EXHIBIT 1.1
$500,000,000
BOTTLING GROUP, LLC
2.45% SENIOR NOTES DUE 2006
UNDERWRITING AGREEMENT
October 2, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ Brothers Inc.
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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 Banc of America Securities LLC, ▇.▇. ▇▇▇▇▇▇ Securities
Inc. and ▇▇▇▇▇▇ Brothers Inc. are acting as representatives (the
"REPRESENTATIVES"), U.S.$500,000,000 aggregate principal amount of its 2.45%
Senior Notes due October 16, 2006 (the "NOTES") to be issued under an indenture
(the "INDENTURE") to be 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
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Annual Report on Form 10-K with the Commission (the "ANNUAL REPORT ON
FORM 10-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.
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(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized and, when duly executed and
delivered by the Company (assuming due authorization, valid execution
and delivery thereof by the Trustee), will constitute 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
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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 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.
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(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 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.
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(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 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 99.65% 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 October 7, 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. Banc of America Securities LLC, 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
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available funds for the amount of the purchase price therefor. Time
shall be of the 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
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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
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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 October 2, 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 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
14
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 Cleary,
Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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
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
third paragraph under the caption "Other Relationships"; 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 a 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 Banc of America Securities LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Transaction Management; ▇.▇.
▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Transaction Execution Group; and ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Debt Capital Markets, Consumer
Products Group; 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 a 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 Banc of America Securities LLC, ▇.▇. ▇▇▇▇▇▇
Securities Inc. or ▇▇▇▇▇▇ Brothers 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: ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
Title: Managing Director-Delegatee
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ BROTHERS INC.
Acting on behalf of themselves
and as the Representatives of
the several Underwriters
By: BANC OF AMERICA SECURITIES LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By: ▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE A
PRINCIPAL AMOUNT OF
UNDERWRITER NOTES
----------- -----
Banc of America Securities LLC..................... $125,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc......................... 125,000,000
▇▇▇▇▇▇ Brothers Inc................................ 125,000,000
Citigroup Global Markets Inc....................... 37,000,000
Credit Suisse First Boston LLC..................... 37,000,000
Deutsche Bank Securities Inc....................... 37,000,000
Banco Bilbao Vizcaya Argentaria.................... 7,000,000
The ▇▇▇▇▇▇▇▇ Capital Group, L.P.................... 7,000,000
------------
Total $500,000,000
============
A-1