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
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.
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
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
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
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
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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
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CONCIERGE, INC. has exceeded $5,000,000 in revenue with XeTel in
the prior quarter.
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
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
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
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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