EXHIBIT 10.29
[SILGAN LETTERHEAD]
November 5, 1998
Del Monte Corporation
One Market Street
P.O. Box 193575
San Francisco, CA 94119-3575
Attention: Xxx Xxxxx
Re: Fifth Amendment to Supply Agreement dated as of September 3, 1993 as amended
Dear Xxx:
This letter shall serve to amend the Supply Agreement dated as of
September 3, 1993, as amended through the date hereof (the "Supply Agreement"),
by and between Del Monte Corporation ("DM") and Silgan Containers Corporation
("Seller"). Capitalized terms used and not defined herein shall have the
meanings assigned to them in the Supply Agreement.
Seller and DM hereby agree that the Supply Agreement shall be amended as
follows:
1. Notwithstanding anything in the Supply Agreement to the contrary, and
after taking into consideration discounts or allowances due to DM, and in order
to provide competitive relief to DM, Seller shall make a payment to DM of [XXX]
on January 4, 1999.
This letter amends the Supply Agreement only to the extent expressly
provided herein and shall not constitute an amendment to or modification of any
other provision of the Supply Agreement. Seller and DM hereby reaffirm all of
the other provisions of the Supply Agreement, and confirm that the Supply
Agreement as amended hereby continues in full force and effect. From and after
the date hereof, all reference to the Supply Agreement in the Supply Agreement
and other documents referred to therein shall be references to the Supply
Agreement as amended hereby.
[XXX] OMITTED PURSUANT TO REQUEST FOR CONFIDENTIAL TREATMENT. FULL TEXT
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
November 5, 1998
Page 2 of 4
requirements, Seller may substitute and supply to DM, and DM shall accept from
Seller, Cans using the two-piece method of manufacturing in place of Cans using
the three-piece method of manufacturing, at the same selling prices in the then
current Schedule 2.1(e) for such substituted three-piece Cans. DM and Seller
acknowledge and agree that the provisions of Article VII of the Supply Agreement
shall not be applicable to the particular substitution described in the
preceding sentence.
3. Notwithstanding DM's obligation with respect to the purchase of
Containers from Seller as set forth in the Supply Agreement, with regard to U.S.
domestic businesses acquired by DM from third parties after the date hereof (an
"Acquired Business") DM and Seller hereby agree that, within 60 days after the
date of consummation of the acquisition of such Acquired Business or, if
applicable, the expiration or termination date of an existing written agreement
requiring such Acquired Business to purchase containers thereunder from a third
party, DM may receive a bona fide written proposal from an Offeror having the
capability to manufacture and sell containers to DM of a type and quality
similar to the Containers that Seller is required to xxxxxxx XX under the Supply
Agreement for the remainder of the Term for the Acquired Business, which written
proposal provides selling prices and terms that are in DM's good faith opinion
more favorable than the selling prices and terms for the Containers to be
supplied by Seller for the Acquired Business pursuant to the terms of the Supply
Agreement and is based on not less than (i) 100% of the annual volume of all
Containers for the Acquired Business for the remainder of the Term or (ii) 100%
of the annual volume of all Containers for one or more facilities of the
Acquired Business for the remainder of the Term. DM shall notify Seller of any
such proposal and shall furnish Seller with a summary of all terms of such
proposal with reasonable specificity, including the identity of the Offeror. At
Seller's request, such summary shall be reviewed and confirmed by DM's
independent certified public accountants as an accurate summary of the terms of
such proposal. Seller shall have 30 days from the date of receipt of DM's notice
within which to submit a counterproposal to such bona fide competitive proposal.
If Xxxxxx's counterproposal would result in DM paying the same net selling price
for Containers for the Acquired Business that would be paid if the competitive
proposal were accepted and if Seller meets all the other terms and conditions,
including warranties but excluding any provisions providing for meeting
competitive bidding, of the competitive proposal, then DM shall accept Seller's
counterproposal. Upon consummation of the acquisition of an Acquired Business
(and following the expiration of the 60-day period referenced in the first
sentence of this paragraph), the terms of Article VI of the Supply Agreement
shall apply to the Containers supplied to the Acquired Business. If Seller
declines to meet the competitive proposal, DM shall be free to purchase
Containers for the Acquired
November 5, 1998
Page 3 of 4
Business from the Offeror pursuant to the competitive proposal commencing (i) 60
days after the expiration of the 30-day period or (ii) in those cases where
Seller is the sole supplier of containers to the Acquired Business prior to the
acquisition thereof by DM, if later, the date after which DM shall have
purchased from Seller pursuant to the terms of the Supply Agreement at a price
no greater than Seller's price to the Acquired Business all of Seller's then
existing inventory (not to exceed a reasonable and appropriate amount of such
inventory, considering the historic amounts of inventory typically maintained by
Seller for the Acquired Business at the relevant time and current orders and
estimates for containers provided by the Acquired Business to Seller) of
Containers for the Acquired Business (including Containers to be made from raw
materials then on hand or ordered by Seller for Containers for the Acquired
Business and including Containers to be made from work-in-progress for the
Acquired Business); provided that, if prior to acceptance of the competitive
proposal in the aggregate the terms and conditions of the competitive proposal
are changed to be less favorable to DM, DM shall resubmit such changed proposal
to Seller for Seller's counterproposal in accordance with this paragraph.
Notwithstanding anything herein to the contrary, the Containers purchased from
all Offerors shall not exceed, in any Supply Year, one-half of the aggregate
number of Containers to be furnished to DM during that Supply Year from Seller
and all Offerors. Subject to the preceding sentence, any Containers purchased
from the Offerors shall reduce accordingly the minimum requirements which DM
must purchase from Seller under the Supply Agreement.
4. DM and Seller hereby acknowledge that the Cap shall be appropriately
adjusted to take into account the acquisition by DM of an Acquired Business or
Acquired Entity, with any such adjustment to be effective as of the month the
Container requirements of such Acquired Business or Acquired Entity become
subject to the Supply Agreement.
5. DM and Seller hereby agree to extend the Term and that, accordingly,
the Term shall continue through December 21, 2006.
This letter amends the Supply Agreement only to the extent expressly
provided herein and shall not constitute an amendment to or modification of any
other provision of the Supply Agreement. Seller and DM hereby reaffirm all of
the other provisions of the Supply Agreement, and confirm that the Supply
Agreement as amended hereby continues in full force and effect. From and after
the date hereof, all reference to the Supply Agreement in the Supply Agreement
and other documents referred to therein shall be references to the Supply
Agreement as amended hereby.
November 5,1998
Page 4 of 4
If you are in agreement with the foregoing, please execute a copy of
this letter in the space provided below.
Very truly yours,
SILGAN CONTAINERS CORPORATION
By: /s/ XXXXX X. XXXX
---------------------------------
Xxxxx X. Xxxx
President
Agreed to as of the date above:
DEL MONTE CORPORATION
By: /s/ XXXXXX X. XXXXX
----------------------------
Name: X X Xxxxx
Title: Chief Operating Officer
Schedules
Schedule 2.1(e)
