EXECUTION VERSION
$400,000,000
BOTTLING GROUP, LLC
5.00% SENIOR NOTES DUE 2013
UNDERWRITING AGREEMENT
November 12, 2003
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
As Representatives of the several Underwriters
c/o Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Bottling Group, LLC, a Delaware limited liability company (the
"COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several underwriters named in Schedule A hereto (the
"UNDERWRITERS"), for whom Citigroup Global Markets Inc., Credit Suisse First
Boston LLC and Deutsche Bank Securities Inc. are acting as representatives (the
"REPRESENTATIVES"), U.S.$400,000,000 aggregate principal amount of its 5.00%
Senior Notes due November 15, 2013 (the "NOTES") to be issued under an indenture
(the "INDENTURE") entered into between the Company and JPMorgan Chase Bank, as
trustee (the "TRUSTEE"). The United States Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, are herein referred to
collectively as the "SECURITIES ACT."
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Registration
No. 333-108225) for the registration of senior notes, including the Notes, and
the offering thereof from time to time in accordance with Rule 415 under the
Securities Act. Such registration statement has been declared effective by the
Commission, and the Company has filed such post-effective amendments thereto as
may be required prior to the execution of this Agreement and each such
post-effective amendment has been declared effective by the Commission. Such
registration statement, as so amended, if applicable, including the exhibits and
schedules thereto and including all documents incorporated by reference therein
pursuant to Item 12 of Form S-3, prior to the execution of this Agreement, is
called the "REGISTRATION STATEMENT." Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the "RULE
462(B) REGISTRATION STATEMENT," and from and after the date and time of filing
of the Rule 462(b) Registration Statement, the term "Registration Statement"
shall include the Rule 462(b)
Registration Statement. The final prospectus and the final prospectus supplement
relating to the offering of the Notes, in the form first furnished to the
Underwriters by the Company for use in connection with the offering of the
Notes, including all documents incorporated by reference therein pursuant to
Item 12 of Form S-3 prior to the execution of this Agreement, are collectively
called the "PROSPECTUS." All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, the Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included," "described" or "stated"
in the Registration Statement or the Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (collectively, the
"Exchange Act") which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.
The Company hereby agrees with the several Underwriters as follows:
1. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, the several
Underwriters that:
(a) The Company meets the requirements for the use of Form S-3
under the Securities Act. The Registration Statement and any Rule 462(b)
Registration Statement have been declared effective by the Commission
under the Securities Act. The Company has complied to the Commission's
satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement is
in effect and no proceedings for such purpose have been instituted or
are pending or, to the best knowledge of the Company, are contemplated
or threatened by the Commission.
(b) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act. The Prospectus
when filed complied and will comply in all material respects with the
Securities Act, and the Prospectus delivered to the Underwriters for use
in connection with the offer and sale of the Notes will, at the time of
such delivery, be identical to any copies filed by electronic
transmission pursuant to ▇▇▇▇▇ (except as may be permitted by Regulation
S-T under the Securities Act).
(c) Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto
(including the filing of the Company's most recent Annual Report on Form
10-K with the Commission (the "ANNUAL REPORT ON FORM 10-
2
K")), at the time it became effective and at all subsequent times,
complied and will comply in all material respects with the Securities
Act and the Trust Indenture Act of 1939, as amended, and the rules and
regulations promulgated thereunder (collectively, the "TRUST INDENTURE
ACT") and did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus,
as amended or supplemented, as of its date and at all subsequent times,
did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the Trust
Indenture Act or to statements in or omissions from the Registration
Statement, including any Rule 462(b) Registration Statement or any
post-effective amendment to the Registration Statement, or the
Prospectus, or any amendments or supplements thereto, based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for
use therein ("UNDERWRITERS' INFORMATION"). There are no contracts or
other documents required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement which have not been
described or filed as required.
(d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the
respective times they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements
of the Exchange Act, and, when read together with the other information
in the Prospectus, at the date of the Prospectus and at the Closing Date
(as defined herein), did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(e) The Company has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the State
of Delaware; the Company has the limited liability company power and
authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement, the Indenture and the Notes; and
the Company is duly qualified as a foreign limited liability company to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
material adverse change (or development involving a prospective material
adverse change) in the business, properties, earnings or financial
condition of the Company and its subsidiaries, taken as a whole (a
"COMPANY MATERIAL ADVERSE EFFECT").
(f) The Company has no "significant subsidiary" (as such term is
defined in Rule 1-02 of Regulation S-X) other than Pepsi Gemex, S.R.L.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
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(h) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized and (assuming due
authorization, valid execution and delivery thereof by the Trustee)
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar
laws relating to creditors' rights generally, by general principles of
equity or by the discretion of any court before which any proceeding
therefor may be brought.
(i) The Notes have been duly authorized by the Company and, when
issued, executed and authenticated in accordance with the Indenture and
delivered to and duly paid for by the Underwriters in accordance with
this Agreement, will constitute the valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
and will be entitled to the benefits of the Indenture, except as such
enforceability may be limited by the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
relating to creditors' rights generally, by general principles of equity
or by the discretion of any court before which any proceeding therefor
may be brought.
(j) The Notes and the Indenture conform in all material respects
to the description thereof contained in the Registration Statement and
the Prospectus.
(k) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement, the
Indenture or the Notes in connection with the issuance and sale of the
Notes by the Company except such as may be required by the Securities
Act and the Trust Indenture Act and the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Notes by
the Underwriters.
(l) The Company is not (i) in violation of its certificate of
formation or limited liability company agreement or (ii) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument
to which the Company is a party or by which the Company may be bound, or
to which any of the property or assets of the Company is subject
(collectively, "AGREEMENTS AND INSTRUMENTS"), except, in the case of
clause (ii), for such defaults that would not result in a Company
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, the Indenture and the Notes, the consummation of the
transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary limited liability company action and do not
and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Company Material Adverse
Effect), nor will such action result in any violation of (A) the
provisions of the certificate of
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formation or limited liability company agreement of the Company or (B)
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations (except,
in the case of clause (B), for such violations that would not result in
a Company Material Adverse Effect). As used in this paragraph, a
"REPAYMENT EVENT" means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any of its subsidiaries.
(m) The Company possesses such permits, licenses, approvals,
consents and other authorizations (collectively, "GOVERNMENTAL
LICENSES") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by it, except where the failure to so possess such Governmental
Licenses would not, singly or in the aggregate, have a Company Material
Adverse Effect; the Company is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Company
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect would not have a Company Material Adverse
Effect; and the Company has not received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses, singly or in the aggregate, the resolution of which could
reasonably be expected to result in a Company Material Adverse Effect.
(n) No labor dispute with the employees of the Company exists or,
to the knowledge of the Company, is imminent, and the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of the Company's principal suppliers, manufacturers, customers or
contractors, which, in any case, may reasonably be expected to result in
a Company Material Adverse Effect.
(o) The Company owns, possesses or holds under valid license, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "INTELLECTUAL
PROPERTY") necessary to carry on the business now operated by it, and
the Company has not received any notice or is not otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company therein, and the resolution of such
infringement or conflict could reasonably be expected to result in, or
the invalidity or inadequacy, singly or in the aggregate, would result
in, a Company Material Adverse Effect.
(p) Except as described or incorporated by reference in the
Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or
5
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any of its subsidiaries, and there is no statute or
regulation, and no agreement, instrument or other document to which, in
any case, the Company is a party, or by which, in any case, any of the
properties of the Company is bound, that is required to be disclosed in
the Prospectus, or which is reasonably expected to result in a Company
Material Adverse Effect, or which is reasonably expected to materially
and adversely affect the consummation of the transactions contemplated
in this Agreement, the Indenture or the Notes or the performance by the
Company of its obligations hereunder or thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective property
or assets is the subject which are not described or incorporated by
reference in the Prospectus, including ordinary routine litigation
incidental to the business, is not reasonably expected to result in a
Company Material Adverse Effect.
(q) The consolidated financial statements of the Company and its
subsidiaries included or incorporated by reference in the Prospectus,
together with the related schedules and notes thereto, present fairly
the financial position, results of operations and cash flows of the
Company and its subsidiaries at the dates and for the periods indicated.
The consolidated balance sheets and consolidated statements of
operations, changes in owners' equity and cash flows of the Company and
its subsidiaries at the dates and for the periods specified have been
prepared in conformity with generally accepted accounting principles in
the United States of America ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Prospectus present fairly
in accordance with GAAP the information required to be stated therein.
Except as described or incorporated by reference in the Prospectus, the
selected historical financial data and the summary historical financial
data of the Company and its subsidiaries included in the Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited consolidated financial
statements included in the Prospectus.
(r) KPMG LLP, who have expressed their opinion with respect to
the Company's audited consolidated financial statements and schedule as
of December 28, 2002, and December 29, 2001, and for each of the fiscal
years in the three-year period ended December 28, 2002 incorporated by
reference in the Registration Statement and the Prospectus, were, at the
time each such opinion was issued, independent public or certified
public accountants within the meaning of Regulation S-X under the
Securities Act and the Exchange Act.
(s) There has not been any Company Material Adverse Effect since
the date of the latest quarterly financial statements, if any, included
or incorporated by reference in the Prospectus, otherwise than as set
forth or contemplated in the Prospectus.
(t) The Company is not an "open-end investment company, unit
investment trust or face-amount certificate company" within the meaning
of the Investment Company Act
6
of 1940, as amended, and the rules and regulations of the Commission
thereunder (the "INVESTMENT COMPANY ACT").
2. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Company agrees to sell to the Underwriters, and
the Underwriters agree, severally and not jointly, to purchase from the
Company, at a purchase price of 98.698% of the principal amount thereof
plus accrued interest from the Closing Date, the respective principal
amounts of the Notes set forth opposite the names of the several
Underwriters in Schedule A hereto.
(b) Delivery of a certificate or certificates for the Notes in
global form to be purchased by the Underwriters and payment therefor
shall be made at the offices of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ (or
such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m., New York City time, on November 17, 2003,
or such other time and date as the Underwriters shall designate by
notice to the Company (the time and date of such closing are called the
"CLOSING DATE"). Such certificate or certificates shall be in such
denominations as the Representatives shall have requested at least two
full business days prior to the Closing Date and a form thereof shall be
made available for inspection on the business day preceding the Closing
Date at a location in New York City, as the representatives may
designate. Notes issued in book-entry form will be issued in the name of
Cede & Co., as nominee of The Depository Trust Company (the
"DEPOSITARY"), pursuant to a Letter of Representations, to be dated as
of the Closing Date, among the Company, the Trustee and the Depositary.
(c) The Representatives hereby advise the Company that the
Underwriters intend to offer for sale to the public, as described in the
Prospectus, their respective portions of the Notes as soon after this
Agreement has been executed as the Representatives, in their sole
judgment, have determined is advisable and practicable.
(d) Payment for the Notes shall be made at the Closing Date by
wire transfer of immediately available funds to the order of the
Company. It is understood that the Representatives have been authorized,
for their own account and the accounts of the several Underwriters, to
accept delivery of and receipt for, and make payment of the purchase
price for, the Notes the Underwriters have agreed to purchase. Deutsche
Bank Securities Inc., individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any
Notes to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the Closing Date for the account of
such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
(e) The Company shall deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters a
certificate or certificates for the Notes at the Closing Date, against
the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. Time shall be of
the
7
essence, and delivery at the time and place specified in this Agreement
is a further condition to the obligations of the Underwriters.
3. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) During such period beginning on the date hereof and ending on
the later of the Closing Date or such date as, in the opinion of counsel
for the Underwriters, the Prospectus is no longer required by law to be
delivered in connection with sales by an Underwriter or dealer (the
"PROSPECTUS DELIVERY PERIOD"), prior to amending or supplementing the
Registration Statement (including any registration statement filed under
Rule 462(b) under the Securities Act) or the Prospectus (including any
amendment or supplement through incorporation by reference of any report
filed under the Exchange Act), the Company shall advise the
Representatives promptly of any proposal to amend or supplement the
Prospectus and shall furnish to the Representatives a copy of each such
proposed amendment or supplement and afford the Representatives a
reasonable opportunity for review and comment, which shall in any case
not be longer than three business days, and the Company shall not file
any such proposed amendment or supplement to which the Representatives
reasonably object.
(b) After the date of this Agreement, the Company shall promptly
advise the Representatives in writing (i) of the receipt of any comments
of, or requests for additional or supplemental information from, the
Commission, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment
or supplement to the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective
and (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of
the Prospectus, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. Additionally, the
Company agrees that it shall comply with the provisions of Rules 424(b),
430A and 434, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company under
such Rule 424(b) were received in a timely manner by the Commission.
(c) If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances existing at the time such event shall
have occurred or such condition shall exist, not misleading, or if in
the opinion of the Representatives or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply with
law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances existing at the time such
event shall have occurred
8
or such condition shall exist, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
(d) The Company agrees to furnish the Representatives, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto, in each case, as
soon as available and in such quantities as the Representatives may
reasonably request.
(e) The Company shall cooperate with the Representatives and
counsel for the Underwriters to qualify or register the Notes for sale
under (or obtain exemptions from the application of) the state
securities or Blue Sky laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Notes. The Company shall not be
required to qualify to do business in any such jurisdiction where it is
not presently so qualified or to take any action that would subject it
to general service of process in any such jurisdiction where it is not
presently so subject. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Notes for offering, sale or trading
in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement (which need not be audited) that satisfies the provisions of
Section 11(a) of the Securities Act.
(g) During the period commencing on the date hereof and ending on
the Closing Date, the Company will not, without the prior written
consent of the Representatives (which consent may be withheld at the
sole discretion of the Representatives), directly or indirectly, sell,
offer, contract or grant any option to sell, pledge, transfer or
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any debt securities of the Company similar
to the Notes or securities exchangeable for or convertible into debt
securities similar to the Notes (other than as contemplated by this
Agreement with respect to the Notes).
(h) The Company will take such steps as shall be necessary to
ensure that it will not be or become an "open-end investment company,
unit investment trust or face-amount certificate company" within the
meaning of the Investment Company Act.
(i) In connection with the offering, until the Representatives
shall have notified the Company and the other Underwriters of the
completion of the distribution of the Notes, neither the Company nor any
of its affiliates has or will, either alone or with one or more other
persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest in any Notes or attempt to induce
any person to
9
purchase any Notes; and neither the Company nor any of its affiliates
will make bids or purchases for the purpose of creating actual, or
apparent, active trading in, or of raising the price of, the Notes.
The Representatives, on behalf of the several Underwriters, may, in
their sole discretion, waive in writing the performance by the Company of any
one or more of the foregoing covenants or extend the time for their performance.
4. Payment of Expenses. In addition to the payment of the expenses
contemplated by the last sentence of Section 3(c), the Company will pay all
expenses incidental to the performance of its obligations under this Agreement,
the Indenture and the Notes, including (i) the fees and expenses of the Trustee
and its professional advisers; (ii) the fees and expenses of the Company's
accountants and professional advisors; (iii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Notes;
(iv) all expenses in connection with the preparation, printing and delivery of
the Registration Statement, this Agreement, the Indenture, the Prospectus and
amendments and supplements thereto and any other document relating to the
issuance, offer, sale and delivery of the Notes; (v) any expenses (including
fees and disbursements of counsel) incurred in connection with qualification of
the Notes for sale under the laws of such United States jurisdictions as the
Representatives designate and the printing of memoranda relating thereto; (vi)
the filing fees incident to, and the fees and expenses of counsel for the
Underwriters in connection with, if any, the review and approval by the National
Association of Securities Dealers, Inc. (the "NASD") of the Underwriters'
participation in the offering and distribution of the Notes; (vii) any fees
charged by investment rating agencies for the rating of the Notes; and (viii)
expenses incurred in distributing any preliminary prospectus, the Prospectus and
any amendments and supplements thereto to the Underwriters. The Company will
also pay or reimburse the Underwriters (to the extent incurred by them) for all
reasonable travel expenses of the Underwriters and the Company's officers and
employees and any other expenses of the Underwriters and the Company in
connection with attending or hosting meetings with prospective purchasers of the
Notes from the Underwriters.
5. Conditions to the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Notes are subject to the
accuracy of the representations and warranties on the part of the Company
hereunder, to the accuracy of the statements of the managing directors or
officers of the Company made pursuant to the provisions herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) For the period from and after effectiveness of this Agreement
and prior to the Closing Date:
(i) The Company shall have filed the Prospectus with the
Commission in the manner and within the time period required by
Rule 424(b) under the Securities Act;
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement,
or any post-effective amendment to the
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Registration Statement shall be in effect and no proceedings for
such purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(b) The Underwriters shall have received a letter, dated the date
hereof, of KPMG LLP confirming that they are independent public
accountants with respect to the Company under Rule 101 of the American
Institute of Certified Public Accountant's Code of Professional Conduct
and its interpretations and rulings and to the effect that:
(i) in their opinion the consolidated financial statements and
financial statement schedules of the Company and its subsidiaries
audited by them and included or incorporated by reference in the
Registration Statement and the Prospectus comply as to form in
all material respects with the applicable accounting requirements
of the Securities Act and the applicable published rules and
regulations thereunder;
(ii) they have reviewed in accordance with Statement on Auditing
Standards 100 the unaudited condensed consolidated financial
statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement and the
Prospectus, and their review reports with respect thereto are
also included or incorporated by reference in the Registration
Statement and the Prospectus;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim consolidated
financial statements of the Company and its subsidiaries,
inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated financial
statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement
and the Prospectus do not comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act as they apply to
Quarterly Reports on Form 10-Q and the related published
rules and regulations thereunder;
(B) at the date of the latest available consolidated
balance sheet of the Company and its subsidiaries read by
such accountants, or at a subsequent specified date not
more than three business days prior to the date of this
Agreement, there was any new issuance of long-term debt,
any decrease in net current assets, or any decrease in
total owners' equity, as compared with amounts shown on
the latest consolidated balance sheet of the Company and
its subsidiaries included or incorporated by reference in
the Registration Statement and the Prospectus; or
11
(C) for the period from the closing date of the latest
consolidated statement of operations of the Company and
its subsidiaries included, or incorporated by reference in
the Registration Statement and the Prospectus to the
closing date of the latest available consolidated
statement of operations of the Company and its
subsidiaries read by such accountants, there were any
decreases, as compared with the corresponding period of
the previous year and with the period of corresponding
length ended the date of the latest consolidated statement
of operations of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement
and the Prospectus, in consolidated net revenues,
operating income, income before taxes or net income;
except, in all cases set forth in clauses (B) and (C) above, for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
of the Company and its subsidiaries contained in the Registration
Statement and the Prospectus (in each case to the extent that
such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records of
the Company and its subsidiaries and other procedures specified
in such letter and have found such dollar amounts, percentages
and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole which, in the judgment of a majority
in interest of the Underwriters including the Representatives, is
material and adverse and makes it impractical or inadvisable to proceed
with completion of the offering or the sale of and payment for the
Notes; (ii) any downgrading in the rating of any debt securities of the
Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), or
any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating); (iii) any change in U.S. or international financial, political
or economic conditions or currency exchange rates or exchange controls
as would, in the judgment of a majority in interest of the Underwriters
including the Representatives, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Notes,
whether in the primary market or in respect of dealings in the secondary
market; (iv) any material suspension or material limitation of trading
in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of
trading of any
12
securities of the Company on any exchange or in the over-the-counter
market; (v) any banking moratorium declared by U.S. Federal or New York
authorities; (vi) any major disruption of settlements of securities or
clearance services in the United States or (vii) any attack on, outbreak
or escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representatives, the effect
of any such attack, outbreak, escalation, act, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion
of the offering or sale of and payment for the Notes.
(d) The Underwriters shall have received an opinion, dated the
Closing Date, of Proskauer Rose LLP, special counsel to the Company,
that:
(i) The Company is a validly existing limited liability company
in good standing under the laws of the State of Delaware.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and
delivered by the Company, and, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws relating to creditors' rights generally, by general
principles of equity (regardless of whether enforcement is sought
in equity or law), including principles regarding good faith and
fair dealing, or by the discretion of any court before which any
proceeding therefor may be brought.
(iv) The Notes have been duly authorized, executed and issued by
the Company and, when the Notes are authenticated by the Trustee
in accordance with the Indenture and delivered to and paid for by
the Underwriters in accordance with this Agreement, will
constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
and will be entitled to the benefits of the Indenture, except as
such enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws relating to creditors' rights generally, by general
principles of equity (regardless of whether enforcement is sought
in equity or law), including principles regarding good faith and
fair dealing, or by the discretion of any court before which any
proceeding therefor may be brought.
(v) The Registration Statement (including any Rule 462(b)
Registration Statement) has been declared effective by the
Commission under the Securities Act. To the best knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement (or such Rule 462(b) Registration
Statement) has been issued under the Securities Act and no
proceedings for such
13
purpose have been instituted or are pending or are contemplated
or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b)
under the Securities Act has been made in the manner and within
the time period required by such Rule 424(b).
(vi) The Registration Statement, the Prospectus, including any
document incorporated by reference therein, and each amendment or
supplement to the Registration Statement and the Prospectus,
including any document incorporated by reference therein (other
than the financial statements and supporting schedules and other
financial or statistical data included or incorporated by
reference therein or in exhibits to or excluded from the
Registration Statement, as to which no opinion need be rendered),
when they became effective or were filed with the Commission, as
the case may be, complied as to form in all material respects
with the applicable requirements of the Securities Act, the
Exchange Act and the Trust Indenture Act.
(vii) Such counsel has considered the statements in the
Prospectus relating to legal matters and documents referred to
under the captions "Description of the Notes" in each of the
prospectus supplement dated November 12, 2003 (the "PROSPECTUS
SUPPLEMENT") and in the base prospectus dated September 5, 2003
(the "BASE PROSPECTUS"). In such counsel's opinion, such
statements when taken together fairly summarize in all material
respects such legal matters and documents.
(viii) Such counsel has considered the statements in the
Prospectus under the caption "Certain United States Federal Tax
Consequences." In such counsel's opinion, such statements,
insofar as such statements purport to summarize certain United
States federal income tax laws as they relate to Non-U.S. Holders
(as defined in the Prospectus under the caption "Certain United
States Federal Tax Consequences"), constitute a fair summary of
the principal United States federal income tax consequences to
Non-U.S. Holders of an investment in the Notes.
(ix) The Company is not and, after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof
as described under the captions "Use of Proceeds" in each of the
Prospectus Supplement and the Base Prospectus, will not be
required to be registered as an "investment company" as such term
is defined in the Investment Company Act.
In addition, such counsel shall state that in the course of
assisting the Company in the preparation of the Registration
Statement and the Prospectus, such counsel has participated in
conferences with officers, inside counsel and other
representatives of the Company, representatives of the
independent public accountants for the Company and
representatives of the Underwriters at which conferences the
contents of the Registration Statement, any
14
preliminary prospectus, the Prospectus and any amendments or
supplements thereto and related matters were discussed, and
(without taking further action to verify independently the
accuracy or completeness of the statements made in the
Registration Statement, any preliminary prospectus or the
Prospectus and without assuming responsibility for the accuracy,
completeness or fairness of such statements, except, in each
case, to the extent of the statements referred to in clauses
(vii) and (viii) above) nothing has come to the attention of such
counsel that causes such counsel to believe that either the
Registration Statement or any amendments thereto, at the time the
Registration Statement or most recent post-effective amendment to
the Registration Statement (including the filing of the Company's
Annual Report on Form 10-K with the Commission) became effective,
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements made therein not misleading, or the
Prospectus, as of its date or as of the Closing Date, contained
or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements
made therein, in light of the circumstances in which they were
made, not misleading (it being understood that such counsel is
therewith making no statement with respect to (a) the
Underwriters' Information or (b) the financial statements and
supporting schedules and other financial or statistical data
included in, incorporated by reference in or omitted from the
Registration Statement or the Prospectus).
(e) The Underwriters shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ ▇. ▇▇▇▇, Managing Director-Delegatee of the
Company and Vice President, Senior Deputy General Counsel and Assistant
Secretary of The Pepsi Bottling Group, Inc. or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Managing Director of the Company and Senior Vice President, General
Counsel and Secretary of The Pepsi Bottling Group, Inc., that:
(i) The Company has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the
State of Delaware; the Company has the limited liability company
power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement, the
Indenture and the Notes; and the Company is duly qualified as a
foreign limited liability company to transact business and is in
good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result
in a Company Material Adverse Effect.
(ii) All of the issued limited liability company membership
interests of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and are owned
directly or indirectly by PepsiCo, Inc. and The Pepsi Bottling
Group, Inc., and, to the best of such counsel's knowledge, free
and clear of all liens, encumbrances, equities, or claims.
(iii) The Company is not (A) in violation of its certificate of
formation or limited liability company agreement or (B) in
default in the performance or observance of any Agreement and
Instrument, except, in the case of clause (B), for such defaults
that would not result in a Company Material Adverse Effect.
15
(iv) The execution and delivery of and performance by the Company
of its obligations under this Agreement, the Indenture and the
Notes, and the consummation of the transactions contemplated
herein and therein and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by
all necessary limited liability company action and will not
contravene any provision of the certificate of formation or
limited liability company agreement of the Company or of any
contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument binding upon the Company that is
material to the Company and its subsidiaries taken as a whole,
or, to such counsel's knowledge after due inquiry, of any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any of its
subsidiaries.
(v) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement, the Indenture or the Notes in connection with the
issuance and sale of the Notes by the Company, except as required
under the Securities Act, the Trust Indenture Act, applicable
state securities or Blue Sky laws or from the NASD.
(vi) There is no legal or governmental proceeding pending or
threatened, or to such counsel's knowledge after due inquiry,
contemplated, no statute or regulation, and no agreement,
instrument or other document to which, in any case, the Company
is a party, or by which, in any case, any of the properties of
the Company is bound, that is required to be described in the
Registration Statement or the Prospectus that is not so described
as required.
(f) The Underwriters shall have received from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinions or
letters, dated the Closing Date, with respect to the validity of the
Notes, the Prospectus and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(g) The Underwriters shall have received a certificate, dated the
Closing Date, of a Managing Director or Managing Director-Delegatee of
the Company stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of the Closing Date, and the
Company has complied with all its agreements contained herein;
(ii) To the best of his or her knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued under the Securities Act and no proceedings for such
purpose have been instituted or are pending or are contemplated
or threatened by the Commission;
(iii) To the best of his or her knowledge, there has not been any
Company Material Adverse Effect, except as described in the
Prospectus; and
16
(iv) To his or her knowledge, after due inquiry, (A) the
Prospectus, as of its date and as of the date of such
certificate, did not and does not include any untrue statement of
a material fact and does not omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
with respect to the Underwriters' Information, and (B) since the
date of the Prospectus, no event has occurred which should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(h) The Underwriters shall have received a letter, dated the
Closing Date, of KPMG LLP which meets the requirements of subsection (a)
of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection (h).
The Company will furnish the Underwriters with such conformed copies of
such opinions, certificates, letters and documents as the Underwriters may
reasonably request. The Representatives may in their sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder.
6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person, if
any, who controls such Underwriter within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under
the Securities Act or the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any breach of any of the representations
and warranties of the Company contained herein or any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein not misleading,
including any losses, claims, damages or liabilities arising out of or
based upon the Company's failure to perform its obligations under
Section 3(c) of this Agreement, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents with respect to the
Underwriters' Information. The foregoing indemnity with respect to any
untrue statement contained in or omission from any preliminary
prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased any of the Notes that
are the subject thereof if such person was not sent or given, if legally
required to have been sent or given, a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Notes to such
17
person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented).
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company, its managing directors and officers who
signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities to which the Company
may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, any preliminary prospectus, the Prospectus
or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact necessary in order to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the Underwriters'
Information furnished in writing to the Company by such Underwriter
through the Representatives expressly for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus
furnished on behalf of each Underwriter: the statement set forth in the
last paragraph of the cover page of the Prospectus Supplement regarding
the delivery of the Notes and, under the caption "Underwriting" in the
Prospectus Supplement, the statements set forth in the first clause of
the first sentence and in the second sentence of the third paragraph,
and in the fourth paragraph following the table; the first paragraph
under "Commissions and Discounts"; the third and fourth sentences of the
first paragraph under the caption "New Issue of Notes"; the first
paragraph, the second sentence of the second paragraph and the third
paragraph (with respect only to the representations or predictions of
the Underwriters) under the caption "Price Stabilization and Short
Positions"; and the paragraph under the caption "Market Axess Inc.";
provided, however, that the Underwriters shall not be liable for any
losses, claims, damages or liabilities arising out of or based upon any
material misstatement or omission from the Underwriters' Information, if
the Underwriters had previously corrected that misstatement or omission
in writing to the Company, and the Company failed to perform its
obligations under Section 3(c) of this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; provided that, the
failure to notify the indemnifying party shall not relieve it from any
liability that it may have under subsection (a) or (b) above, except to
the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and
provided, further, that the failure to notify the indemnifying party
shall not relieve it from any liability that it may have to an
indemnified party otherwise than under subsection (a) or
18
(b) above. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein
and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party);
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of the indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election to assume
the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation, unless (i) the
indemnified party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for expenses of
more than one separate counsel (together with local counsel), approved
by the indemnifying party (the Representatives in the case of Sections
6(b) and (d), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the
fee and expenses of counsel shall be at the expense of the indemnifying
party. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action and does not include a statement
as to and an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Notes or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any
19
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Underwriters from
the Company under this Agreement. The relative fault as between the
Company on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Notes purchased by
it were resold exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective purchase obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act or the
Exchange Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters
may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act.
7. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Notes hereunder and the aggregate principal
amount of Notes that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total principal amount of Notes,
the Representatives may make arrangements satisfactory to the Company for the
purchase of such Notes by other persons, including any of the Underwriters, but
if no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Notes that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of Notes with respect to which
such default or defaults occur exceeds 10% of the total principal amount of
Notes and arrangements satisfactory to the Representatives and the Company for
the purchase of such Notes by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 8. As
used in this Agreement, the term "Underwriter" includes any
20
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its managing directors or officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers, directors or managing directors or any controlling
person, and will survive delivery of and payment for the Notes. If this
Agreement is terminated or if the purchase of the Notes by the Underwriters is
not consummated pursuant to Section 5, the Company shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Sections 3(c) and 4 and
the respective obligations of the Company and the Underwriters pursuant to
Section 6 shall remain in effect. If the purchase of the Notes by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 7 or the occurrence of any
event specified in clause (iii), (iv) (other than with respect to the securities
of the Company), (v), (vi) or (vii) of Section 5(c), the Company will reimburse
the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Notes. If the purchase of the Notes by the Underwriters is not
consummated because of the termination of this Agreement pursuant to Section 7
or the occurrence of any event specified in clause (iii), (iv) (other than with
respect to the securities of the Company), (v), (vi) or (vii) of Section 5(c),
the Company shall not be responsible for the expenses of the Underwriters.
9. Notices. All communications hereunder will be in writing and, (a) if
sent to the Underwriters will be mailed, delivered or telegraphed and confirmed
to the Underwriters, c/o Citigroup Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel; Credit Suisse First Boston LLC,
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Transactions Advisory
Group; and Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Debt Capital Markets or (b) if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at c/o The Pepsi Bottling
Group, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, with a
copy to Proskauer Rose LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; provided, however, that any notice to an
Underwriter pursuant to Section 6 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. Representation of Underwriters. You will act for the several
Underwriters in connection with this purchase, and any action under this
Agreement taken by you jointly or by Citigroup Global Markets Inc., Credit
Suisse First Boston LLC or Deutsche Bank Securities Inc. alone will be binding
upon all the Underwriters.
21
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
22
If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
BOTTLING GROUP, LLC
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇: Managing Director-Delegatee
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
Acting on behalf of themselves
and as the Representatives of
the several Underwriters
By: CITIGROUP GLOBAL MARKETS INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Vord
______________________________
Name: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Title: Managing Director
By: CREDIT SUISSE FIRST BOSTON LLC
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
By: DEUTSCHE BANK SECURITIES INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
SCHEDULE A
PRINCIPAL AMOUNT OF
UNDERWRITER NOTES
----------- -------------------
Citigroup Global Markets Inc............................................ $ 93,334,000
Credit Suisse First Boston LLC.......................................... 93,333,000
Deutsche Bank Securities Inc............................................ 93,333,000
Banc of America Securities LLC. ........................................ 36,800,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ........................................... 36,800,000
▇▇▇▇▇▇ Brothers Inc. ................................................... 36,800,000
The Bank of New York Company, Inc. ..................................... 4,800,000
▇▇▇▇▇▇▇▇ & Partners, L.P. .............................................. 4,800,000
------------
Total $400,000,000
============
A-1