Modification #3 to the
Thiokol Long Term Pricing Agreement
Whereas, the parties entered into a “Thiokol Long Term
Pricing Agreement” dated December 12. 1997 and modified
on two subsequent occasions (Sept 30, 2000. and Jan 30, 2001);
(hereinafter “Thiokol LTA”);
Whereas, the parties desire to modify/add certain provisions to the
Thiokol LTA;
Now therefore, the parties agree as follows:
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1.
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Exhibit B to this Modification
establishes pricing for lower quantities and adds pricing for years
2009 through 2013. For years 2006 and beyond, the prices in
Exhibit B replace the prices in Exhibit A of the original
agreement. References to Exhibit A for years 2006 and on will
now be references to Exhibit B. Also, for years 2006 and
beyond, the prices in Exhibit A for volumes exceeding
20,000,000 pounds shall no longer be applicable. Effective
beginning in 2009, upon expiration of the Alliant Agreement, all
ATK purchases shall be placed under this Agreement. In the event
volumes exceed 20,000,000 pounds per year, the parties shall
negotiate mutually acceptable pricing that shall not exceed the
prices per pound established in Exhibit B for 19,000,001
— 20,000,000 pounds.
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2.
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D5
program AP prices for 2006 and on are now established in the Note
shown on Exhibit B.
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3.
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[THIS MATERIAL HAS BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED
SEPARATELY]
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4.
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AMPAC agrees to maintain ready and
qualified capacity to the current level of safety and performance;
maintain qualified status and programmatic support on all DoD and
NASA Programs; and maintain the current capability to produce the
entire range of AP products using the current qualified
manufacturing process. Both production lines (trains) at AMPAC
shall be maintained in this ready and qualified condition and
production shall utilize both lines in order to prevent cross
contamination with other products.
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5.
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The
parties agree to extend the period of performance of the Reclaimed
Ammonium Perchlorate Sales/Purchase Agreement dated January 30
, 2001 (as amended) through September 30, 2013. In the
event the AMPAC’s market for the resale of Reclaimed AP
substantially degrades compared to the current market, the parties
agree to enter into good faith negotiations to restructure
AMPAC’s obligations for purchase of Reclaimed AP such that
AMPAC will not be put in a position where AMPAC is required to:
(1) sell Reclaimed AP at a lower value than it pays Thiokol
for the material, or (2) dispose of Reclaimed AP due to the
inability to sell the material. Pending any restructure of
the
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agreement for
Reclaimed AP, the obligations of both parties under the agreement,
as extended above, will continue.
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6.
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In
the event industry volumes fan below [THIS AMOUNT HAS BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED
SEPARATELY] pounds and ATK’s customers require ATK to
purchase from another source or if ATK becomes non-competitive in
the market due to high AP pricing compared to another source of AP,
then ATK shall not be requ
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