MANUFACTURING SERVICES AGREEMENT
This Manufacturing Services Agreement ("Agreement) is entered into by
("CONCIERGE, INC."), 531 Main St., PMB 963, El Segundo, California 90245 and
XeTel Corporation ("XeTel"), 2105 Gracy Farms Lane, Austin, Texas 78768. This
Agreement specifies the terms and conditions which shall apply to the
manufacturing services to be provided by XeTel to CONCIERGE, INC. during the
Term of this Agreement.
1. TERM. This Agreement becomes effective on the later of the signature
dates of the parties, and continues in effect until the date of
termination.
2. SERVICES PROVIDED. This Agreement applies to all Purchase Orders and
other communications regarding the service provided unless this
Agreement is explicitly referenced by title and Effective Date with
regarding to any exception to these terms and conditions. This Agreement
is not an authorization for XeTel to begin services.
3. DELIVERY
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a. XeTel shall make deliveries according to the mutually agreed upon
schedule within a window of plus five (5) or minus five (5)
working days. Deliverables will be shipped F.O.B. XeTel's
manufacturing facility.
b. Any claims for alleged discrepancies must be given within ten
(10) working days of the shipment or such claim is deemed waived
by CONCIERGE, INC.
4. CREDIT AND PAYMENT TERMS
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4.1 Payment method: All payments will be in US dollars.
4.2 Payment terms:
4.2.1. Payments for services performed under this Agreement are due and
payable promptly Net thirty (30) days after date of invoice.
4.2.2. If CONCIERGE, INC. becomes delinquent in payments to XeTel, XeTel
may do the following after notifying CONCIERGE, INC. in writing
and allowing CONCIERGE, INC. five (5) working days to resolve
said issues:
i. Charge interest at one and one-half percent (1-1/2%) per
month, but in no event shall the interest charged be
higher than the highest rate for which the parties may
legally contract; and/or
Exhibit 10.1
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ii. Withhold shipment of products/services until all of
CONCIERGE, INC.'s obligations have been brought current.
CONCIERGE, INC. will be given a reasonable amount of time
to bring invoices current prior to being placed on credit
hold. If XeTel elects to withhold shipment, CONCIERGE,
INC. is not relieved of any obligations hereunder; and/or
iii. Change credit terms and/or reporting frequency;
iv. Pursue legal remedies to collect the delinquent payments.
4.3 XeTel shall review CONCIERGE, INC.'s credit terms on a quarterly
basis and/or upon delinquent payments by CONCIERGE, INC. Net
30-day terms are subject to maintaining satisfactory liquidity
ratios, debt to equity ratios, and prompt payment of invoices.
CONCIERGE, INC. shall provide to XeTel quarterly financial
statements prepared in accordance with generally accepted
accounting principles within 30 days of each quarter end.
5. COORDINATION. Each party shall designate a Coordinator to represent that
party in the implementation of this Agreement. CONCIERGE, INC. has
identified Allen Kahn as its Coordinator, and XeTel has identified
Norman E. O'Shea as its Coordinator. Either party may change its
Coordinator by written notice to the other party.
6. ENGINEERING CHANGE ORDERS. CONCIERGE, INC. may initiate Engineering
Change Orders (ECOs) in accordance with the following:
a. CONCIERGE, INC. shall notify XeTel of the proposed ECO in
writing, including the documentation for the change to support
XeTel's research of the impact of the proposed ECO.
b. XeTel, upon receipt of the notice, will make its best effort to
review all costs impacted within five (5) working days. All cost
impacts and material availability issues will be reviewed and
agreed upon with CONCIERGE, INC. to enable CONCIERGE, INC. to
issue a purchase order for the charges prior to implementation.
c. Emergency ECOs will be implemented immediately at CONCIERGE,
INC.'s request and CONCIERGE, INC. will be liable for such costs
pertaining to the emergency ECO.
d. CONCIERGE, INC. shall be charged an implementation fee of $250
for each ECO it generates to cover costs associated with
documentation changes. These fees will be waived if
Exhibit 10.1
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CONCIERGE, INC. has exceeded $5,000,000 in revenue with XeTel in
the prior quarter.
7. PRICING
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a. All XeTel pricing for a particular product/service will be based
on a twelve (12) month forecast provided by CONCIERGE, INC. This
forecast should include a description of the product/service to
be purchased, quantity, and estimated delivery dates.
b. This pricing is firm for a twelve (12) month period from the date
of XeTel's acceptance of CONCIERGE, INC.'s Purchase Order, except
for Paragraph 7d, and shall be renegotiated at the end of the
period.
c. If the actual quantity of products/services ordered for delivery
during the twelve (12) month period is lower than the Annual
Forecast quantity, CONCIERGE, INC. may be subject to
XeTel/CONCIERGE, INC. supplier billbacks.
d. At any time, in the event of extraordinary increases or decreases
in the market price of fuels, materials, raw materials,
equipment, labor and other production costs, XeTel and CONCIERGE,
INC. can renegotiate in good faith with the other party the price
of goods not yet shipped or services to be performed. If, in good
faith, agreement is not reached, either party has the right to
terminate the specific service(s) or the entire Agreement subject
to the appropriate termination/cancellation charges set out in
Paragraphs 8 and 15 of this Agreement.
8. PURCHASE ORDERS, FORECASTS, RESCHEDULES, AND CANCELLATIONS
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a. Purchase Orders shall be placed a minimum of three months (3)
months in advance of delivery time. At any point in time,
CONCIERGE, INC. shall have a minimum of four (4) months of
purchase orders placed with XeTel. Also, CONCIERGE, INC. will
provide to XeTel an additional eight (8) months forecast to be
updated each month. XeTel will purchase materials in accordance
with the purchase order and the forecast based on the mutually
agreed upon lead-time and inventory buy policy. CONCIERGE, INC.
is liable for material purchased, particularly NCNR and
custom/unique items, if there is a schedule reduction or
cancellation. CONCIERGE, INC. is also liable for all material
purchased due to minimum buy quantifies including standard tape
and reel quantities.
b. In the event that CONCIERGE, INC. requests an expedited order
within the three (3) month window; a fee of $2,500 will be
charged to place or expedite material purchase orders in an
attempt to comply with such a request. Any such request will be
accompanied by a purchase order for
Exhibit 10.1
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XeTel to initiate this process. After receipt of the purchase
order covering the expedite charge, XeTel will make its best
effort to meet CONCIERGE, INC.'s requested delivery date and will
notify CONCIERGE, INC. within ten (10) business days of its
ability to meet such a requested delivery date. Such charge shall
apply independent of XeTel's ability to meet the expedited
delivery date.
c. CONCIERGE, INC. may reschedule deliveries on orders that are due
thirty (30) days or more from the date such change notice is
received by XeTel provided that:
(i) Material and manufacturing capacity permitting,
reschedules are allowed according to the following:
Deliveries within Order adjustments allowed
0-30 days Firm orders; no changes
31-60 days +/- 25% Order adjustment
61-90 days +/- 60% Order adjustment
>90 days +/- 100%
(ii) If such reschedule of delivery represents a delay in
shipment, the reschedule cannot be for more than sixty
(60) days from the original delivery date and CONCIERGE,
INC. agrees to provide XeTel an inventory prepayment by
the fifteenth day of each month equal to the amount of on-
hand inventory on the last day of each prior fiscal month,
if the on-hand inventory amount exceeds the material value
for orders to be produced in the subsequent month. XeTel
agrees to repay CONCIERGE, INC.'s prepaid amounts by the
fifteenth of the month to the extent on-hand inventory is
balanced with production requirements. CONCIERGE, INC.
agrees to commence inventory prepayments over the term of
this Agreement and its renewals upon XeTel's reasonable
written request. In the event of a schedule push-out,
XeTel agrees to carry out all reasonable actions necessary
to minimize CONCIERGE, INC.'s inventory liability
including, as allowed by XeTel's suppliers, rescheduling,
returning and/or restocking inventory to coincide with the
new schedule.
(iii) No more than two reschedules may be implemented per
purchase order and the new delivery cannot be, in any
case, later than sixty (60) days from the original
delivery date stated on the purchase order. Any orders
rescheduled for more than sixty (60) days will be
considered a cancellation and the terms in Paragraph 8c
will apply. If a reschedule represents an acceleration or
increase, XeTel will make its best effort to meet such
request, subject
Exhibit 10.1
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to material availability and manufacturing capacity. Any
additional costs, including but not limited to materials,
expedite fees, purchase price variances and labor incurred
by XeTel to meet CONCIERGE, INC.'s request will be the
liability of CONCIERGE, INC.
c. CONCIERGE, INC. may cancel any order scheduled for delivery more
than ninety (90) days from the date such cancellation notice is
given to XeTel, however CONCIERGE, INC. will make payment to
XeTel for all material acquired or restocked for the manufacture
of CONCIERGE, INC.'s products plus a handling charge of 10% for
the canceled product. However, XeTel will make its best effort to
mitigate such liability.
9. APPROVED VENDORS LIST. XeTel will follow CONCIERGE, INC.'s Approved
Vendor List (AVL) for all component parts purchased on behalf of
CONCIERGE, INC. CONCIERGE, INC.'s AVL must be provided to XeTel in
writing prior to any purchase being made and such AVL should be updated
by CONCIERGE, INC. monthly. In the event that XeTel offers alternatives
to CONCIERGE, INC.'s AVL, the alternative must be approved in writing by
CONCIERGE, INC. prior to beginning any production at XeTel's facility on
behalf of CONCIERGE, INC.
10. RELIANCE ON DESIGN(S). CONCIERGE, INC. acknowledges and recognizes that
XeTel must rely on the design that CONCIERGE, INC. furnishes to XeTel to
manufacture the CONCIERGE, INC. product, therefore if the product is
defective due to the inaccuracy of CONCIERGE, INC. design then
CONCIERGE, INC. agrees that XeTel shall be paid its original contracted
price for the product that is defective due to the CONCIERGE, INC.
design error.
11. WARRANTY
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THE FOLLOWING ARE IN LIEU OF ALL CONDITIONS OR WARRANTIES, EXPRESS,
IMPLIED, OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND OF ANY OTHER
WARRANTY OBLIGATION ON THE PART OF XETEL.
a. XeTel warrants the workmanship and XeTel furnished material used
for the products/services delivered under this Agreement to be
free from defects within the limits of the test provisions and to
conform to the XeTel Workmanship Standards for a period of ninety
(90) days from date of shipment to CONCIERGE, INC. At a minimum
a suitable electrical test is required for all assemblies by
XeTel, and for printed circuit board assemblies, in-circuit test
is the minimum electrical test.
Exhibit 10.1
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b. This warranty does not apply to material which becomes defective
due to CONCIERGE, INC.'s alteration or repair or to material
which is subjected to misuse, negligence or stress due to the
electrical circuit/system design or malfunction, or to any
product or component design related issues.
c. Defective goods as defined in 11.a. above will be repaired or
replaced by XeTel free of cost, if returned to XeTel within the
thirty (30) days after the end of the warranty period. Goods
returned after this period will be repaired or replaced for a
charge to be negotiated. This section sets out CONCIERGE, INC.'s
sole remedies for any defect in the goods. XeTel and CONCIERGE,
INC. must mutually agree if a debit can be taken against product
returned by CONCIERGE, INC.
d. The foregoing warranties are not transferable and may not be
relied upon or enforced by any person other than CONCIERGE, INC.
12. QUALITY AND WORKMANSHIP. All work performed by XeTel for CONCIERGE,
INC.'s product shall conform to IPC-A-610 latest revision, Class 2.
13. RETURN MATERIAL AUTHORIZATION. If product is found to be defective per
this Agreement, CONCIERGE, INC. will notify XeTel and XeTel will provide
a Return Material Authorization (RMA) number prior to CONCIERGE, INC.
returning the product. XeTel will attempt to provide an RMA number
within forty-eight (48) hours.
14. CONCIERGE, INC. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION.
CONCIERGE, INC. hereby represents and warrants, and also acknowledges
that XeTel is relying on such representations and warranties, that the
design(s) for CONCIERGE, INC.'s product(s) which CONCIERGE, INC.
furnished to XeTel is the original creation of CONCIERGE, INC. or
CONCIERGE, INC. has obtained such rights from the original creator to
disclose the design(s) to XeTel and also that the manufacture of this
product by XeTel will not violate or infringe upon any patent, trade
secret, copyright or any other proprietary or other right of any third
party. CONCIERGE, INC. also agrees to defend, indemnify, and hold XeTel,
its officers, directors, employees and agents harmless from and against
any losses, costs (including attorney's fees), claims, demands, actions,
damages, expenses, liabilities, or injuries arising out of or in any way
related to any alleged infringement of any patent, trade secret,
copyright, or other proprietary or other right of any third party
relating to the product design.
Exhibit 10.1
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15. TERMINATION
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a. Either party may terminate by written notice this Agreement for
convenience with one hundred eighty (180) days notice.
b. Either party may terminate by written notice this Agreement for
cause if any material or unreasonable default by the other party
remains uncured for more than thirty (30) days or if the other
party files or has filed against it any bankruptcy, insolvency or
receivership proceeding. The written notice shall specify the
conditions constituting the default and the corrective action, if
any, to cure such default.
c. In the event of termination, CONCIERGE, INC. shall be liable for:
1) direct cost of scheduled work-in-process for CONCIERGE, INC.,
2) direct cost of all inventory required for this work, 3) direct
cost of all non-cancelable Purchase Orders, 4) cancellation
and/or restocking charges on Purchase Orders placed on behalf of
CONCIERGE, INC., and 5) labor costs expended in procuring
(including rescheduling and/or cancellation), handling (including
internal restocking), preparing and/or processing material
associated with CONCIERGE, INC.'s products/services. XeTel will
pay for packaging expenses and CONCIERGE, INC. will pay for
freight expenses.
d. In the event of termination, each party shall prepare for an
orderly termination of this Agreement and return to the owning
party its materials, equipment, records, and specifications.
16. CONFIDENTIALITY/NON-DISCLOSURE
a. All information obtained by either party in connection with this
Agreement and which is identified as confidential or proprietary
to the other party shall be maintained in confidence.
b. The parties shall not disclose the existence of this Agreement or
its terms to others, except as may be necessary to enforce the
terms of this Agreement.
c. Each party agrees not to disclose to the other party the
confidential or proprietary information of others.
d. Within thirty (30) days after the termination or expiration of
the Agreement, both parties shall forward to the other party all
confidential information belonging to the other party which may
be in its possession. Thereafter, both parties shall make no
further use, either directly or indirectly, of any such
confidential information.
Exhibit 10.1
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e. The only rights or licenses which either party may claim as being
granted hereunder are those which are expressly granted
hereunder, and no rights or licenses are conveyed to either party
or to any third party by implication, waiver or estoppel.
17. LIMITATION OF LIABILITY. In no event shall XeTel be liable for special,
collateral, indirect, exemplary, incidental or consequential damages for
breach or any other provisions of this Agreement, including without
limitation, those provisions regarding warranties, guarantees,
indemnities, and patent infringement, such damages to include but not be
limited to, costs of removal and reinstallment of goods or items, loss
of good will, loss of profits, or loss of use. This limitation will
apply even if XeTel has been advised of the possibility of such damages.
18. FORCE MAJEURE. Neither party shall be liable for any delay in
performance or failure to perform, in whole or in part, when due to
labor dispute, strike, war or act of war (whether an actual declaration
is made or not), insurrection, riot, civil commotion, act of public
enemy, accident, fire, flood, or other act of God, act of any government
authority, judicial action, or similar causes beyond the reasonable
control of such party. If an event of force majeure occurs, the other
party shall be immediately notified.
19. RELATIONSHIP OF PARTIES. XeTel shall be deemed to be an independent
contractor of CONCIERGE, INC. and therefore not an agent or employee of
CONCIERGE, INC. CONCIERGE, INC. acknowledges that XeTel may from time to
time use additional subcontractors to complete the product and hereby
gives approval to XeTel to use such other subcontractors.
20. WAIVER. No failure or delay on the part of either party hereto in
exercising any right or remedy under the Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any such
right or remedy. No provision of the Agreement may be waived except in
writing signed by such party granting the waiver.
21. TAXES. CONCIERGE, INC. shall be responsible for and pay all taxes or
other similar costs imposed on XeTel by any jurisdiction as a result of
or in connection with the services performed or products or products
provided by XeTel hereunder.
22. SEVERABILITY. If any term or provision of this Agreement or the
application of this Agreement to any person, entity or circumstance is
found to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remainder of this Agreement
shall not be affected, but shall be valid and enforceable as if the
invalid term, condition or provision were not a part of this Agreement.
Exhibit 10.1
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23. PARTIES BOUND. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and assigns where
permitted by this Agreement.
24. SUPERSEDING EFFECT
a. This Agreement, including all attachments, constitutes the entire
agreement between the parties with respect to the subject matter
hereof, and supersedes all previous communications,
representations, understanding and agreements, either oral or
written, between the parties or any official or representative
hereof. This Agreement shall be modified only in writing and
signed by authorized representatives of the parties.
b. Any term, condition and/or provision of CONCIERGE, INC.'s
Purchase Order or other documentation, which is in any way
inconsistent with or in addition to these terms, shall not be
binding upon XeTel unless accepted by XeTel in writing. The
submission of a Purchase Order to XeTel or retention by
CONCIERGE, INC. of any goods or services delivered hereunder
shall be conclusively deemed acceptance of the terms hereof.
XeTel's failure to object to terms contained in any communication
fromCONCIERGE, INC. will not be an acceptance thereof or a waiver
of the terms hereof.
25. NON-ASSIGNMENT. This Agreement may not be assigned without prior written
agreement and approval of the other party.
26. APPLICABLE LAW. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Texas. The
exclusive jurisdiction for any legal proceeding arising from this
Agreement shall be the courts of Texas. If any legal action is necessary
to enforce the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees in addition to any other relief
to which that party may be entitled. This provision shall be construed
as applicable to the entire Agreement.
27. NOTICES. All required or permitted notices will be given by personal
delivery, registered U.S. mail or Federal Express to the addresses
listed above.
The parties execute this Agreement to be effective on the later of the dates
referenced below.
XeTel Corporation CONCIERGE, INC.
By: /s/ Norman E. O'Shea By: /s/ Allen E. Kahn
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Exhibit 10.1
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Name: Norman E. O'Shea Name: Allen E. Kahn
Title: Vice President & Title: President
General Manager
Date: 7/21/2000 Date: 7/21/00
Rev. 01/00
Exhibit 10.1
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