Exhibit 10.21.1
AMENDMENT TO AGREEMENT
THIS AMENDMENT TO AGREEMENT is entered into as of this 28th day of October,
2005, by and between UNION PACIFIC RAILROAD COMPANY ("UP") and CXT INCORPORATED
("CXT").
WHEREAS, UP and CXT entered into an Agreement dated January 21, 2005 (the
"Original Agreement"), pursuant to which UP agreed to purchase from CXT, and CXT
agreed to sell to UP, various types of concrete ties; and
WHEREAS, UP and CXT wish to amend the Original Agreement.
NOW, THEREFORE, for and in consideration of the foregoing premises, the
mutual promises and conditions herein contained, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged by the parties, the parties hereby agree as follows:
SECTION 1. AMENDMENT OF ORIGINAL AGREEMENT.
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Effective as of the date first written hereinabove, the Original Agreement
is amended as follows:
A. Section 2.1 is deleted in its entirety and replaced by the following:
"Section 2.1 Transaction; Production for Third Parties; Right of First
Refusal; Most Favored Nation Pricing. CXT agrees to sell to UP, and UP agrees to
purchase from CXT, Ties upon the terms and conditions set forth herein. CXT
shall have the right to manufacture concrete railroad ties and other products at
the Plants for sale to third parties; provided, however that:
(a) such manufacturing shall not interfere with CXT manufacturing
Ties reasonably required by UP pursuant to the Annual Estimates (as
such term is defined in Section 2.3, below);
(b) CXT may not sell concrete ties produced at either Plant to any third
party during any year unless it first offered UP an opportunity to
purchase, at UP's sole election, all or any portion of such ties at
the Purchase Prices payable by UP to CXT under Section 2.4 for Ties
Produced at the Plant at which such ties were produced. Any such
offer to UP (x) shall be in writing, (y) may not be made by CXT
prior to October 31 of the year immediately preceding the year in
which the third party sale is proposed to take place, and (z) if not
accepted by UP within ten (10) days following its receipt shall be
deemed declined by UP. The parties agree that, notwithstanding
UP's acceptance of
an offer, the volume of UP's purchases pursuant to such offer may
vary from it by up to ten percent (10%) up or down;
(c) CXT may sell to third parties during any year only those ties, if
any, that UP declined to purchase pursuant to Subsection 2.1(b);
(d) CXT shall give UP's then existing Tie production schedule priority
over the production schedule proposed for any ties to be sold to a
third party pursuant to Subsection 2.1(c); and
(e) should CXT sell concrete ties manufactured at either Plant,
substantially similar to any Tie (excluding shoulders and fastening
systems), to any third party for a total price (including all
rebates, discounts, service charges, etc.) which is less (the
"Lesser Third Party Price") than the Purchase Prices (as such
term is defined in Section 2.4, below) then payable by UP to CXT
for Ties purchased at an annual rate of 300,000 Ties Produced from
the applicable Plant, then (x) the Standard Tie Prices and/or Special
Tie Prices (as such terms are defined in Section 2.4, below), as
applicable, shall be reduced to the Lesser Third Party Price during
the period of the effectiveness of such Lesser Third Party Price
and (y) the ties produced for such third parties shall count toward
the applicable per Plant Annual Minimum (as such term is defined in
Section 2.3, below).
B. In the fourth and fifth lines of the first paragraph of Section 2.2,
the words "December 31, 2009" are deleted and replaced with the words
"December 31, 2010".
C. The third sentence of the first paragraph of Section 2.3 is deleted in
its entirety and replaced with the following two sentences:
"On or before December 1 of each year during the term of this
Agreement UP will provide CXT a non-binding estimate (the "Annual
Estimate") of the number of Ties Produced at each Plant during the
next following Program Year that it estimates it will purchase from
CXT. The number of Ties actually purchased by UP from either or both
Plants during any Program Year(s) may, at UP's option, be more or less
than the number estimated in the applicable Annual Estimate subject to
such Plant's production capability during such Program Year or any
subsequent Program Year and after deducting sales to third parties
permitted under Section 2.1."
D. The fifth paragraph of Section 2.3 is deleted in its entirety and
replaced with the following two paragraphs:
"Initially, the updated GI Plant was sized to Produce
approximately 375,000 Ties per year (31,250 Ties per month), on three
production lines, assuming 350 days per year of production. CXT will
add a fourth line at the GI Plant that will expand its Production to a
minimum of 460,000 Ties per year (38,333 Ties per month). UP will
contribute a total of * of the cost to add the fourth line at
the GI Plant (the "Fourth Line Cost") as follows: CXT shall initially
pay one hundred percent (100%) of the Fourth Line Cost. The GI
Standard Tie Price for Ties Produced at the GI Plant shall be
increased by a surcharge of * per Tie until the total of such
surcharges received by CXT equals *.
"Prior to the shutdown of the GI Plant for installation of the
New Technology, CXT will Produce Ties at the GI Plant at a rate of
24,000 Ties per month. To provide a "seamless" supply of Ties to UP
notwithstanding (a) the fact that the New Technology may not be at
full capacity at the GI Plant until ten (10) months, subject to
extension as provided above, following January 21, 2005, (i.e.,
November 21, 2005, subject to extension), and (b) that it is
anticipated that the GI Plant will be shut down for approximately two
(2) months during the installation of the New Technology. During the
period January 1, 2005 through December 31, 2005, CXT will Produce
and/or provide a total of 300,000 Ties for sale to UP as follows:
A. 245,000 Ties at the GI Purchase Price will be available
at the GI Plant for shipment;
B. 20,000 Ties Produced at CXT's plant in Spokane, WA
(the "Spokane Plant") which it will sell and ship to
UP fob the GI Plant at the Purchase Prices then
payable by UP to CXT for Ties purchased at an annual
rate of 300,000 Ties Produced at the GI Plant. UP
will have no responsibility for loss of or damage to
such Ties while in transit from the Spokane Plant to
the GI Plant as described above in this Section 2.3;
and
C. 35,000 Ties at the GI Purchase Price will be
Produced and available at the Spokane Plant (the
"Spokane Ties"). The Spokane Ties may be purchased
by UP after CXT has produced the 20,000 Ties
described in Subsection B., above, subject to the
limitation that UP shall schedule its purchases of
the Spokane Ties so that it can purchase them based
on CXT's maximum Spokane Plant production rate of
10,000 Ties per month.
The Spokane Ties will be included for purposes of determining
the GI Standard Tie Price in accordance with Section 2.4(a),
below.
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* Indicates the location of confidential data which has been omitted and
filed separately with the Securities and Exchange Commission.
E. The following is added as a new paragraph at the end of
Section 2.3:
"If during any Program Year, both (a) UP purchases
300,000 or more Ties Produced at the GI Plant, and (b) more
than 375,000 ties are produced at the GI Plant and sold to UP
and any third parties, CXT shall pay to UP an amount equal to
$.50 multiplied by the lesser of (i) the total ties produced
and sold to UP and any third parties during such Program Year,
minus 375,000 ties, or (ii) the total ties produced and sold
to third parties during such Program Year."
F. Subsections (a) and (b) of the first paragraph of
Section 2.4 are deleted in their entirety and replaced with the
following:
"(a) GI Standard Tie Prices: The GI Standard Tie Prices for
Ties Produced at the GI Plant during 2005 are the amounts set
forth below, adjusted pursuant to Section 2.4(f), below
(production amounts include Ties Produced for sale to UP):
================= ============== =============== =============== =============== ============== =============== ===============
100,000 200,000 250.000 300,000 - 350,000 - 400,000 450,000 500,000+ Ties
(minimum) - -249,999 -299,999 Ties 349,999 Ties 399,999 Ties -449,999 -499,999 Ties Produced per
199,999 Ties Ties Produced per Produced per Produced per Ties Produced per Year
Produced per Produced per Year Year Year Produced per Year
Year Year Year
----------------- -------------- --------------- --------------- --------------- -------------- --------------- ---------------
* * * * * * * *
================= ============== =============== =============== =============== ============== =============== ===============
If during any year the actual number of Ties Produced for sale
to UP is less than the Annual Estimate for such year, as
modified by UP from time to time (the "Modified Annual
Estimate"), due to any failure on the part of CXT, the GI
Standard Tie Price for Ties sold to UP during such year shall
be calculated as if such Production were at the level
specified by UP in the Modified Annual Estimate. Any such
Modified Annual Estimates shall not exceed the remaining
monthly capacity of the Plant under Section 2.3, minus third
party sales commitments permitted under Section 2.1.
"(b) Tucson Standard Tie Prices: The Tucson Standard Tie
Prices for Ties Produced at the Tucson Plant during 2005 are
the amounts set forth below, adjusted pursuant to Section
2.4(f), below (production amounts include Ties Produced for
sale to UP):
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* Indicates the location of confidential data which has been omitted and
filed separately with the Securities and Exchange Commission.
====================== ================== ================= ================= =================
100,000 (minimum) - 200,000 -299,999 300,000 400,000 500,000+ Ties
199,999 Ties Ties Produced -399,999 Ties -499,999 Ties Produced per
Produced per Year per Year Produced per Produced per Year
Year Year
---------------------- ------------------ ----------------- ----------------- -----------------
* * * * *
====================== ================== ================= ================= =================
If during any year the actual number of Ties Produced for sale
to UP is less than the Annual Estimate for such year, as
modified by UP from time to time (the "Modified Annual
Estimate"), due to any failure on the part of CXT, the Tucson
Standard Tie Price for Ties sold to UP during such year shall
be calculated as if such Production were at the level
specified by UP in the Modified Annual Estimate. Any such
Modified Annual Estimates shall not exceed the remaining
monthly capacity of the Plant under Section 2.3, minus third
party sales commitments permitted under Section 2.1."
F. The first sentence of Section 2.6 is deleted in its entirety and
replaced with the following:
"No less than thirty (30) days prior to the start of each
quarter of each Program Year UP will provide to CXT, and CXT
shall accept and honor, purchase orders for each of the Plants
for each month of such quarter."
G. The fourth sentence of Section 2.6 is deleted in its entirety and
replaced with the following:
"Unless previously agreed to by CXT in writing, UP may not
issue any monthly purchase order for Ties in an amount in
excess of the applicable monthly Production amounts set forth
in Section 2.3, after deducting sales to third parties
permitted under Section 2.1."
SECTION 2. EFFECT OF AMENDMENT ON ORIGINAL AGREEMENT.
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Except as otherwise expressly provided in this Amendment to
Agreement, the terms and conditions of the Original Agreement shall remain in
full force and effect.
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* Indicates the location of confidential data which has been omitted and
filed separately with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have set their hands on
the date first hereinabove written.
CXT INCORPORATED
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (11/7/05)
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Its: Chief Executive Officer
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UNION PACIFIC RAILROAD COMPANY
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: General Director-Engineering Purchasing
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