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
                              P.O. Box 707, M/S T40
                           Brigham City, UT 84302-0707

                      (hereinafter referred to as THIOKOL)

                                       AND

                          AMERICAN PACIFIC CORPORATION

             A Corporation of the State of Delaware with offices at

                          American Pacific Corporation
                      3370 Howard Hughes Parkway, Suite 300
                             Las Vegas, Nevada 89109

                       (hereinafter referred to as AMPAC)


                                   WITNESSETH:

WHEREAS, American Pacific Corporation has announced their intentions to purchase
the  ammonium  perchlorate  (AP)  business of  Kerr-McGee  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

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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
                  Kerr-McGee.

         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]

                                       -3-

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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.


                                       -4-

<PAGE>
         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

                                       -5-

<PAGE>
         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/ James P. Dyar                           /s/ Layne Winzeler
-----------------------------               ------------------------------------
(Signature)                                 (Signature)

James P. Dyar                               Layne Winzeler
-----------------------------               ------------------------------------
(Type Name)                                 (Type Name)

Vice President                              Director, Procurement
-----------------------------               ------------------------------------
(Title)                                     (Title)


                                       -6-

<PAGE>
                                    EXHIBIT A
                                    5-Dec-97

         [THIS MATERIAL HAS BEEN OMITTED  PURSUANT TO A REQUEST FOR CONFIDENTIAL
         TREATMENT AND HAS BEEN FILED SEPARATELY]