EXHIBIT 10.17
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (the "First Amendment")
reference _______, dated and effective as of this [ * ] day of [ * ] is by and
between ROLLS-ROYCE plc, whose registered office is at 00 Xxxxxxxxxx Xxxx,
Xxxxxx, XX0X 0XX, England, incorporated under the laws of England (Reg. No.
1003142) ("R-R"), and TITANIUM METALS CORPORATION, whose corporate headquarters
are located at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, XX 00000, XXX, a Delaware
corporation ("TIMET"). TIMET and R-R are together referred to as the "Parties."
RECITALS
A. R-R and TIMET have executed an Agreement for Purchase and Sale of Titanium
dated as of [ * ] (the "Master Agreement"). Certain capitalized terms used
in this First Amendment but not defined herein shall have the meanings
ascribed to them in the Master Agreement or in the Exhibits and Schedules
thereto, all of which together form and constitute the Master Agreement.
B. The Master Agreement provides, among other things, that R-R will purchase
from TIMET and TIMET will sell to R-R a specified volume of certain TIMET
Titanium Products identified in the Master Agreement.
C. R-R and TIMET wish to amend the Master Agreement, to [ * ].
D. Upon execution by both Parties of this First Amendment, the Master
Agreement shall be amended by this First Amendment, and, thereafter, the
term "Master Agreement" shall mean that agreement as so amended.
NOW, THEREFORE, the Parties agree that the Master Agreement is amended follows:
AMENDMENT
1. DEFINITIONS
Section 1 of the Master Agreement shall be amended to add, in the appropriate
alphabetical order, the following new definitions:
[ * ]
"R&D"has the meaning given such term in Section 6.7(f) of the Master
Agreement.
[ * ]
"[ * ]" has the meaning given such term in Section 6.7(f) of the Master
Agreement.
[ * ]
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
The original Section 4.2 of the Master Agreement shall be renumbered as Section
4.3, and a new Section 4.2 shall be added to the Master Agreement as follows:
4.2 [ * ]
[ * ]
3.1 Subsection (a) of Section 5.3 of the Master Agreement shall be deleted
in its entirety, and replaced with the following new Subsection (a):
[ * ]
3.2 The following new Subsection (i) shall be added to Section 5.2 of the
Common Terms following Subsection 5.2(h) thereof:
[ * ]
4. CUSTOMER VALUE INITIATIVES
Section 6 of the Master Agreement shall be amended by adding thereto a new
Section 6.7, as follows:
6.7 TECHNICAL AND PRODUCTION IMPROVEMENT TARGETS SPECIFICALLY APPLICABLE
TO [ * ]
The Parties shall work together through the Customer Value Task Force
in support of the following joint technical initiatives aimed at
deriving mutual technical and commercial benefits from [ * ] are more
fully described in the following Subsections (a) through (i).
The Parties both acknowledge and agree that the Targets identified in
this Section 6.7 represent [ * ], that working toward each Target will
require the mutual commitment of both Parties, and that all efforts of
both Parties in furtherance of these Targets shall be subject to
normal commercial reasonableness (cost/benefit) standards.
The Parties further agree that the provisions contained in this
Section 6.7 are [ * ].
(a) Targets for Process Capability Improvements. [ * ].
[ * ]
[ * ]
The Parties shall work together to improve capabilities, in such
of the above referenced areas in which they reach mutual
agreement and cooperation as to improvements [ * ] after which
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* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
time annual improvement targets shall be established as an
ongoing function of the Customer Value Task Force.
(b) Targets for Mechanical Property Improvements. Specifically
designated representatives of TIMET and of R-R, including
representatives from [ * ] and any others to be designated by
R-R, will work together in an effort to achieve targeted
improvements in the mechanical property levels [ * ]. The Parties
will, through their meetings and discussions, mutually agree upon
selected improvements that will ultimately be pursued. The
Parties presently anticipate that the initial improvements will
be targeted [ * ].
The Parties will initially target an improvement [ * ]. TIMET
will contribute to the mechanical property improvements by a
variety of possible means that may include, among other things, [
* ].
Consistent with other confidentiality commitments that each of
the Parties may have, the Parties agree to cooperate to the
fullest possible extent in the exchange of information, knowledge
and expertise (including both internally managed technology
programmes and external research and development activities) in
working toward these target improvements with respect to the
following goals: [ * ].
(c) Targets for Lead Time Reductions. TIMET will provide R-R with its
best estimate of a datum point for the lead time scales for both
[ * ].
The Parties understand and acknowledge that reductions in lead
times for route processing necessarily involve [ * ]. Therefore,
the Parties each agree to work with [ * ] as are identified from
time to time, in an effort to better facilitate achieving the
targeted reductions, [ * ].
[ * ].
(d) Targets for Yield Improvements. In the interests of cost
reduction through increased material utilisation, the Parties
agree to cooperate in establishing a programme of work through
which they will jointly develop one or more means directed at [ *
]. To this end, the Parties shall work together supporting and
linking appropriate resources to achieve the following targeted
goals: [ * ].
The Parties agree to cooperate to work toward timely and
cost-effective initiation of trial work that may be required
prior to undertaking the steps necessary for testing and
validation of proposed new initiatives. [ * ].
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* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
(e) Targets Relating to Rolls-Royce Quality Renaissance. TIMET agrees
to work together with R-R in implementing Rolls-Royce Quality
Renaissance targets, with a goal of achieving reductions in
customer related incidents. In furtherance of these targets, the
Parties shall each cooperate to:
[ * ]
(f) Targets for Research and Development Activities. [ * ].
The Parties commit to undertake regular reviews of each of their
R&D activities and to dedicate some portion of each of their
total R&D activities in support of mutually agreed upon and
mutually defined areas of technological development. In addition
to regular R&D activity reviews, the Parties commit to at least
an annual review of progress against the agreed upon R&D targets.
(g) Other [ * ] Initiatives. TIMET will use all commercially
reasonable efforts to pursue such additional initiatives
pertaining [ * ] as have previously been or may in the future be
discussed, and as are mutually agreed to by the Parties.
(h) [ * ]
(i) Shared Understandings. The Parties will work together toward a
goal of achieving [ * ], and to this end will each continue to
participate in Customer Value Initiatives and other regular
forums to assist in achieving these targets. The Parties commit
to expanding the scope of the Customer Value Task Force as may be
reasonably necessary to accomplish such exchanges. [ * ]. The
Parties further acknowledge that in the course of developing and
implementing any new technical or production improvement targets,
[ * ].
5. [ * ].
The version of Section 4.1 of the Common Terms that is applicable to R-R and
contained in Section 8.1 of the Master Agreement shall be deleted and replaced
in its entirety by the following new Section 4.1:
4.1 Subject to the other terms and conditions contained in these Common
Terms (including, but not limited to, any limitations on [ * ] and to
Section 4.5 of these Common Terms), R-R agrees that it will purchase [
* ] from TIMET [ * ]during the term of the Purchase Agreement [ * ]:
[ * ]
Subject to the other terms and conditions of the Purchase Agreement,
TIMET agrees that it will sell to Purchaser such volume of TIMET
4
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
Titanium Products actually ordered by Purchaser. For purposes of this
Section 4.1:
(x) A TIMET Titanium Product shall be deemed to have been [ * ];
provided, however, that if payment for such TIMET Titanium
Product is not subsequently made by Purchaser, such TIMET
Titanium Product will be deducted from [ * ];
(y) TIMET Titanium Products with respect to which a Purchase
Order is terminated in accordance with Section 10.1 of the
Terms & Conditions shall be counted only in an amount equal
to the relevant volume (in kilograms) times the percentage
of applicable price actually paid as an Equitable
Termination Settlement in accordance with Sections 10.3 and
11.2 of the Terms & Conditions; and
(z) Any substitute Titanium Product purchased by Purchaser
pursuant to Sections 5.1(b) or 9.3 of the Terms & Conditions
shall be counted for purposes of this Section 4.1 as if it
were a TIMET Titanium Product purchased by Purchaser.
5
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
6. VOLUME LIMITATIONS
6.1 Section 2.11 through and including Section 2.32 of the Common Terms
shall be renumbered as Sections 2.12 through 2.33, respectively, and a
new Section 2.11 shall be added to the Common Terms, as follows:
2.11 [ * ] each for each TIMET Titanium Product (determined on the
basis of individual part numbers) contained in TIMET's production
schedule. In no case shall any such [ * ] be deemed to reduce, or
be construed to imply TIMET's agreement to reduce, the [ * ] set
forth in Schedule 2 to the Common Terms.
6.2 Section 2.12 of the Common Terms shall be deleted in its entirety and
replaced with the following new Section 2.12:
2.12 [ * ].
7. ADDITION OF [ * ] AND PRICING TO SCHEDULE 1 TO COMMON TERMS (PRICING
SCHEDULE) AND DIVISION OF [ * ]
7.1 Schedule 1 to the Common Terms shall be amended by adding thereto the
following products, which are hereafter included within the scope of
the term "TIMET Titanium Products" as used in the Master Agreement, [
* ]:
[ * ]
7.2 The TIMET Titanium Products identified in Schedule 1 to Exhibit A of
the Master Agreement, as amended by the addition of the products
listed in the [ * ] contained in Section 7.1 herein, shall be [ * ]
[ * ]
6
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
8. RENUMBERING OF CROSS REFERENCES TO AMENDED SECTIONS. To the extent any
sections in the Master Agreement are renumbered upon the effectiveness of
this First Amendment, all cross-references to such renumbered sections
contained in any part of the Master Agreement shall be deemed to be
revised, as appropriate, to refer to the renumbered section.
9. CONTINUING EFFECTIVENESS OF MASTER AGREEMENT. Except as expressly amended
by this First Amendment, the Master Agreement shall remain in full force
and effect.
10. COUNTERPARTS. This First Amendment may be executed in multiple, identical
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, this First Amendment to Purchase and Sale Agreement is
executed by an authorized representative of each Party to be effective as of the
date first hereinabove set forth.
ROLLS-ROYCE plc ROLLS-ROYCE plc
By: /s/ Xxxxx Hole By:/s/ Xxxxx Xxxx
------------------------ ----------------------
Name: Xxxxx Hole Name: Xxxxx Xxxx
---------------------- -------------------
Title: Procurement Director Title: Managing Director
--------------------- ------------------
Notices to:
----------
Rolls-Royce plc
X.X. Xxx 00
Xxxxx XX00 0XX, Xxxxxxx
Attn: [ * ]
General Manager - Materials Supply Chain
Facsimile No.: [ * ]
TITANIUM METALS CORPORATION
By: /s/ J. Xxxxxx Xxxxxx
---------------------------------------
Name: J. Xxxxxx Xxxxxx
-------------------------------------
Title: Chairman & Chief Executive Officer
------------------------------------
Notices to: With a copy to:
---------- --------------
TIMET UK Limited Titanium Metals Corporation
X.X. Xxx 000 0000 Xxxxxxxx, Xxxxx 0000
7
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Xxxxxxxxxx X0 0XX XXX
Xxxxxxx Attn: Vice President, General
Attn: Director--Sales and Marketing Counsel & Secretary
Facsimile No.: [ * ] Facsimile No.: [ * ]
8
* Certain information, indicated by [ * ], has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to such omitted portions.
