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                                                                 EXHIBIT 10.19

                        MANUFACTURING SERVICES AGREEMENT

This Manufacturing Services Agreement ("Agreement") is entered into by
Pathlight Technology, Inc. ("PATHLIGHT"), 9 Brown Road Ithaca, NY 14850, and
XeTel Corporation ("XeTel"), 2105 Gracy Farms Lane, Austin, Texas 78758. This
Agreement specifies the terms and conditions which shall apply to the
manufacturing services to be provided by XeTel to PATHLIGHT 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 for an initial period of
         one year. The Agreement will remain in effect beyond this initial one
         year period unless terminated by either party as stipulated in this
         Agreement.

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
         regard to any exception to these terms and conditions. This Agreement
         is not an authorization for XeTel to begin services.

3.       DELIVERY

         a.       XeTel agrees to provide to PATHLIGHT the products ordered
                  pursuant to a Purchase Order in accordance with the delivery
                  requirements specified therein, or as modified in paragraph 3e
                  below, so long as such requested deliveries comply with the
                  provisions of Section 8. XeTel agrees to use commercially
                  reasonable efforts to deliver all products on time in
                  accordance with PATHLIGHT's requested delivery dates. Over a
                  three (3) month period, products must be delivered, on
                  average, no more than five (5) days early and no days late
                  from XeTel's committed delivery date. XeTel agrees that no
                  individual deliveries shall be more than five (5) days early
                  or late except in unusual situations beyond XeTel's reasonable
                  control where deliveries will be made at the earliest
                  practical time. If XeTel cannot meet its committed delivery
                  date, XeTel shall promptly notify PATHLIGHT of XeTel's revised
                  commit date and PATHLIGHT may, at it's option: (i) terminate
                  this Agreement in accordance with Section 15; (ii) hold XeTel
                  liable for any premium material, labor, and/or shipping costs
                  incurred by XeTel as a result of expediting to minimize the
                  lateness of the delivery; (iii) exercise all other remedies
                  provided at law, in equity and in this Agreement.

         b.       Any claims for alleged discrepancies must be given within
                  thirty (30) days of the shipment or such claim is deemed
                  waived by PATHLIGHT.

         c.       If XeTel is unable to meet its delivery commitments and must
                  allocate its capacity, inventory, test equipment, resources,
                  use of personnel, etc. that are used to produce products, then
                  XeTel agrees to: (i) act in good faith; and/or (ii) source
                  PATHLIGHT's product(s) at any of its manufacturing service
                  locations provided that such locations maintain the same
                  approved processes and that Pathlight is afforded a two (2)
                  week period to approve such manufacturing locations; (iii)
                  allocate its capacity, inventory, test equipment, resources,
                  use of personnel, etc. on a pro rata basis to fill PATHLIGHT's
                  and XeTel's other customers orders. XeTel will, at its sole
                  discretion, allocate material, equipment and resources
                  according to the following priorities: (I) emergency
                  (end-customer down or a safety defect) requirements will be
                  filled first; and (2) then a fair allocation (such as
                  first-in, first-out) between manufacturing orders and
                  non-emergency requirements.

         d.       XeTel will only deliver the products specified in PATHLIGHT's
                  Purchase Orders. XeTel further agrees to build no more than
                  four (4) weeks of finished goods "box level" product at any
                  given time thus minimizing the potential for high rework
                  costs.

         e.       In the event that PATHLIGHT requests XeTel to hold shipments
                  of completed product for aggregation to enable prompt
                  shipment of product for order fulfillment, to implement an
                  engineering change, or for other request, XeTel shall invoice
                  and hold the product, and

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                 Pathlight shall take full ownership of and title to the product
                 on XeTel's manufacturing premises, upon the shipment to a
                 designated segmented section of XeTel's on-site warehouse or a
                 third party warehouse upon notification to Pathlight. Such
                 shipments shall be one-hundred percent complete with respect to
                 underlying purchase orders. Such shipments are nonreturnable
                 except for valid warranty claims. Pathlight shall consign its
                 product to XeTel for any other subsequent requirements. In the
                 event the holding period for such product exceeds forty-five
                 days, XeTel, upon notification to Pathlight, is pre-authorized
                 to transfer Pathlight's inventory to a third party warehouse
                 or, at Pathlight's direction to Pathlight; XeTel shall make
                 such transfer and Pathlight shall be invoiced for storage
                 costs. XeTel shall move product from Pathlight's segmented
                 warehouse or the third party warehouse upon receipt of separate
                 instructions from Pathlight. In no event shall payments of
                 invoices be delayed as a result of these provisions.

4.       CREDIT AND PAYMENT TERMS

         a.      Payments for services performed under this Agreement are due
                 and payable promptly at net thirty (30) days after date of
                 invoice, which shall not pre-date the date of shipment as
                 defined in paragraph 3e above.

         b.      PATHLIGHT shall provide an irrevocable standby letter of credit
                 or other security for receivable amounts outstanding and
                 inventory liability in excess of its credit limit which may be
                 drawn upon in the event of payment delinquency.

         c.       If PATHLIGHT becomes delinquent in payments to XeTel, XeTel
                  may do the following after notifying PATHLIGHT:

                  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

                  ii.      Withhold shipment of products/services until all of
                           PATHLIGHT's obligations have been brought current.
                           PATHLIGHT 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,
                           PATHLIGHT is not relieved of any obligations
                           hereunder; and/or

                  iii.     Pursue legal remedies to collect the delinquent
                           payments; and/or

                  iv.      Change credit terms.

         d.       PATHLIGHT agrees to verbally review Pathlight's quarterly
                  financial statements with XeTel.

         e.      XeTel agrees to review Pathlight's credit terms quarterly.

5.       COORDINATION. Each party shall designate a Coordinator to represent
         that party in the implementation of this Agreement. PATHLIGHT has
         identified Bruce Fabens, Director of Manufacturing, as its
         Coordinator, and XeTel has identified Pete Casarez, Program Manager, as
         its Coordinator. Either party may change its Coordinator by written
         notice to the other party.

6.       ENGINEERING CHANGE ORDERS. PATHLIGHT may initiate Engineering Change
         Orders (ECOs); so long as the following procedures are followed:

         a.       PATHLIGHT 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 PATHLIGHT to enable PATHLIGHT to issue a
                  Purchase Order for the charges prior

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                  to implementation. In addition, XeTel will charge $150 for
                  each ECO implementation for design related changes.

         c.       Emergency ECOs will be implemented immediately at PATHLIGHT's
                  request and PATHLIGHT will be liable for such costs pertaining
                  to the emergency ECO.

7.       PRICING

         a.       All XeTel pricing for a particular product/service will be
                  based on Purchase Order quantities released for the applicable
                  quarter plus nine (9) month forecast provided by PATHLIGHT.
                  The Purchase Order(s) and forecast should include a
                  description of the product/service to be purchased, quantity,
                  and estimated delivery dates.

         b.       In order for Pathlight and XeTel to remain competitive in the
                  market place, Pathlight and XeTel agree to conduct periodic
                  (not less than quarterly) cost/price reviews throughout each
                  year. Continual reduction in cost/price will receive on-going
                  focus during this Agreement. XeTel shall negotiate in good
                  faith methods of improved productivity, procurement and
                  processes that can result in on-going cost/price reductions to
                  Pathlight. As business needs warrant, Pathlight may request
                  additional cost/price reductions from XeTel during this
                  Agreement.

         c.       If the actual quantity of products/services ordered for
                  delivery during any twelve (12) month period is lower than the
                  forecasted quantity, PATHLIGHT may be subject to billbacks
                  based upon the volume dependent pricing provided Pathlight.
                  XeTel will make its best effort to mitigate material liability
                  resulting from the volume changes.

         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 PATHLIGHT 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 changes set out in Paragraphs 8 and
                  15 of this Agreement.

8.       PURCHASE ORDERS, FORECASTS, RESCHEDULES, AND CANCELLATIONS

         a.       Pathlight will provide a twelve (12) month rolling forecast
                  for the quantities of products that may be required. The
                  forecast will be issued during each month and will forecast
                  Pathlight's projected requirements for products for the next
                  twelve (12) months, which begins on the first day of the next
                  succeeding month.

         b.       XeTel agrees to manufacture, supply and deliver products in
                  accordance with the terms and conditions of this Agreement.
                  XeTel shall manufacture and deliver only such products
                  requested by Pathlight Purchase Orders. XeTel may not consider
                  a Pathlight Purchase Order as "closed completed" until XeTel
                  delivers the full quantity called for in the Purchase Order
                  only for orders where Pathlight has authorized the manufacture
                  of additional like product to account for yield loss and
                  Pathlight shall be responsible for any such excess inventory
                  manufactured. XeTel shall include for consumption any such
                  excess inventory accumulated into subsequent manufacturing
                  build plans.

         c.       Purchase Orders shall be placed a minimum of three (3) months
                  in advance of delivery time. 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
                  (see Appendix A-XeTel Inventory Buy Policy). PATHLIGHT is
                  liable for material purchased, particularly non-cancelable
                  non-returnable (NCNR) and custom/unique items, if there is a
                  schedule reduction or cancellation. PATHLIGHT is also liable
                  for all material purchased due to minimum buy quantities
                  including standard tape and reel quantities.

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                  Commencing July 1, 2000, in the event that Pathlight requests
                  an expedited order (versus shipping or order fulfillment
                  instructions for products in Pathlight's segmented warehouse
                  to complete final system configurations) within the three
                  month window; XETEL WILL CHARGE A FEE OF $40 PER EXPEDITED BOM
                  LINE ITEM, NOT TO EXCEED $1500 EXPEDITE FEE. Any such request
                  will be accompanied by a purchase order for XeTel to initiate
                  this process. After receipt of the purchase order covering the
                  expedite charge, XeTel will make its best effort to meet
                  Pathlight's requested delivery date and will notify Pathlight
                  within three (3) business days of its ability to meet such a
                  requested delivery date including available capacity. Such
                  charge shall apply independent of XeTel's ability to meet the
                  expedited delivery date, except where delivery is missed
                  solely for XeTel's manufacturing performance using standard
                  manufacturing lead times.

                  XeTel agrees to supply a material shortage report as necessary
                  and the following inventory reports on a monthly basis:

                  On-hand inventory
                     - On order inventory
                     - Excess to 5 weeks demand
                     - Total excess to demand
                     - Obsolete inventory (no demand)
                     - Component Supply-Demand Profile (as required)

                  XeTel agrees to provide other mutually agreed upon standard
                  informational reports set forth in Appendix E.

         d.       XeTel agrees to promptly respond to Pathlight's Purchase
                  Orders no later than two (2) business days after receipt

         e.       The Purchase Order pack quantity is a single unit and may be
                  ordered in multiples of one.

         f.       PATHLIGHT may reschedule deliveries on orders that are due
                  thirty (30) days or more from the date such change notice is
                  provided to XeTel provided that:

                  i. If such reschedule of delivery represents a delay in
                  shipment, the reschedule cannot be for more than ninety (90)
                  days from the original delivery date. PATHLIGHT agrees to
                  provide XeTel an inventory prepayment, net of any previous
                  unremitted prepayments, BY THE FIFTEENTH DAY OF EACH MONTH
                  EQUAL TO THE AMOUNT BY WHICH ON-HAND INVENTORY ON THE LAST DAY
                  OF EACH FISCAL MONTH EXCEEDS THE MATERIAL VALUE FOR ORDERS TO
                  BE PRODUCED IN THE SUBSEQUENT MONTH.(see the Inventory
                  Prepayment Timeline Example, detailed in Appendix B). XeTel
                  agrees to repay Pathlight's prepaid amounts BY THE FIFTEENTH
                  OF THE MONTH TO THE EXTENT ON-HAND INVENTORY IS BALANCED WITH
                  PRODUCTION REQUIREMENTS (see the Inventory Prepayment Timeline
                  Example, detailed in Appendix B). Pathlight agrees to commence
                  inventory prepayments due to reschedules or cancellations 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, at Pathlight's expense, carry out
                  all reasonable actions necessary to minimize Pathlight's
                  inventory liability including, as allowed by XeTel's
                  suppliers, rescheduling, returning and/or restocking inventory
                  to coincide with the new schedule.

                  ii. There are no more than a maximum of three reschedules
                  implemented per purchase order and the new delivery cannot be,
                  in any case, later than ninety (90) days from the original
                  delivery date stated on the purchase order. Any orders
                  rescheduled for more than ninety (90) days will be considered
                  a cancellation and the terms in Paragraph 8g will apply. If a
                  reschedule represents an acceleration or increase, XeTel will
                  make its best effort to meet such request, subject 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

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                  meet PATHLIGHT's request will be the liability of PATHLIGHT.
                  All cost impacts and material availability issues will be
                  reviewed and agreed upon with PATHLIGHT prior to XeTel
                  incurring any such costs. PATHLIGHT will issue a Purchase
                  Order for any such charges prior to XeTel's implementation.

         g.       PATHLIGHT may cancel any order scheduled for delivery more
                  than ninety (90) days from the date such cancellation notice
                  is given to XeTel, however PATHLIGHT is liable to XeTel for
                  all material acquired plus handling charges for the cancelled
                  product. However, XeTel will make its best effort to mitigate
                  such liability. Prior to Pathlight's payment, Pathlight may
                  audit XeTel's records at a reasonable time or require XeTel to
                  provide reasonable documentation and invoices to substantiate
                  any and all charges to Pathlight under this section. Payment
                  by Pathlight for the amount pursuant to this section will be
                  made in accordance with the terms and conditions of this
                  Agreement.

         h.       XeTel will provide a "Delivery Increase and Acceleration Plan
                  Proposal" forty-five days after Pathlight's request, including
                  all related expenses, to Pathlight, that would allow an
                  assured supply volume increase (Upflex) to Pathlight at an
                  increasing monthly rate over a three (3) month period, from
                  the date of request, to a target of plus 25% to 50% volume of
                  the then current schedule. If accepted by Pathlight and
                  implemented by XeTel, this proposal will be signed by both
                  parties and added as Appendix C "Delivery Increase and
                  Acceleration Plan" of this Agreement.

9.       APPROVED VENDORS LIST. XeTel will follow PATHLIGHT's Approved Vendor
         List (AVL) for all component parts purchased on behalf of PATHLIGHT.
         PATHLIGHT's AVL must be provided to XeTel in writing prior to any
         purchase being made and such AVL should be updated by PATHLIGHT monthly
         if there have been any changes to Pathlight's AVL. In the event that
         XeTel offers alternatives to PATHLIGHT's AVL, the alternative must be
         approved in writing by PATHLIGHT prior to beginning any production at
         XeTel's facility on behalf of PATHLIGHT.

10.      RELIANCE ON DESIGN(S). PATHLIGHT acknowledges and recognizes that XeTel
         must rely on the design that PATHLIGHT furnishes to XeTel to
         manufacture the PATHLIGHT product, therefore if the product is
         defective due to the inaccuracy of PATHLIGHT design then PATHLIGHT
         agrees that XeTel shall be paid its original contracted
         price for the product that is defective due to the PATHLIGHT design
         error.

11.      WARRANTY

         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 products/services delivered under this
                  Agreement to be free from defects within the limits of the
                  test provisions as stated below:

                 (i)      All products delivered will conform to the XeTel
                          Workmanship Standards (IPC-610A Class II) for a period
                          of fifteen (15) months from the date of invoice. For
                          printed circuit board assemblies, in-circuit test is
                          the minimum electrical test required by XeTel.

                 (ii)     XeTel agrees to extend to Pathlight the same warranty
                          coverage as that stipulated by the Original Equipment
                          Manufactures (OEMs) on all materials used in the
                          manufacture of products for Pathlight.

         b.       This warranty does not apply to material which becomes
                  defective due to PATHLIGHT's alteration or repair or to
                  material which is subjected to misuse, negligence or stress
                  due to the electrical circuit/system design or malfunction.

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         c.       Defective goods 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 as provided for in this
                  paragraph 11. Goods returned after this period will be
                  repaired or replaced for a charge to be negotiated. This
                  section sets out PATHLIGHT's sole remedies for any defect in
                  the goods. XeTel and PATHLIGHT must mutually agree if a debit
                  can be taken against product returned by PATHLIGHT more than
                  30 days after Pathlight's original receipt of the product. For
                  products returned by Pathlight within 30 days of the original
                  shipment by XeTel, Pathlight, to only delay payment of the
                  original invoice, shall issue a debit memo and XeTel, to only
                  delay payment of the original invoice, shall issue to
                  Pathlight a credit for the full amount invoiced by XeTel. Upon
                  completion of the warranty repair, XeTel shall re-invoice
                  Pathlight upon XeTel's shipment of the repaired or replacement
                  products to only restart payment timing. In any event
                  Pathlight applies a debit memo and XeTel issues a credit to
                  delay payment of an original invoice, Pathlight remains
                  responsible for payment of any returned product, once
                  repaired, and title to such product shall at all times remain
                  with Pathlight.

         d.       The foregoing warranties are not transferable and may not be
                  relied upon or enforced by any person other than PATHLIGHT.

         e.       XeTel agrees to extend a limited warranty to cover "Epidemic
                  Defects" for a period of two (2) years beyond the end of the
                  standard fifteen (15) month warranty period stated above
                  provided that the product(s) to be returned meets the
                  following criteria:

                  (i) A sample of the specific product must regularly pass
                  ongoing accelerated life-cycle tests, stress testing, ICT,
                  functional test and other tests as agreed to by XeTel, in
                  writing, and paid for by Pathlight.

                  (ii) Product(s) covered under the standard fifteen (15) month
                  warranty that malfunction or fail solely due to workmanship
                  defects that do not conform to the IPC-610A Class II
                  Workmanship Standards will be measured and recorded by
                  Pathlight and verified by XeTel. If the recorded defect rate
                  meets or exceeds 4% for the same exact defect due to
                  workmanship on product(s) produced in a given quarter (the
                  first quarter runs from April 1, 1999 through June 30, 1999,
                  the second quarter runs from July 1, 1999 through September
                  30, 1999, etc.) then XeTel agrees to repair or replace at no
                  charge to Pathlight any product(s) manufactured in that same
                  quarter that malfunctions or fails due to the exact same
                  defect for a period not to exceed two (2) years beyond the end
                  of the standard fifteen (15) month warranty period. XeTel will
                  also conduct a thorough investigation into failure root cause
                  and with Pathlight's concurrence, implement corrective action.

                  (iii) Not withstanding the above, XeTel shall not be liable
                  for other failure mechanisms and factors including, but not
                  limited to, component defects, printed circuit board defects,
                  product upgrades, design or other factors or failure
                  mechanisms.

                  (iv) Any and all product recalled and returned to XeTel due to
                  Epidemic Defects solely from XeTel's assembly workmanship
                  shall be treated as consigned inventory. Consequently, XeTel
                  will not issue a credit to Pathlight for product returned for
                  purposes defined in this section.

                  (v) In the event an epidemic failure solely from XeTel's
                  assembly workmanship is not found, XeTel shall be compensated
                  for all actual and reasonable costs associated in item (ii)
                  above.


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12.      QUALITY AND WORKMANSHIP. All work performed by XeTel for PATHLIGHT's
         product shall conform to IPC-610A Class II, or as per other mutually
         written agreed upon standards provided by Pathlight. XeTel agrees to
         the Shipped Product Quality Levels (SPQL) for the initial products to
         be provided to PATHLIGHT by XeTel as indicated below:

         Product Description  Allowable SPQL
         -------------------  --------------
         1FC-4DS & 2FC-4DS    5000 ppm

         The SPQL for additional products will be agreed between PATHLIGHT and
         XeTel and reflected in updates to Appendix D.

13.      RETURN MATERIAL AUTHORIZATION. If product is found to be defective per
         this Agreement, PATHLIGHT will notify XeTel and XeTel will provide a
         Return Material Authorization (RMA) number prior to PATHLIGHT returning
         the product. XeTel will make all reasonable efforts to provide an RMA
         number within twenty four (24) hours. XeTel agrees to conduct root
         cause analysis and provide corrective action for all defective products
         as defined in the XeTel Corrective Action Procedure XOP0000041. XeTel
         agrees to supply Pathlight with a Corrective Action number per
         XOP0000041 within 24 hours following a request for corrective action.

14.      PATHLIGHT REPRESENTATIONS, WARRANTIES, AND INDEMNIFICATION. PATHLIGHT
         hereby represents and warrants, and also acknowledges that XeTel is
         relying on such representations and warranties, that the design(s) for
         PATHLIGHT's product(s) which PATHLIGHT furnished to XeTel is the
         original creation of PATHLIGHT or PATHLIGHT 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. PATHLIGHT 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.

15.      TERMINATION.

         a.       After an initial period of twelve (12) months, either party
                  may terminate by written notice this Agreement for convenience
                  with one hundred twenty (120) days notice.

         b.       Either party may terminate by written notice this Agreement
                  for cause if i. any material or unreasonable default and/or
                  unreasonable breech by the other party remains uncured
                  for more than thirty (30) days after receipt of such notice,
                  during this 30 day period this agreement shall remain in
                  force, or ii. if the other party files or has filed against it
                  any bankruptcy, insolvency or receivership proceeding and any
                  such petition has not been withdrawn or dismissed within 60
                  days, during this 60 day period this agreement shall remain in
                  force only if Pathlight's liabilities to XeTel are paid when
                  due and it has been agreed by any and all creditors that any
                  such payments to XeTel are not preferred payments. 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, PATHLIGHT shall be liable for: 1)
                  direct cost of scheduled work-in-process for PATHLIGHT, 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 PATHLIGHT, and 5) labor costs expended in procuring
                  (including rescheduling and/or cancellation), handling
                  (including internal restocking), preparing and/or processing
                  material associated with PATHLIGHT's products/services. XeTel
                  will pay for packaging expenses and PATHLIGHT 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.
                  Pathlight's "Equipment" shall include all tooling and
                  equipment directly provided to XeTel by Pathlight, and all
                  tooling manufactured and/or acquired by XeTel in support of
                  services to be provided by XeTel to Pathlight (including but
                  not limited to the ICT tooling and software) that has been
                  invoiced to and paid for by Pathlight.


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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.

                  Pathlight and XeTel shall not, without first obtaining the
                  written consent of the other party, publicize or otherwise
                  disclose the fact that the parties have furnished or
                  contracted to furnish the work to be performed specified
                  herein, or the terms, conditions and subject matter of this
                  Agreement, except as may be required to perform the
                  requirements of this Agreement or by law or government rule or
                  regulation. If either party is compelled to make a disclosure
                  due to government rule or regulation, such disclosure shall be
                  limited to the extent required and the party shall have an
                  opportunity to review the information prior to disclosure.
                  Notwithstanding the foregoing, such review shall not make the
                  reviewing party responsible for the content of the disclosure.
                  XeTel may reference Pathlight as a customer however may not
                  disclose the existence and terms of this Agreement without
                  first receiving written permission from Pathlight.

         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.

         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 TO PATHLIGHT
         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.




         IN NO EVENT SHALL PATHLIGHT 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 PATHLIGHT 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. XeTel agrees to perform
         its obligations, as soon as practical, after the conditions causing the
         delay and/or failure have subsided.

19.      RELATIONSHIP OF PARTIES. XeTel shall be deemed to be an independent
         contractor of PATHLIGHT and therefore not an agent or employee of
         PATHLIGHT. PATHLIGHT acknowledges that XeTel may from time to time use
         additional subcontractors to complete the product and hereby gives
         approval to XeTel to use such

<PAGE>   9
other subcontractors so long as XeTel first advises Pathlight of the intention
to use any such additional subcontractors, and provides Pathlight two weeks to
accept or reject any such proposed additional subcontractors. Pathlight's
approval of any such additional subcontractors shall not be unreasonably
withheld. XeTel is an independent contractor and is not an agent of Pathlight
for any purpose whatsoever.

         XeTel is solely responsible for the acts of its employees and agents,
         including any acts or omissions, and shall hold harmless, defend and
         indemnify Pathlight against all claims based on acts of its employees
         or agents.

         Pathlight is an independent contractor and is not an agent of XeTel
         for any purpose whatsoever. Pathlight is solely responsible for the
         acts of its employees and agents, including any acts or omissions, and
         shall hold harmless, defend and indemnify XeTel against all claims
         based on acts of its employees or agents.

20.      INSURANCE. XeTel shall maintain comprehensive general liability
         insurance for claims for damages because of bodily injury or death and
         property damage caused by or arising out of acts or omissions of its
         employees.

21.      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. The waiver by either
         party of any instance of the other party's noncompliance with any
         obligation or responsibility herein shall not be deemed a waiver of
         subsequent instances or of either party's remedies for such
         noncompliance.

22.      TAXES. PATHLIGHT shall be responsible for and pay all taxes or other
         similar transaction costs imposed on XeTel by any jurisdiction as a
         result of or in connection with the services performed or products
         provided by XeTel hereunder excluding, however, XeTel's taxes based
         upon net income, capital or net worth of XeTel.

23.      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.

24.      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.

25.      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 PATHLIGHT'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 PATHLIGHT 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 from PATHLIGHT
                  will not be an acceptance thereof or a waiver of the terms
                  hereof.

<PAGE>   10

26.      NON-ASSIGNMENT. This Agreement may not be assigned without prior
         written Agreement and approval of the other party. Both parties agree
         not to unreasonably withhold such assignment. The sale by Pathlight of
         all or substantially all of its assets or any form of merger shall not
         be considered such an assignment however, XeTel reserves the right to
         approve the credit worthiness of the acquiring company and to modify
         credit terms prior to commencement of the transaction; such approval
         and credit terms shall be made in writing.

27.      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.

28.      YEAR 2000 READINESS. XeTel shall take reasonable steps to ensure that
         all mission critical applications and operating environments used by
         XeTel will be in readiness by the year 2000. XeTel shall take
         reasonable steps to ensure its suppliers will be able to perform their
         material obligations beyond the year 2000.

         There can be no assurance that the systems of other companies on which
         XeTel's systems rely will be converted on a timely basis or that such
         failure by another company to convert would not have an adverse
         effect on XeTel's systems.

29.      NOTICES. All required or permitted notices to be given under this
         Agreement will be in writing and deemed received: 1) three days after
         mailing if sent by certified mail, return receipt requested, or 2) on
         the date confirmation is received if sent via facsimile transmittal
         to the party at the address provided below and followed by certified
         mail or personal delivery 3) on the date received when sent via Federal
         Express or other overnight carrier with signed receipt requested.



The parties execute this Agreement to be effective on the later of the dates
referenced below.


    XeTel Corporation                            Pathlight Technology, Inc.


By: /s/ RICHARD CHILINSKI                    By: /s/ JAMES H. WATSON, JR.
    ---------------------------                  ---------------------------

Name: Richard Chilinski                      Name: James H. Watson, Jr.
Title: Senior Vice President & CFO           Title: C.O.O. & C.F.O.

    XeTel Corporation                        Pathlight Technology, Inc.
    2105 Gracy Farms Lane                    9 Brown Road
    Austin, TX 78758                         Ithaca, NY 14850-1255


Date:  5/12/00                               Date:  4/27/00
      ---------                                    ---------

<PAGE>   11

                                   APPENDIX A

                          XETEL'S INVENTORY BUY POLICY

Based on this Agreement, XeTel will procure material intended for use in
Pathlight's products. This procurement activity is designed to support product
scheduled in compliance with Pathlight's Purchase Orders and forecast delivered
to XeTel in accordance with this Agreement. XeTel's inventory buy policy is
to only order components for which Pathlight is liable and thus, XeTel will not
purchase any speculative inventory. The methodologies listed below outline
XeTel's overall procurement patterns; however, on individual parts this may
vary depending on the terms and conditions, as well as packaging constraints,
offered by the supplier and/or Original Equipment Manufacturer (OEM) (examples:
minimum buy quantities and tape & reel sizes).

XeTel utilizes an A, B, C procurement strategy whereby the "A" items represent
approximately eighty percent (80%) of the material value of the product, "B"
items represent approximately fifteen percent (15%) of the material value of
the product and "C" items represent five percent (5%) of the material value of
the product. All material items are profiled in XeTel's MRP system and scheduled
for delivery as stated below:

<TABLE>
<CAPTION>
MATERIAL       NUMBER OF DAYS PRIOR     NUMBER OF DAYS PRIOR
CLASS          TO BUILD DATE            TO PRODUCT SHIPMENT DATE
--------       --------------------     ------------------------
<S>            <C>                      <C>
   A                 5                            20
   B                10                            25
   C               10-20                        25-40
</TABLE>

Additionally, XeTel will lot-size "B" and "C" items to minimize procurement and
handling activity. The "A" items will not be lot-sized except as required by the
supplier. Supplier and OEM delivery and quality history will also be taken into
account when profiling components.

XeTel will receive permission from Pathlight prior to purchasing any component
which has a cost higher than that defined in the applicable product(s) quote.
This Purchase Price Variance (PPV) can be paid, by Pathlight, in a lump sum or
amortized into an adjusted sell price for the associated product(s).

<PAGE>   12
                                   APPENDIX B

                     INVENTORY PREPAYMENT TIMELINE EXAMPLE

<TABLE>
<CAPTION>
                      FEBRUARY                       MARCH                           APRIL
            ---------------------------- --------------------------------   ------------------------
              WK1    WK2    WK3    WK4    WK1    WK2    WK3    WK4    WK5    WK1    WK2    WK3   WK4
<S>         <C>     <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>   <C>
NORMAL       Parts   (A) 30 days
RECEIPT &    rcvd                 Parts
SHIP CYCLE   $100K                ship           Net 30

NORMAL PAY                                XeTel              Customer
CYCLE                                     pays                pays
                                         vendors              XeTel
-----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                      FEBRUARY                         MARCH                              APRIL
            ----------------------------   --------------------------------   -----------------------------
              WK1    WK2    WK3    WK4      WK1    WK2    WK3    WK4    WK5    WK1    WK2    WK3   WK4
<S>         <C>     <C>    <C>    <C>      <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>   <C>
CUSTOMER                                                                                          New
SCHEDULES                        Old ship                                                         scheduled
SHIP DATE                        date                                                             ship date

PREPAY                                                     (C)   $100K
SCHEDULE                     (B) Excess Inv.                   prepayment
                                 = $100K                          due

                                          Look at demand within 5 week window
                                          Demand is zero in this example
-----------------------------------------------------------------------------------------------------
</TABLE>

(A)      "A" components, 80% of inventory, are received 20 days prior to ship
         date.

(B)      XeTel calculates excess by comparing on-hand inventory to 35 day
         (5 week) outlook on demand. Five week outlook report is available
         every Monday morning.

(C)      Customer prepay covers cash outlay to vendors due to reschedule.

NOTE: XeTel will credit prepaid dollars toward invoice due when shipments resume





<PAGE>   13

                                   APPENDIX C
                    DELIVERY INCREASE AND ACCELERATION PLAN
<PAGE>   14


                                   APPENDIX D
                                SPQL COMMITMENTS
<PAGE>   15

                                   APPENDIX E
                          OTHER INFORMATIONAL REPORTS



Percent Lots Rejected
Scrap rates via Fourth Shift MPR
Process changes via Manufacturing Build Packets
Corrective Action and Failure Analysis via CAR System Report
ICT first and second pass yield
Board Level Functional Test (FCT) Yield statistics
System Level Functional Test (FCT) Yield statistics