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Exhibit 10.1
 Modification #3 to the
Thiokol Long Term Pricing Agreement
    1.
    
    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.2.
    
    D5 program AP prices for 2006 and on are now established in the
Note shown on Exhibit B.3.
    
    [THIS MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY]4.
    
    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.5.
    
    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.
 6.
    
    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 required to purchase all
of its volume from AMPAC. Prior to ATK purchasing from another source, ATK and
AMPAC shall work together in good faith in an attempt to establish pricing that
is acceptable to ATKs customers or pricing that enables ATK to be competitive.7.
    
    In Paragraph 9 (Term and Termination of Agreement), the following
provisions are added to address termination of the Thiokol agreement:
 a.
    
    Unless extended by mutual consent, this Agreement
shall remain in effect through GFY2013, unless earlier terminated by one
of the following circumstances:
 i.
    
    One of the parties petitions for
bankruptcy or reorganization under bankruptcy laws, or makes an
assignment for the benefit of creditors. Termination is at the
election of the other party.ii.
    
    One of the parties becomes physically
incapable of performing or is ineligible to perform its
obligations under the contract due to circumstances such as
debarment, suspension, or other legal action. Termination is at
the ejection of the other party.
 8.
    
    ATK shall pay [THIS MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY] for the right to have
AP stored at the AMPAC facility at no additional cost. This applies to all ATK
purchases under the Thiokol Agreement and the Alliant Agreement.9.
    
    Effective with the date of this agreement the Provision 8. Disputes
shall be replaced with the following:DISPUTESWith the exception of the AMPAC Historical Environmental Remediation Claim which
is addressed in paragraph 10 below, any c1aim, controversy or dispute arising out
of or relating to this Agreement which is not disposed of by mutual agreement
shall be submitted to mediation by a mutually agreeable mediator. Senior level
executives for both parties must participate in the mediation and exert good faith
effort to settle the dispute. If good faith efforts to mediate do not result in a
settlement, the dispute shall be decided by binding arbitration conducted under
the rules of the American Arbitration Association.
Pending final resolution of any claim, controversy or dispute, the parties will
diligently proceed with performance of this Agreement.




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10.
    
    Both parties agree to waive any and all existing claims or REAs
related to the Thiokol LTA agreement except for Items a. and b. as identified
below.
 a.
    
    This does not include: a waiver of amounts owed to
the other party resulting from differences in interim versus final
billings.b.
    
    AMPAC Historical Environmental Remediation Costs:
          ATK THIOKOL
    
    
    
    AMPACDate: 4/5/06
    
    
    
    Date: 4/5/06




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