EXHIBIT 10.24
Confidential materials omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment. Asterisks
denote such omissions.
GOLF CART SEPARATOR SUPPLY CONTRACT
This Agreement is entered into this ___ day of July, 2001, by and between
Daramic, Inc. and its Affiliates ("Daramic") and Exide Corporation and its
Affiliates ("Exide").
1. Definitions
As used herein the following terms shall have the following meanings:
"Affiliates" shall mean any Person in which either Daramic or Exide,
directly or indirectly, owns or controls fifty percent (50%) or more of the
ownership indicia, as well as any Person which, directly or indirectly, owns 50%
or more of, or otherwise controls the management decisions of Exide or Daramic.
"▇▇ ▇▇▇▇▇▇ Agreement" shall mean the Automotive and Industrial Supply
Contract between Exide and Daramic entered into this same date.
"Industrial Price Index" shall mean the Industrial Price Index
published by the Journal of Commerce, or a reasonable substitute should that
volume cease to be published.
"North American Supply Agreement" shall mean the North American Supply
Agreement of December 15, 1999 between Exide and Daramic, as amended on this
date.
"Person" shall mean any individual, partnership, corporation, trust or
any other legal entity or any government or political subdivision.
"Prices" shall mean the prices for Golf Cart Separators set forth in
Exhibit A attached hereto, as adjusted from time to time as set forth in Section
3.2 hereof.
"Golf Cart Separator" or "Separator" shall mean any polymer based
battery separator used by Exide in the production of golf cart batteries.
"Specifications" shall mean the specifications for the Golf Cart
Separators set forth in Exhibit B attached hereto which may be amended from time
to time by mutual written agreement of the parties, provided that Exide shall
have the final say as to the acceptability of any modified Specification.
"Term" shall mean July ___, 2001 through December 31, 2009.
2. Golf Cart Separators
The intent of this Agreement is that Daramic shall have the option to
supply [*****] Golf Cart Separators on a worldwide basis, subject to any
specific Exide customer requirement. When and if Daramic or any of its
Affiliates develops (or represents) and qualifies a Golf Cart Separator of equal
or superior performance to
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the battery separators currently being used by Exide to produce batteries for
golf carts, then within 90 days of said qualification, Exide agrees to purchase
[*****] for Golf Cart Separators from Daramic pursuant to this Agreement.
However, if a specific customer demands the use of a non-Daramic product, then
Exide can use that product [*****]. The parties will use reasonable, good faith
efforts to qualify Daramic's existing polymer based golf cart battery separator
products for use by Exide as soon as reasonably practicable, provided that
Daramic shall not be required to expend any additional capital to qualify its
existing products for use by Exide. However, if from time to time during the
Term of this Agreement Daramic chooses to do so, to the extent that Daramic
incurs costs, expenses or capital expenditures to modify or increase the
capacity of its production assets used to manufacture Golf Cart Separators to be
supplied under this Agreement, Exide will reimburse Daramic for such costs,
subject to a maximum total cost to Exide of [*****] for all such costs, expenses
or capital expenditures during the Term of this Agreement. Exide's obligation to
reimburse this amount only applies to the extent that their annual purchases of
Golf Cart Separators under this Agreement exceed [*****], or where it is
desirable for Daramic to modify its existing equipment to meet a specification
or requirement of Exide.
3. Prices
3.1 Initial Prices for the initial Golf Cart Separators to be supplied
pursuant to this Agreement shall be as set forth on Exhibit A attached hereto.
3.2 Subject to the other terms of this Agreement, Prices shall remain firm
until January 1, 2002 and are subject to annual revisions thereafter by Daramic
to reflect any Substantial Change (as defined below) in Daramic's cost to
manufacture Golf Cart Separators. These prices are based on [*****]
(collectively, "Manufacturing Costs"). In the event there is a Substantial
Change in Daramic's Manufacturing Costs, Daramic will adjust the Price for Golf
Cart Separators from time to time while this Agreement is in effect (but not
more often than once per year for each type of Golf Cart Separator) to reflect
any such Substantial Change provided that the cumulative effect of any such
Price adjustments shall not exceed the cumulative change in the Industrial Price
Index from May 1, 2001. If an adjustment in Price for a type of Golf Cart
Separator is implemented by Daramic due to a Substantial Change, Daramic shall:
(i) provide Exide at least 90 days written notice prior to the effective date of
such change and (ii) make available to Exide documentation to substantiate the
Substantial Change. The term "Substantial Change" shall mean any change (upward
or downward) exceeding [*****] of Daramic's then-current Manufacturing Costs for
any type of Golf Cart Separator. Prices will also be adjusted based on cost
reductions achieved as contemplated by Sections 5 and 6.1 below.
3.3 During the term of this Agreement, and for a period of two (2) years
thereafter, Daramic shall keep accurate and complete records of all data
necessary for the computation of its Manufacturing Costs. From time to time,
upon reasonable notice to Daramic, Exide's designated independent public
accountants shall have the right at reasonable times during normal business
hours to examine the records of Daramic applicable to the calculation of and for
the sole purpose of verifying the Prices charged Exide hereunder; provided,
however, that before obtaining access
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to and examining such records, Exide shall cause its independent public
accountants to execute and deliver a confidentiality agreement in form and
substance reasonably acceptable to Daramic regarding Daramic's records and the
information contained therein. If the records show that Daramic has failed to
adjust the Prices in accordance with Section 3.2 and such adjustment would have
reduced the Prices paid by Exide during the applicable period by more than
[*****], Daramic shall pay all costs associated with the examination of the
records. Otherwise, Exide shall bear all costs of such examination. If Daramic
disputes the calculation of any such adjustment by Exide's independent public
accountants, the parties shall agree on the appointment of an independent third
party arbitrator to resolve such dispute. If such arbitrator determines that the
calculation by Exide's independent public accountants of the required Price
adjustment is accurate, Daramic shall pay all costs associated with the work
performed by the third party arbitrator. If such arbitrator determines that
Daramic has complied with Section 3.2, Exide shall pay all costs associated with
the work performed by the third party arbitrator. Otherwise, the arbitrator
shall determine how such costs shall be allocated between Daramic and Exide.
Daramic will promptly refund to Exide any overpayment made by Exide plus
liquidated damages in an amount equal to [*****] of such overpayment. The
parties agree that the amount of liquidated damages set forth in the immediately
preceding sentence is a fair and appropriate estimation of the damages caused to
Exide by Daramic's failure to adjust the Prices in accordance with Section 3.2,
and Daramic agrees not to contest or object to Exide's right to such amount of
liquidated damages. Conversely, if Daramic prevails, then in addition to its
fees and costs, Exide shall also pay Daramic liquidated damages of [*****] of
the alleged overcharge amount as compensation for the business distraction
incurred by Daramic.
3.4 [*****]
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4. Payment Terms
Invoices are to be issued by Daramic upon shipment and are payable [*****]
days after date of invoice. Any amounts due by Exide to Daramic, which amounts
are not paid when due, other than amounts disputed by Exide in good faith, shall
accrue interest at a rate of [*****] per month, or portion thereof, from the due
date until the date paid. All invoices must reference applicable Exide purchase
order/contract release numbers and shall be sent to:
Exide Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Accounts Payable
5. Cost Reductions
Daramic and Exide will use Customer-Supplier teams as a vehicle to identify
and implement cost reduction activities by Daramic associated with Golf Cart
Separators. Daramic will identify the implementation costs, including capital,
and cost savings associated with any proposed project. Implementation and the
timing for implementation of each project will be mutually agreed upon by the
parties. Price changes based on such projects will reflect a [*****] sharing of
the cost savings actually accomplished based on each party's inputs and risks.
Both parties agree that if any capital expense required to implement a
particular cost reduction or production expansion project does not support
agreed upon payback expectations, then the project will not be initiated.
6. Research & Development
6.1 The parties acknowledge that Daramic is a technology leader in the
battery separator industry, and Daramic agrees to use commercially reasonable
efforts to keep abreast of and promptly implement all technological
improvements, enhancements and/or advances in the manufacture of Golf Cart
Separators. The parties intend to [*****] in all benefits (including cost
savings) achieved through the efforts of Daramic or of both parties.
6.2 [*****]
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7. Confidentiality
During this Agreement and for a period of ten years subsequent to the
termination or expiration of this Agreement (regardless of the cause of
termination), each party shall hold as confidential and shall not disclose,
directly or indirectly, to third parties nor use (other than in the performance
of this Agreement) for its benefit or for the benefit of third parties
information disclosed by or received from the other party and pertaining to its
business affairs, including, without limitation, information disclosed by Exide
regarding Separators supplied by third parties. It is understood that this
obligation of confidentiality and non-use shall not apply to any information
known to either party which (i) is or becomes publicly known through no fault of
its own, (ii) is disclosed to the party by a third party entitled to disclose
such information, (iii) was previously known to the other party or (iv) is
independently developed by the other party without reference to any of the other
party's confidential information.
8. Forecasts
By October 1 of each calendar year (and for the first calendar year, within
30 days of Daramic qualifying a Golf Cart Separator for use by Exide), Exide
shall provide Daramic with a written annual estimate of its Golf Cart Separator
requirements for the next succeeding calendar year. The estimate shall indicate
Exide's estimated requirements for Golf Cart Separators broken down by type for
each of Exide's locations for that calendar year. Commencing July 1, 2001, Exide
shall also provide Daramic with quarterly delivery forecasts for Golf Cart
Separators broken down by type for each of Exide's locations with appropriate
lead times. During the Term of this Agreement, Exide shall update such forecasts
on a rolling basis at least once every month.
9. Delivery
9.1 Delivery of Golf Cart Separators shall be [*****], unless alternative
terms are agreed to by the parties in writing. Daramic reserves the right to
supply Separators from an alternate manufacturing facility and will bear any
additional delivery costs (or pass on to Exide any additional savings) resulting
from such a switch. Title to and risk of loss of Separators shall pass to Exide
upon delivery to the carrier, notwithstanding any prepayment or allowance of
freight by Daramic. Exide shall have the right to choose the mode of delivery
and carrier. It shall be Exide's responsibility to arrange for any insurance it
desires for the shipped Separators.
9.2 Provided that Exide's actual orders submitted are within ten percent
(10%) above or below the quarterly forecasts provided by Exide pursuant to
Section 8, Daramic undertakes to deliver ordered Separators no later than
fourteen (14) business days after the mutually agreed delivery date. The parties
agree to work together in good faith to agree on a mutually acceptable delivery
date that, for standard Separators, will be no less than seven (7) days and no
more than fourteen (14) days after submission of a firm order by Exide. For
non-standard Separators or unusually large orders, the parties will work
together in good faith to agree on a mutually
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acceptable delivery date that is feasible based on the extended lead times
needed for these specialized orders. If Daramic is unable to deliver Separators
ordered by Exide within fourteen (14) business days after the mutually agreed
delivery date, then Daramic will within 24 hours provide Exide with notice of
its inability to do so. The volume of Separators that Daramic fails to ship in
the time allowed under this section 9.2 will count in calculation of the GCS
Credit pursuant to section 2.6 of the North American Supply Agreement. If
Daramic notifies Exide of an ongoing inability to meet the timely delivery
requirements set forth in this section 9.2, then Exide can make short term
arrangements (not to exceed 30 days) to obtain the necessary Separators from a
third party. However, such purchases shall not count toward calculation of the
GCS Credit.
10. Specifications
Initial product Specifications are described on Exhibit B. Specifications
may not be modified, superseded or otherwise altered except by written agreement
signed by authorized representatives of Exide, provided that Daramic shall not
be required to supply any product for which Exide requires a modified
Specification, unless Daramic has approved that Specification, which approval is
not to be unreasonably withheld.
11. Warranties, Remedies and Limitations
11.1 Daramic warrants that the Golf Cart Separators used in the
construction of golf cart batteries hereunder do not or will not infringe any
patent of the country of original manufacture by Daramic. Daramic shall defend
and hold Exide harmless from and against any and all claims, liabilities and
costs (including reasonable attorneys' fees) incurred by Exide as a result of
any breach of this non-infringement warranty. Daramic's liability under this
warranty is conditioned upon (i) Exide giving prompt written notice of any claim
of patent infringements made against Exide, (ii) Exide making available to
Daramic all information available to Exide in respect of the claim, and (iii)
Exide's granting Daramic control of its settlement and/or litigation, provided,
however, that Daramic shall not settle or compromise any claim in a matter that
affects the rights or interests of Exide without Exide's prior written consent
and further provided that if Exide's consent is not granted, then Daramic's
obligation to defend and hold Exide harmless shall cease and be of no further
force and effect as it relates to the particular claim in question. Daramic may
discontinue delivery of Golf Cart Separators if, in Daramic's opinion, their
manufacture would constitute patent infringement. Daramic makes no warranty
against patent infringement resulting from use of Golf Cart Separators in
combination with other materials or in the operation of any process or resulting
from the production of Golf Cart Separators using specifications provided or
required by Exide, and if a claim, suit or action is based thereon, Exide shall
defend, indemnify and hold Daramic harmless therefrom.
11.2 DARAMIC WARRANTS THAT IT WILL PRODUCE THE GOLF CART SEPARATORS IN A
GOOD AND WORKMANLIKE MANNER AND THAT THE GOLF CART SEPARATORS DELIVERED TO EXIDE
WILL CONFORM TO THE SPECIFICATIONS. WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE ARE INCLUDED. DARAMIC ALSO WARRANTS TO EXIDE THAT IT
WILL CONVEY GOOD TITLE TO THE GOLF CART SEPARATORS SOLD AND
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DELIVERED HEREUNDER FREE OF ANY LIENS AND ENCUMBRANCES. DARAMIC HEREBY EXCLUDES
AND DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY SET FORTH IN THIS SECTION
11. THE REMEDIES OF EXIDE FOR ANY BREACH OF WARRANTY SHALL, SUBJECT TO THE OTHER
TERMS OF THIS AGREEMENT, BE THE REPLACEMENT OF THE NONCONFORMING PRODUCT OR, IN
THE SOLE DISCRETION OF EXIDE, REFUND FOR THE PRICE PAID FOR ANY NONCONFORMING
PRODUCT, TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES, INCLUDING, WITHOUT
LIMITATION, SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES. NO AGREEMENT
VARYING OR EXTENDING THE FOREGOING WARRANTIES WILL BE BINDING UPON DARAMIC
UNLESS IN WRITING, SIGNED BY AN OFFICER OF DARAMIC.
12. Force Majeure
Daramic and Exide shall not be liable for failure to make or take, or delay
in making or taking, any delivery due to war, strikes, labor trouble, floods,
fires, shortages or interruption of transportation, unavailability of materials
through no fault of Daramic or Exide or any other cause beyond their respective
control ("Force Majeure Event"), but hey shall make every effort to remove any
such cause of their failure or delay as soon as possible provided that neither
party shall be required under this section to settle strike or labor
controversies. During any period when deliveries are affected by a Force Majeure
Event Daramic shall endeavor to allocate any available Separators among all
buyers in such manner as it reasonably considers fair.
13. Taxes, Duties and Excises
In the absence of satisfactory evidence of exemption supplied to [*****],
all taxes, duties, excises or other charges for which [*****] may be responsible
for collection or payment to any government (national, state or local) upon,
measured by or relating to the importation, exportation, production, or any
phase or part of the storage, sale, transportation and/or use of the Golf Cart
Separators.
14. Notices
Notices, demands and communications hereunder to Exide or to Daramic shall
be deemed to have been duly given if in writing and delivered by overnight
delivery service or sent by registered or certified mail (postage prepaid) or by
facsimile (confirmed by delivery of the notice by mail or overnight delivery
service) as follows:
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If to Daramic:
Daramic, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: 617/273-1112
Attention: General Manager or Director Sales & Marketing
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇
Daramic, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Exide:
Exide Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No:
Attention: Vice President - Purchasing and
Vice President - Manufacturing.
with a copy to:
Exide Corporation
Princeton, New Jersey
Facsimile No.:
Attention: General Counsel
Any party may designate by notice in writing a new address to which any
notice, demand or communication may hereafter be given or sent.
15. Orders
Order releases for Golf Cart Separators will be provided in writing (or if
by telephone subsequently confirmed in writing) by Exide to the respective
Daramic manufacturing plant. Exide may use its standard release or purchase
order form to specify quantity, destination, requested delivery date and, for
f.o.b. sales, desired mode of transportation, of Golf Cart Separators; however,
all terms and conditions of sale shall be as specified in this Agreement and
only amended or supplemented by a written agreement signed by senior officers of
both parties. To the extent inconsistent with the terms of this Agreement, the
terms of sale stated in either
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party's invoice, purchase order, order acknowledgment, or similar document shall
not apply to sales of Golf Cart Separators under this Agreement.
16. Applicable Law and Effect of Partial Invalidity of This Agreement
If any covenant, agreement, term or provision of this Agreement, as from
time to time amended, or the application thereof to any situation or
circumstance, shall be invalid or unenforceable, the remainder of this
Agreement, as from time to time amended, or the application of such covenant,
agreement, term or provision to situations or circumstances other than those as
to which it is invalid or unenforceable, shall not be affected and each other
covenant, agreement, term or provision of this Agreement, as from time to time
amended, shall be valid and enforceable to the fullest extent permitted by
applicable law. This Agreement shall be governed by, under and construed in
accordance with the laws of the State of Delaware (USA) applicable to contracts
entered into and wholly to be performed therein.
17. General
17.1 If Daramic is in breach or violation of any term or condition
contained in this Agreement, and, if within thirty (30) days after Exide has
given written notice thereof, such breach or violation is not cured, then Exide
shall have the right to acquire Separators from any available source in such
quantities as are necessary to meet the current manufacturing requirements of
Exide. Once Daramic is able to cure such breach or violation, Exide shall resume
its purchases from Daramic in accordance with this Agreement.
17.2 This Agreement and the Exhibits hereto set forth the entire Agreement
and understanding of the parties with respect to the transactions contemplated
hereby and supersede all prior agreements or understandings between the parties
with respect to thereto. However, this Agreement does not replace or affect the
▇▇ ▇▇▇▇▇▇ Agreement or the North American Supply Agreement.
17.3 This Agreement is not assignable or transferable by either party
without the prior written consent of the other party. [*****]
17.4 In the event of any conflict between the terms of this document and
those contained in any Exhibits hereto, the terms of this document shall
control.
17.5 This Agreement may be amended, modified, superseded or canceled, and
the terms or conditions hereof may be waived only by a written instrument
executed by authorized
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representatives of Exide and Daramic, or in the case of a waiver by or on behalf
of the party waiving compliance. The failure of either party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by either party of any
condition or breach of any term contained in this Agreement in any one or more
circumstances shall be deemed to be or be construed as further or continuing
waiver of any such condition or breach or a waiver of any other condition or of
any breach of any other term of this Agreement.
17.6 The headings used in this Agreement are for reference only and shall
not in any way affect the meaning or interpretation of this Agreement. This
Agreement may be executed simultaneously in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
17.7 Each party will cause its Affiliates to abide by the terms and
conditions of this Agreement.
17.8 [*****]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and date first above mentioned.
Exide Corporation, for itself, and on behalf of all of its present and future,
direct and indirect, parent, subsidiary, and affiliated entities on a worldwide
basis.
By: [ILLEGIBLE]
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Title:
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Daramic, Inc.
By: [ILLEGIBLE]
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Title:
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