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EXHIBIT 10.21  


Confidential
materials omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. Asterisks denote such omissions. 


 
 

AUTOMOTIVE AND INDUSTRIAL 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. 


        "GCS
Supply Agreement" means the Golf Cart Separator Supply Contract entered into as of the same date between Exide and Daramic. 



        "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 and re-titled on this date
as the "North American, Australian and New Zealand Supply Agreement for Automotive Separators". 


        "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 Qualified Products set forth in Exhibit A attached hereto, as adjusted from time to time as set forth in Section 4 hereof. 


        "Qualified
Products" shall mean Existing Products and Replacement Products. 


        "Separator"
shall mean any battery separator used by Exide for any application whatsoever (other than those products purchased from Daramic pursuant to the North American Supply
Agreement or the GCS Supply Agreement). 


        "Specifications"
shall mean the specifications for the Qualified Products set forth in Exhibit B attached hereto which may be amended from time to time only 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.
	Existing
Products 



        The
intent of this Agreement is that Exide will offer to purchase, and Daramic shall have the option to supply,[*****] Separators on a worldwide basis. To
partially give effect to this intent, effective immediately, Daramic agrees to supply and Exide agrees to purchase [*****] of the products listed on the attached Exhibit "A"
(the "Existing Products"). Prices for the Existing Products are also listed on Exhibit "A." 


	3.
	Replacement
Products 



        For
all Separators that are not listed on Exhibit A, Daramic shall have the option of seeking to develop a comparable product or a suitable replacement for the Separators then
being used by Exide (a "Replacement Product"). [*****] To the extent that Daramic produces or represents a competitive product comparable to, or a suitable replacement for any
Separator then in use by Exide, at a price that is equal to or less than the price then being paid by Exide for such a product, then Daramic may present such Replacement Product to Exide for
qualification. Exide agrees to use its best commercial efforts to fully cooperate and support Daramic's efforts to produce or qualify such a Replacement Product as quickly as possible. Upon
qualification, such Replacement Product shall be added to the list 







 



of
Qualified Products on Exhibit A, and Exide will purchase from Daramic [*****] of said qualification and for the remaining Term of this Agreement. Pricing for such a
Replacement Product will initially be at the level most recently paid by Exide to its primary third party supplier for the product being replaced. However, if such Replacement Product utilizes a
different technology such that the Replacement Product is substantially less costly to produce than the product it replaces, then Daramic will make a fair adjustment in the initial pricing level as
described in Section 6 below. Once the initial Price for a Replacement Product is established, then the price for such a Replacement Product will be subject to change adjustments based on cost
reductions achieved as contemplated by Sections 6 and 7.2 below and on changes in Daramic's Manufacturing Costs pursuant to Section 4.2 below. After initial qualification of a Replacement
Product, Daramic shall only be required to continue to meet prices offered by third parties as described in section 4.4. 


	4.
	Prices 



        4.1   Initial
Prices for Qualified Products supplied pursuant to this Agreement shall be as set forth on Exhibit A attached hereto. 


        4.2   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 Qualified Products, including, without limitation any changes in Daramic's Manufacturing Costs since January 1, 2001.
These prices are based on [*****](collectively, "Manufacturing Costs"). In the event there is a Substantial Change in Daramic's Manufacturing Costs, Daramic will have the right
to make an appropriate adjustment in the Price for Qualified Products from time to time while this Agreement is in effect (but not more often than once per year for each type of Qualified Product) to
reflect any such Substantial Changes. Daramic shall provide Exide at least 90 days written notice prior to the effective date of such change. During this 90 days, Daramic shall consult
with Exide to insure that Daramic's current Prices reflect prevailing economic and market conditions for both Exide and Daramic. If Exide or Daramic believe in good faith that any such Price
adjustment does not reflect prevailing market conditions, then the Parties shall negotiate in good faith the possibility of deferring, retracting or accelerating all or part of the proposed Price
adjustment as the circumstances may merit. Such discussions shall not in any way interfere with or postpone Daramic's proposed effective date for the Price adjustment, except with the mutual consent
of both Parties. Regardless of the prevailing market conditions, such Price adjustments shall always reflect no less than 50% of the increase in the actual change in Daramic's Manufacturing Costs, and
the cumulative effect of any such Price adjustments shall not exceed the cumulative change in the Industrial Price Index from January 1, 2001. If an adjustment in Price for a type of Qualified
Product is implemented by Daramic due to a Substantial Change, Daramic shall 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 Qualified Product. Prices will also be adjusted based on
cost reductions achieved as contemplated by Sections 6 and 7.2 below. 


        4.3   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 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 4.2 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 


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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 4.2, 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 injury caused to Exide by Daramic's failure to adjust the Prices
in accordance with Section 4.2, 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. 


        4.4   [*****]



        4.5   Notwithstanding
the provisions of Sections 4.2, 4.3 and 4.4 the ex-works prices charged to Exide and its Affiliates by Daramic or its Affiliates for
Separators will be no higher than the prices for Separators having substantially similar attributes, standards and qualities offered by Daramic or any of its Affiliates to any other customer
purchasing volumes substantially similar to those volumes purchased by Exide or any of its Affiliates. 


	5.
	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

12600 Deerfield Parkway

Alpharetta, GA 30004

Attention: Accounts Payable 


	6.
	Cost
Reductions 



        Daramic
and Exide will use Customer-Supplier teams as a vehicle to identify and implement cost reduction activities by Daramic associated with Qualified Products. 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. 


	7.
	Research &
Development 



        7.1   Daramic
shall continue to provide Qualified Product and battery testing services to Exide such as are currently provided at its testing laboratories in Owensboro,
Kentucky, and Hamburg, Germany, or at such other laboratory as may be mutually agreed upon by the parties. 


        7.2   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 


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all
technological improvements, enhancements and/or advances in the manufacture of Qualified Products. The parties intend to [*****] in all benefits (including cost savings)
achieved through the efforts of Daramic or of both parties. 


        7.3   [*****]



	8.
	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. 


	9.
	Forecasts 



        By
October 1 of each calendar year (and July 1, 2001 for the first calendar year), Exide shall provide Daramic with a written annual estimate of its Qualified Product
requirements for the next succeeding calendar year. The estimate shall indicate Exide's estimated requirements for Qualified Product 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 Qualified Products 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. 


	10.
	Delivery 



        10.1 Delivery
terms for Qualified Products supplied under this Agreement shall be as follows: 



	a.
	Qualified
Products supplied to any Exide plant in North, South or Central America shall be shipped [*****];



	b.
	Qualified
Products supplied to any Exide plant in the European Community (as of April 1, 2001), plus Norway or Poland, shall be delivered [*****];



	c.
	Qualified
Products shipped to other points shall be supplied [*****].



	

	Daramic
reserves the right to temporarily supply Qualified Products from alternate manufacturing facilities should the need arise to ensure continuity of supply. 






        10.2 Provided
that Exide's actual orders submitted are within ten percent (10%) above or below the quarterly forecasts provided by Exide pursuant to Section 9,
Daramic undertakes to deliver ordered Qualified Products 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 Qualified Products, 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 Qualified Products or unusually large orders, the parties will work together in good faith to agree on a mutually acceptable delivery date that is feasible
based on the extended lead times needed for these specialized orders. If Daramic is unable to deliver Qualified Products 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. Exide can obtain these undelivered quantities of Separators from a third party. If
Daramic notifies Exide of an ongoing inability to meet the timely delivery requirements set forth in this section 10.2, then Exide can make short term arrangements (not to exceed
30 days) to obtain only the 


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affected
volume of Qualified Products from a third party. However, once Daramic is again capable of producing and supplying the required volumes on a timely basis, Exide shall resume its purchases
from Daramic in accordance with this Agreement. 


	11.
	Warranties,
Remedies and Limitations 



        11.1 Daramic
warrants that the Qualified Products used in the construction of lead-acid 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 Qualified Products if, in Daramic's opinion, its manufacture would constitute patent infringement. Daramic makes no warranty against
patent infringement resulting from use of Qualified Products in combination with other materials or in the operation of any process or resulting from the production of Qualified Products 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 QUALIFIED PRODUCTS IN A GOOD AND WORKMANLIKE MANNER AND THAT THE QUALIFIED PRODUCTS 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 QUALIFIED PRODUCTS SOLD AND
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 they 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. 


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	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 Qualified Products. 


	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: 



If
to Daramic:

        Daramic, Inc.

        20 Burlington Mall Road

        Suite 325

        Burlington, MA 01803

        Facsimile No: 617/273-1112

        Attention: General Manager or Director Sales & Marketing

with a copy to: 


        Jerry
Zucker or James G. Boyd

        Daramic, Inc.

        4838 Jenkins Avenue

        North Charleston, SC 29405

        Facsimile: (843) 747-4092

If to Exide: 


        Exide
Corporation

        12600 Deerfield Parkway

        Alpharetta, GA 30004

        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 Qualified Products 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 Qualified Products; 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 party's invoice, purchase order, order acknowledgment, or similar document shall not apply to sales of Qualified Products under this
Agreement. 


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	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 shall be substituted for the "Agreement for the Supply of Battery Separators for Lead Acid Starter and Industrial Batteries" of
January 1, 1996, and amended on December 15, 1999, by and between Exide and Daramic. This Agreement now sets forth the entire Agreement and understanding of the parties with respect to
the transactions contemplated hereby and supersedes all prior agreements or understandings between the parties with respect thereto. However, this Agreement does not replace or affect the GCS Supply
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
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. 


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        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]
	 	 
	

Title:	
 	

 	
 	

 
	 	 	
	 	 
	

Daramic, Inc.	
 	

 
	

By:	
 	

        Jerry Zucker
	
 	

 
	

Title:	
 	

 	
 	

 
	 	 	Chairman, President & CEO
	 	 




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AUTOMOTIVE AND INDUSTRIAL SUPPLY CONTRACT