LONG-TERM PRICING AGREEMENT
This agreement is entered into as of the 12th day of December 1997.
BETWEEN
THIOKOL CORPORATION - PROPULSION GROUP
A Corporation of the State of Delaware with offices at
Thiokol Corporation
X.X. Xxx 000, X/X X00
Xxxxxxx Xxxx, XX 00000-0000
(hereinafter referred to as THIOKOL)
AND
AMERICAN PACIFIC CORPORATION
A Corporation of the State of Delaware with offices at
American Pacific Corporation
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
(hereinafter referred to as AMPAC)
WITNESSETH:
WHEREAS, American Pacific Corporation has announced their intentions to purchase
the ammonium perchlorate (AP) business of Xxxx-XxXxx Chemical Corporation
(hereinafter referred to as Asset Purchase Agreement); and
WHEREAS, AMPAC desires the Federal Trade Commission not oppose the Asset
Purchase
Agreement; and
WHEREAS, approval of said Asset Purchase Agreement may result in AMPAC becoming
the single domestic source of aerospace quality AP; and
WHEREAS, THIOKOL desires long term price stability for its purchased AP
requirements for its solid rocket motor business; and
WHEREAS, NASA also desires long term price stability.
NOW, THEREFORE, in consideration of the premises, covenants and conditions
contained herein, the parties agree as follows:
1. PURPOSE OF LONG-TERM AGREEMENT
a. This agreement is entered into to ensure THIOKOL an ongoing
domestic supply of aerospace quality AP that can be used in
the manufacture of sold rocket motors. This agreement is
intended to enhance each party's unique capabilities regarding
their understanding, manufacture, quality, cost, delivery and
use of AP for solid rocket motors.
b. The parties agree to issue and accept purchase orders that are
consistent with the terms of this agreement. The purchase
orders shall further define the rights and obligations of the
parties, including continued performance and/or termination.
The purchase orders issued by THIOKOL pursuant to this
agreement shall include, among other provisions mutually
acceptable to the parties, those provisions required by law
and regulation and any clauses of the prime contract that are
mandatory or necessary. Nothing contained herein is intended
to preclude either party from submitting proposals or
performing work not related to this agreement.
c. This agreement establishes that AP will be provided by AMPAC
as a commercial product as defined in FAR 2.101 and 52.202-1
and purchased in accordance with FAR Part 12 and 52.244-6.
d. The agreement is contingent on the satisfactory closing of
that certain Asset Purchase Agreement between AMPAC and
Xxxx-XxXxx.
e. The parties agree to cooperate fully and exchange information
such that each can perform its obligations hereunder with
optimum effectiveness.
2. AMPAC'S RESPONSIBILITIES
a. Comply with the requirements, terms and conditions of all
THIOKOL purchase orders insofar as such requirements, terms
and conditions are consistent with this agreement and FAR Part
12 and 52.244-6.
b. Provide AP of the desired quality and quantity in accordance
with the terms of the purchase orders issued by Thiokol.
c. Provide, pursuant to FAR 15-804.5, information to Thiokol as
may be required and necessary to determine the reasonableness
of prices charged under this agreement.
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d. Provide sufficient material to perform qualification testing
on all new and current programs.
e. Provide a manufacturing capability that support THIOKOL's
program needs.
f. Provide technical expertise to ensure an ongoing supply of AP.
g. In order to ensure product consistent and reliability, all
process or supplier changes shall be reviewed and approved by
THIOKOL before implementation, such approval not to be
unreasonably withheld.
3. THIOKOL'S RESPONSIBILITIES
a. Issue purchase orders that are consistent with this agreement
and obtain all purchased AP requirements from AMPAC to the
extent AMPAC can meet Thiokol's requirements with acceptable
AP.
b. Provide AMPAC with known and anticipated AP requirements
forecasts and program schedules.
4. [THIS MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND HAS BEEN FILED SEPARATELY]
5. PRICE VOLUME MATRIX
[THIS MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND HAS BEEN FILED SEPARATELY]
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6. REPROCESSED/RECLAIMED AP
The parties shall work closely together and exchange business and
technical information such that reprocessed and/or reclaimed AP may be
utilized in THIOKOL'S solid rocket motor business at a cost savings for
participating programs. Since there may be a limited supply, THIOKOL
shall be given the first right of first refusal to take advantage of
any available quantities of reprocessed or reclaimed AP.
7. LEGAL EFFECT OF AGREEMENT
The parties agree to abide by this agreement and the covenants
expressly contained herein. The business relationship that exists as a
result of this agreement is not to construed as a business partnership
under, nor governed by, the Uniform Partnership Act or the common law
of business partnerships. Neither party shall have authority to create
any obligations for the other.
8. DISPUTES
Controversies or claims arising out of or relating to this agreement
and its intended purchase orders, including any disagreements,
interpretations or disputes, shall first be submitted jointly to the
signatories of this agreement (or their successors) for settlement. A
joint decision of the signatories or their designees shall be the
disposition of such disagreement or dispute. If the signatories are
unable to jointly resolve a dispute within 15 days of when the parties
commence discussion of the dispute, the matter shall be submitted to an
EXECUTIVE COMMITTEE for final resolution. Such EXECUTIVE COMMITTEE
shall be composed of the senior executive or the designee of each party
and one independent member acceptable to the two senior executives or,
if no agreement regarding the third member can be reached in ten days,
then such member is to designated by the National Aeronautics and Space
Administration (NASA). A majority of the EXECUTIVE COMMITTEE is
sufficient to render a binding final decision. If necessary, any court
of competent jurisdiction may enforce the final decisions of the
EXECUTIVE COMMITTEE.
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To the extent AP is required under any purchase order under a
Government contract subject to the Contract Dispute Act of 1978, this
agreement shall also be subject to said Act. Failure or the parties to
reach agreement as described above, on any request for equitable
adjustment, claim, appeal or action arising under or relating to this
agreement and its subsequent purchase orders and for which any
appropriate Government Contracting Offer has issued a final
determination and where such final determination has a bearing on this
agreement or any purchase order issued under this agreement, shall be a
dispute to be resolved in accordance with FAR 52.233-1. Thiokol agrees
to sponsor any reasonable claim brought by AMPAC under FAR 52.233-1 in
Thiokol's name and at AMPAC's expense.
Pending the resolution of any dispute or claim, AMPAC shall proceed
diligently with the performance of this agreement and all obligations
in accordance with the direction of the THIOKOL signatory or designee.
9. TERM AND TERMINATION OF AGREEMENT
Except as noted below, this agreement shall remain in effect for a
minimum of ten years following the effective date and may be extended
by the mutual agreement of the parties.
The parties agree to issue and abide by purchase orders that are
consistent with this agreement. Each Purchase order shall define the
rights of the parties with respect to continued performance and/or
termination.
10. PUBLICITY
No publicity or advertising relating to this agreement shall be
released without both parties prior written approval. Nothing in this
provision shall prohibit publication of price lists and discount
structures.
11. ASSIGNMENT
Neither party shall assign, nor in any manner transfer, its interests
or any part thereof in this agreement without the prior written consent
of the other party. Nothing in this provision shall prevent the
transfer of all or substantially all assets of either party to any
other entity.
12. FORCE MAJEURE
No party shall be liable for the consequences of any unforeseeable
event beyond its reasonable control not caused by the fault or
negligence of such party, that causes such party to be unable to
perform its obligations under this agreement (and which it has been
unable to overcome by the exercise of due diligence), including, but
not limited to, flood, drought, earthquake, storm, fire, pestilence,
lightning and other natural catastrophes, epidemic, war, riot, civil
disturbance or disobedience, strikes, labor dispute, or failure, threat
of failure, or sabotage of facilities, or any order, decree, or
injunction made by a court or public agency, In the event of the
occurrence of such a force majeure event, the
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party unable to perform shall promptly notify the other party, shall
further use its best efforts to resume satisfactory performance as
quickly as possible, and shall suspend performance only for such period
of time as is necessary as a result of the force majeure event.
13. APPLICABLE LAW
The validity and performance of this agreement shall be governed by the
generally accepted laws acceptable to federal government contracts,
otherwise by the laws of the State of Utah.
14. ENTIRE AGREEMENT
This agreement, including attachments hereto, constitutes the entire
understanding between the parties and supersedes any prior oral or
written agreements with respect to the subject matter hereof. The
agreement shall not be modified unless agreed to in writing by both
parties. Under no circumstances will this agreement violate any
antitrust statutes.
15. ATTACHMENTS
a. The following attachment is applicable to this agreement:
EXHIBIT A: Ammonium Perchlorate price volume matrix dated 5
December 1997.
IN WITNESS WHEREOF, the parties hereto have executed this agreement effective as
of the date indicated on this first page.
AMERICAN PACIFIC CORPORATION THIOKOL CORPORATION PROPULSION GROUP
/s/ Xxxxx X. Xxxx /s/ Xxxxx Xxxxxxxx
----------------------------- ------------------------------------
(Signature) (Signature)
Xxxxx X. Xxxx Xxxxx Xxxxxxxx
----------------------------- ------------------------------------
(Type Name) (Type Name)
Vice President Director, Procurement
----------------------------- ------------------------------------
(Title) (Title)
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EXHIBIT A
5-Dec-97
[THIS MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND HAS BEEN FILED SEPARATELY]
