon demand by any party, to submit to binding arbitration all
claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise arising out of or
relating to in any way (i) the loan and related Loan Documents which are the subject of this Agreement and its negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit. 

        (b)    Governing Rules.    Any arbitration proceeding will (i) proceed in a location in Colorado selected by
the American Arbitration Association ("AAA"); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any
of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA's commercial dispute
resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to
be referred to, as 

9

 

applicable,
as the "Rules"). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any party who fails or refuses to submit to
arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law. 

        (c)    No Waiver of Provisional Remedies Self-Help and Foreclosure.    The arbitration requirement does
not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of
collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or
after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder,
including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph. 

        (d)    Arbitrator Qualifications and Powers.    Any arbitration proceeding in which the amount in controversy is
$5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and
deliberations. The arbitrator will be a neutral attorney licensed in the State of Colorado or a neutral retired judge of the state or federal judiciary of Colorado, in either case with a minimum of
ten years experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give
effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with
the substantive law of Colorado and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective
any award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure, the Colorado Rules of Civil Procedure or other applicable law. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the
right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. 

        (e)    Discovery.    In any arbitration proceeding discovery will be permitted in accordance with the Rules. All
discovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date and within 180 days
of the filing of the dispute with the AAA. Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing
that the request for discovery is essential for the party's presentation and that no alternative means for obtaining information is available. 

        (f)    Class Proceedings and Consolidations.    The resolution of any dispute arising pursuant to the terms of
this Agreement shall be determined by a separate arbitration proceeding and such dispute shall not be consolidated with other disputes or included in any class proceeding. 

        (g)    Payment Of Arbitration Costs And Fees.    The arbitrator shall award all costs and expenses of the arbitration
proceeding. 

10

 

        (h)    Miscellaneous.    To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all
action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement
for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control.
This arbitration provision shall survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties. 

11

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first written above. 

	

STARTEK, INC.	
 	

WELLS FARGO BANK, NATIONAL ASSOCIATION
	

By:	
 	

/s/  WILLIAM E. MEADE, JR.      
 William E. Meade, Jr.,

President/Chief Executive Officer	
 	

By:	
 	

/s/  WENDEE CROWLEY      
 Wendee Crowley,

Assistant Vice President
	

By:	
 	

/s/  DAVID I. ROSENTHAL      
 David I. Rosenthal,

Chief Financial Officer	
 	

 	
 	

 
	

STARTEK USA, INC.	
 	

 	
 	

 
	

By:	
 	

/s/  WILLIAM E. MEADE, JR.      
 William E. Meade, Jr.,

President/Chief Executive Officer	
 	

 	
 	

 
	

By:	
 	

/s/  DAVID I. ROSENTHAL      
 David I. Rosenthal,

Chief Financial Officer	
 	

 	
 	

 

12

   
Exhibit A to the Credit Agreement dated June 30, 2003 

	WELLS FARGO	 	REVOLVING LINE OF CREDIT NOTE
	
$10,000,000.00	
 	

Denver, Colorado
	 	 	June 30, 2003

        FOR
VALUE RECEIVED, the undersigned StarTek, Inc. and StarTek USA, Inc. ("Borrower") promises to pay to the order of WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its office at Colorado South RCBO, 1740 Broadway, 3rd Floor, Denver, CO
80274, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of  $10,000,000.00, or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein. 

1.     DEFINITIONS: 

        As
used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined: 

        1.1   "Business
Day" means any day except a Saturday, Sunday or any other day on which commercial banks in Colorado are authorized or required by law to close. 

        1.2   "Fixed
Rate Term" means a period commencing on a Business Day and continuing for 1, 2 or 3 months, as designated
by Borrower, during which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be
selected for a principal amount less than $100,000.00; and provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date
hereof. If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. 

        1.3   "LIBOR"
means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage equal to
100% less any LIBOR Reserve Percentage. 

        (a)   "Base
LIBOR" means the rate per annum for United States dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding that
such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for
a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in
its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market. 

        (b)   "LIBOR
Reserve Percentage" means the reserve percentage prescribed by the Board of Governors of the Federal Reserve System (or any successor) for "Eurocurrency
Liabilities" (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage during the applicable Fixed Rate Term. 

        1.4   "Prime
Rate" means at any time the rate of interest most recently announced within Bank at its principal office as its Prime Rate, with the understanding that the Prime
Rate is one of Bank's base rates and serves as the basis upon which effective rates of interest are calculated for those loans 

1

 

making
reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Bank may designate. 

2.     INTEREST:

        2.1   Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a  360-day year, actual days elapsed) either (a) at a
fluctuating rate per annum  1.00000% below the Prime Rate in effect from time to time, or (b) at a fixed rate per annum determined by Bank to be  1.85000% above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate, each
change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank. With respect to each LIBOR selection option selected hereunder, Bank is
hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any payments made thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted. 

        2.2   Selection of Interest Rate Options. At any time any portion of this Note bears interest determined in relation to
LIBOR, it may be continued by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a
new Fixed Rate Term designated by Borrower. At any time any portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that
it bears interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to select a LIBOR option for all or a
portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the interest rate option selected by Borrower;
(b) the principal amount subject thereto; and (c) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone (or such other
electronic method as Bank may permit) so long as, with respect to each LIBOR selection, (i) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than 3
Business Days after such notice is given, and (ii) such notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if
Bank, at it's sole option but without obligation to do so, accepts Borrower's notice and quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank, the
quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a redetermination by Bank of the applicable fixed rate. If no specific designation of interest is made at
the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the principal amount to
which such Fixed Rate Term applied. 

        2.3   Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to any other amounts due or
to become due hereunder, any and all (a) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (b) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed by the Federal
Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or
not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR to the extent they are not included in the calculation of LIBOR. In determining
which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower. 

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        2.4   Payment of Interest. Interest accrued on this Note shall be payable on the  last day of each month, commencing
July 31, 2003. 

        2.5   Default Interest. From and after the maturity date of this Note, or such earlier date as all principal owing hereunder
becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a  360-day year, actual days elapsed) equal to 4% above the rate of interest from time to time applicable to this Note. 

3.     BORROWING AND REPAYMENT:

        3.1   Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly
repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of the Credit Agreement between Borrower and Bank defined below;
provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at any
time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and payable in full on June 30, 2005. 

        3.2   Advances. Advances hereunder, to the total amount of the principal sum available hereunder, may be made by the holder at
the oral or written request of (a) A. Emmet Stephenson, Jr. or David I. Rosenthal or William E. Meade, Jr. or E. Preston Sumner, Jr. or Gene McKenzie or Aaron
Babl, any one acting alone, who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (b) any person, with respect to advances deposited to the credit of any deposit account of any Borrower, which advances, when so
deposited, shall be conclusively presumed to have been made to or for the benefit of each Borrower regardless of the fact that persons other than those authorized to request advances may have
authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by any Borrower. 

        3.3   Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and
second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the outstanding principal balance of this Note which bears interest determined
in relation to the Prime Rate, if any, and second, to the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments applied to the
oldest Fixed Rate Term first. 

4.     PREPAYMENT:

        4.1   Prime Rate. Borrower may prepay principal on any portion of this Note which bears interest determined in relation
to the Prime Rate at any time, in any amount and without penalty. 

        4.2   LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to
LIBOR at any time and in the minimum amount of $100,000.00; provided however, that if the outstanding principal balance of such portion of this
Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In consideration of Bank providing this prepayment option to Borrower, or
if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to
Bank immediately upon demand a fee 

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which
is the sum of the discounted monthly differences for each month from the month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each such month: 

        (a)   Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate
applicable to such amount had it remained outstanding until the last day of the Fixed Rate Term applicable thereto. 

        (b)   Subtract from the amount determined in (a) above the amount of interest which would have accrued for the same
month on the amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount
prepaid. 

        (c)   If
the result obtained in (b) for any month is greater than zero, discount that difference by LIBOR used in (b) above. 

        Each
Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full
extent of such costs, expenses and/or liabilities. Each Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per
annum 2.000% above the Prime Rate in effect from time to time (computed on the basis of a  360-day year, actual days
elapsed). Each change in the rate of interest on any such past due prepayment fee shall become effective on the date each Prime Rate change is announced within Bank. 

5.     EVENTS OF DEFAULT:

        This
Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of  June 30, 2003, as amended from time to time (the
"Credit Agreement"). Any default in the payment or performance of any obligation under this
Note, or any defined event of default under the Credit Agreement, shall constitute an "Event of Default" under this Note. 

6.     MISCELLANEOUS:

        6.1   Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder's option, may declare all
sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of
which are expressly waived by each Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Each Borrower shall pay to the
holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of
the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary
proceeding, contested matter or motion brought by Bank or any other:person) relating to any Borrower or any other person or entity. 

        6.2   Obligations. Joint and Several Should more than one person or entity sign this Note as a Borrower, the obligations
of each such Borrower shall be joint and several. 

        6.3   Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Colorado. 

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        IN
WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above. 

	

StarTek, Inc.	
 	

 	
 	

 
	

By:	
 	

/s/  WILLIAM E. MEADE, JR.      
 William E. Meade, Jr., President/Chief Executive Officer	
 	

 	
 	

 
	

By:	
 	

/s/  DAVID I. ROSENTHAL      
 David I. Rosenthal, Chief Financial Officer	
 	

 	
 	

 
	

StarTek USA, Inc.	
 	

 	
 	

 
	

By:	
 	

/s/  WILLIAM E. MEADE, JR.      
 William E. Meade, Jr., President/Chief Executive Officer	
 	

 	
 	

 
	

By:	
 	

/s/  DAVID I. ROSENTHAL      
 David I. Rosenthal, Chief Financial Officer	
 	

 	
 	

 

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QuickLinks

Exhibit 10.32

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