Prepared by R.R. Donnelley Financial -- Letter Agreement between Constar and Pepsico



  
 Exhibit 10.16 
  
 January 17, 2001 
  
 Mr.
Michael Hoffman 
 Constar, Inc. 
 1 Crown Way 
 Philadelphia, PA 19154 
  
 Dear Mike: 
  
 This
letter serves to confirm and set forth certain amendments to the Supply Agreement (the “Agreement”) dated January 1, 1998 between Constar, Inc., a Pennsylvania Corporation and a wholly-owned subsidiary of Crown Cork & Seal, Inc.
(“Seller”) and New Century Beverage, a California corporation and wholly-owned subsidiary of PepsiCo, Inc. (“PepsiCo”). 
  
 Effective as of January 1, 2002, each of Supplier and PepsiCo agree to certain amendments to the Agreement as set forth below. Capitalized terms used herein that are not otherwise defined have the
meaning set forth in the Agreement. 
  

	A.
	The following provisions listed in this Section A below shall relate solely to the Buyer’s “Dallas Cell 3” locations (as defined in Exhibit B to
the Agreement, as amended) (“Cell 3 Locations”): 
 

  

	 	1.
	Section 2 of the Agreement regarding the “term” of the agreement is hereby amended by deleting “Exhibit B—Dallas Cell (3)” in its
entirety and replacing it with the language as set forth on Annex A attached hereto. 
 

  

	 	2.
	Exhibit C of the Agreement (as referenced in Section 5(a) of the Agreement) regarding “pricing” is hereby amended by replacing the Cell 3 Locations
pricing with the pricing set forth on Annex B attached hereto. 
 

  

	 	3.
	The first sentence of the third paragraph of Section 5(a) of the Agreement is deleted. [***] 
 

  

	 	4.
	[***] 
 

  

	 	5.
	In addition to the requirements of Section 16 regarding “quality and service”, the Parties agree that in the event that a particular quality, service
or packaging issue arises at a particular Cell 3 Location, Seller shall have thirty (30) days in which to resolve the issue, and that if successful resolution is not achieved in such time period, then Seller will not be permitted to produce the
particular package at the particular location until final resolution is demonstrated to and accepted by Buyer. Buyer shall have the right to secure such containers from an alternate source during such period of noncompliance; however Buyer will work
with Seller to secure such containers from Seller’s alternate locations where possible. 
 

 
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	 	6.
	On or prior to January 8, 2002 Seller shall have delivered to Buyer a plan satisfactory to Buyer demonstrating Seller’s capability to supply Containers to
[***]. 
 

  

	 	7.
	The parties agree that Seller shall be responsible for any and all freight charges resulting from deliveries to a Cell 3 Location from a location other than
those Seller supply locations listed on Annex B hereto [***]. 
 

  

	 	8.
	The parties agree that Seller shall use reasonable commercial efforts to exhaust on or prior to January 1, 2002 all of the inventory on hand in respect of
Buyer’s [***] location. 
 

  

	 	9.
	The parties agree that in the event that Seller closes, sells or otherwise disposes of a supply plant supporting the Cell 3 Locations during the Term (other
than the Dallas hub plant), then the parties agree that Seller shall be responsible for the New Freight Costs for the period of January 2002 through June 2002 and Buyer shall be responsible for the New Freight Costs for the period from July 2002
through December 2002. As used herein “New Freight Costs” shall mean those freight costs equal to the difference in freight costs that arise from shipping Containers from a new supply plant as compared to the freight costs from the
original supply plant, provided however that Buyer shall not be responsible for any freight costs if the freight costs from the new supply plant exceed the freight costs to such Cell 3 Location from the Dallas hub plant. 



  

	 	10.
	Seller agrees to work together with Buyer to reduce the number of missing and damaged Containers supplied by Seller and discovered in the periodic Bottle Audits
conducted by Buyer (“Bottler Audits”). Seller agrees to issue a credit to Buyer at Buyer’s bottle standard rate for those bottle loss rates in excess of the bottler loss rates that were mutually agreed upon in local partnership
meetings in accordance with Buyers standard Bottle Audit process. 
 

  

	 	11.
	Seller agrees to work with Buyer to reduce label costs throughout the Term. 
 

  

	B.
	The parties agree to the provisions listed in Section B below in respect of those locations specified below: 
 

  

	 	1.
	[***] 
 

  

	 	2.
	[***] 
 

 
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	 	3.
	In respect of all locations listed in the Agreement, Seller agrees to use its best efforts to increase the amounts spent by it on minority business programs in
order to meet Buyer’s system-wide target of increasing minority business spending by [***] over such spending in 2001, provided minority business products are competitive to other majority suppliers on quality, service, and price. 



  

	 	4.
	[***] 
 

  

	 	5.
	[***] 
 

  

	C.
	The parties agree to use commercial efforts to negotiate and enter into a definitive agreement for the supply of Containers to Buyer’s Trinidad and Jamaica
locations. 
 

  

	D.
	All provisions, terms and conditions of the Agreement not amended hereby shall remain in full force and effect for the duration of Terms listed above herein.

 

  
  
 
	 Acknowledged and Agreed
 	    	                 Acknowledged and Agreed
 
	 PepsiCo, Inc.
 	    	                 Constar, Inc.
 

 
  
 
	  	 	  	 	  
	 
	 By:
 	 	 /s/    Cathleen A. Lesko
 
	 	  	 	 By:
 	 	 /s/    Michael J. Hoffman
 

	  	 	 Name: Cathleen A. Lesko
 	 	  	 	  	 	 Name: Michael J. Hoffman
 
	  	 	 Title: Grp. Mgr. PET Global Procurement
 	 	  	 	  	 	 Title: President-Constar
 

 
  
 
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requested 
 









  
 ANNEX A 
  
 Exhibit B (3) 
  
 Dallas 
  
 Cell 3 
  

	 	•
	Term: January 1, 2002 through December 31, 2002 
 

  

	 	•
	[***] 
 

  

	 	•
	Collierville, TN 
 

  

	 	•
	Houston, TX 
 

  

	 	•
	Mesquite,TX 
 

  

	 	•
	Reserve, LA 
 

  

	 	•
	San Antonio, TX 
 

  

	 	•
	Tulsa, OK 
 

  

	 	•
	Constar supply points: Dallas, TX; Houston, TX; Reserve, LA; Collierville, TN and Crisp Container (Marion, IL). 
 

  

	 	•
	Volume Forecast shall be the T1 2002 forecast as supplied to Constar in writing by Pepsi. 
 

 
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 ANNEX B 
 2002 PRICING—CELL 3 “Dallas” 
  
 [***] 
  


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