Exhibit 1
THE PEPSI BOTTLING GROUP, INC.
(a Delaware corporation)
85,000,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: , 1999
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THE PEPSI BOTTLING GROUP, INC.
(a Delaware corporation)
85,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
,1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers Inc.
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx X. Xxxxxxxxx & Co., Inc.
Xxxxxxxx & Co. Inc.
as U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The Pepsi Bottling Group, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the other U.S. Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters", which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Xxxxxxx Xxxxx, Xxxxxx Xxxxxxx & Co. Incorporated,
Bear, Xxxxxxx & Co. Inc., Credit Suisse First Boston Corporation, Xxxxxxx, Xxxxx
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& Co., Xxxxxx Brothers Inc, NationsBanc Xxxxxxxxxx Securities LLC, Xxxxxxx Xxxxx
Barney Inc., Xxxxxxx X. Xxxxxxxxx & Co., Inc. and Xxxxxxxx & Co. Inc. are acting
as representatives (in such capacity, the "U.S. Representatives"), with respect
to the issue and sale by the Company and the purchase by the U.S. Underwriters,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock") set forth
in said Schedule A, and with respect to the grant by the Company to the U.S.
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 12,750,000 additional shares
of Common Stock to cover over- allotments, if any. The aforesaid 85,000,000
shares of Common Stock (the "Initial U.S. Securities") to be purchased by the
U.S. Underwriters and all or any part of the 12,750,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "U.S. Option
Securities") are hereinafter collectively called the "U.S. Securities."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 15,000,000 shares
of Common Stock (the "Initial International Securities") through arrangements
with certain underwriters outside the United States and Canada (the
"International Managers") for which Xxxxxxx Xxxxx International, Xxxxxx Xxxxxxx
& Co. International Limited, Bear, Xxxxxxx International Limited, Credit Suisse
First Boston (Europe) Limited, Xxxxxxx Xxxxx International, Xxxxxx Brothers
International (Europe), Salomon Brothers International Limited, J. Xxxxx
Xxxxxxxx & Co. Limited and UBS AG are acting as lead managers (the "Lead
Managers") and the grant by the Company to the International Managers, acting
severally and not jointly, of an option to purchase all or any part of the
International Managers' pro rata portion of up to 2,250,000 additional shares of
Common Stock solely to cover overallotments, if any (the "International Option
Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International Option
Securities are hereinafter called the "International Securities." It is
understood that the Company is not obligated to sell and the U.S. Underwriters
are not obligated to purchase, any Initial U.S. Securities unless all of the
Initial International Securities are contemporaneously purchased by the
International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (in
such capacity, the "Global Coordinator").
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The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
The Company and the U.S. Underwriters agree that up to [850,000] shares of
the Initial U.S. Securities to be purchased by the U.S. Underwriters (the
"Reserved Securities") shall be reserved for sale by the Underwriters to certain
eligible officers and directors of the Company (collectively, the "Reserved
Securities Participants"), as part of the distribution of the Securities by the
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. (the "NASD") and all other applicable laws, rules and regulations.
To the extent that such Reserved Securities are not orally confirmed for
purchase by such eligible employees and persons having business relationships
with the Company by the end of the first business day after the date of this
Agreement, such Reserved Securities may be offered to the public as part of the
public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-70291) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. Two forms of prospectus are to be used in connection
with the offering and sale of the Securities: one relating to the U.S.
Securities (the "Form of U.S. Prospectus") and one relating to the International
Securities (the "Form of International Prospectus"). The Form of International
Prospectus is identical to the Form of U.S. Prospectus, except for the front
cover and back cover pages and the information under the caption "Underwriting."
The information included in any such prospectus that was omitted from such
registration statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information." Each Form
of U.S. Prospectus and Form of International Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of U.S. Prospectus and the final Form of
International Prospectus in the forms first furnished to the Underwriters for
use in connection with the offering of the Securities are herein called the
"U.S. Prospectus" and the "International Prospectus," respectively, and
collectively, the "Prospectuses." For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the U.S. Prospectus
or the International
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Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b), hereof and agrees with each U.S. Underwriter,
as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations 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, and the Prospectuses, any
preliminary prospectuses and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance
and at the Closing Time, complied and will comply in all material respects
with any applicable laws or regulations of any state in which the
Prospectuses and such preliminary prospectuses, as amended or
supplemented, if applicable, are distributed in connection with the offer
and sale of Reserved Securities. Neither of the Prospectuses nor any
amendments or supplements thereto (including any prospectus wrapper), at
the time the Prospectuses or any amendments or supplements thereto were
issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will 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 in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
relating to the Underwriters furnished to the Company in writing by any
Underwriter expressly for use in the Registration Statement or the
Prospectuses.
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Each preliminary prospectus and the prospectuses 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 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses delivered
to the Underwriters for use in connection with this offering were
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
The Company has filed a registration statement pursuant to
Section 12(b) of the Securities Exchange Act of 1934 (the "1934 Act"), to
register the Common Stock, and such registration statement has been
declared effective.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The combined financial statements
included in the Registration Statement and the Prospectuses, together with
the related schedules and notes, present fairly the financial position of
the Company and its combined subsidiaries at the dates indicated and the
combined statement of operations, stockholder's equity and cash flows of
the Company and its combined subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectuses
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement. The pro forma financial statements and the
related notes thereto included in the Registration Statement and the
Prospectuses present fairly the information shown therein, have been
prepared on a basis consistent with the Commission's rules and guidelines
with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise disclosed therein, (A)
there has been no material adverse change (or development involving a
prospective material adverse change) in the financial condition, earnings,
business or properties of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its
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subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified as
a foreign corporation 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 Effect.
(vi) GOOD STANDING OF SUBSIDIARIES. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
limited liability company, corporation, limited partnership or general
partnership in good standing under the laws of the jurisdiction of its
organization, has the requisite power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign limited liability company,
corporation, limited partnership or general partnership to transact
business and is in good standing in each 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
Effect; except as otherwise described in the Registration Statement and
except as would not result in a Material Adverse Effect, all of the issued
and outstanding capital stock of each Subsidiary that is a corporation has
been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through Subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock, limited
liability company interests or partnership interests of any of the
Subsidiaries was issued in violation of any preemptive or similar rights
arising by operation of law, or under the charter, by-laws, certificate of
formation, limited liability company agreement, partnership agreement, or
other organizational documents of any Subsidiary or under any agreement to
which the Company or any Subsidiary is a party. The only subsidiaries of
the Company are the subsidiaries listed on Exhibit 21 to the Registration
Statement.
(vii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses under the
caption "Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectuses or
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pursuant to the exercise of convertible securities or options referred to
in the Prospectuses). The shares of issued and outstanding capital stock
of the Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement and the
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The
Securities to be purchased by the U.S. Underwriters and the International
Managers from the Company have been duly authorized for issuance and sale
to the U.S. Underwriters pursuant to this Agreement and the International
Managers pursuant to the International Purchase Agreement, respectively,
and, when issued and delivered by the Company pursuant to this Agreement
and the International Purchase Agreement, respectively, against payment of
the consideration set forth herein and the International Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock and the Class B Common Stock, par value
$.01 per share, of the Company (the "Class B Common Stock") conform in all
material respects to the description thereof contained in the Prospectuses
under the caption "Description of Capital Stock" and such description
conforms in all material respects to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject
to personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar rights
of any securityholder of the Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor
any of its Subsidiaries is in violation of its charter, by-laws,
certificate of formation, limited liability company agreement, partnership
agreement, or other organizational documents or 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 or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (collectively, "Agreements and
Instruments"), except for such violations or defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the International Purchase Agreement and
the consummation of the transactions contemplated in this Agreement, the
International Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectuses
under the caption "Use of Proceeds" and the separation of the Company from
PepsiCo, Inc. (the "Separation") as contemplated by the Separation
Agreement (as defined in the Prospectuses)) and compliance by the Company
with its obligations under this Agreement and the International Purchase
Agreement have been duly authorized by all necessary
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corporate 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 or any Subsidiary pursuant to,
the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
(i) the provisions of the charter, by-laws, certificate of formation,
limited liability company agreement, partnership agreement, or other
organizational documents of the Company or any Subsidiary or (ii) 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 subsidiary or any of
their assets, properties or operations (except, in the case of clause
(ii), for such violations that would not result in a 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 Subsidiary.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any subsidiary 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 its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in any case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) INTERCOMPANY AGREEMENTS. Each of the Separation
Agreement, the Pepsi Beverage Agreements, the Shared Services Agreement,
the Employee Programs Agreement and the Tax Separation Agreement (each as
defined in the Prospectuses) has been duly authorized, executed and
delivered by the Company and its subsidiaries, as applicable, and
constitutes the binding agreement of such party, enforceable against such
party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
(xiii) ABSENCE OF PROCEEDINGS. Except as described in the
Prospectuses, 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 the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which is reasonably expected to result in a
Material Adverse Effect, or which is reasonably expected to materially and
adversely affect the consummation of the transactions contemplated in this
Agreement and the International Purchase Agreement or the
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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 subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental
to the business, is not reasonably expected to result in a Material
Adverse Effect.
(xiv) EXHIBITS. There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectuses
or to be filed as exhibits thereto which have not been so described and
filed as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own, possess or hold 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 them, and neither the Company nor any of its
subsidiaries has received any notice or is 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 or any of its subsidiaries therein, and which
infringement or conflict could reasonably be expected to, or which
invalidity or inadequacy, singly or in the aggregate, would result in, a
Material Adverse Effect.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement, except (i) such as
have been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations and foreign or state securities or blue sky laws and
(ii) such as have been obtained under the laws and regulations of
jurisdictions in which the Reserved Securities are offered.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess 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 them, except where the
failure to so possess such Governmental Licenses would not, singly or in
the aggregate, have a Material Adverse Effect; the Company and its
subsidiaries are 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,
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have a 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 Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses, the resolution of which, singly or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(xviii) INVESTMENT COMPANY ACT. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xix) ENVIRONMENTAL LAWS. The Company has reasonably concluded
that there are no costs or liabilities associated with any and all
applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, result in a Material
Adverse Effect.
(xx) REGISTRATION RIGHTS. Except as disclosed in the
Prospectuses, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xxi) MARKET DATA. The statistical and market-related data
included in the Prospectuses are based on or derived from reliable
sources.
(xxii) YEAR 2000. The Company has reviewed its operations and
those of its subsidiaries to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be affected by
the Year 2000 Problem; as a result of such review, the Company believes
that the disclosure in the Prospectuses relating to the Year 2000 Problem
is accurate in all material respects. As used in this clause (xxii) the
"Year 2000 Problem" means any significant risk that computer hardware or
software used in the receipt, transmission, processing, manipulation,
storage, retrieval, transmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will not, in the
case of dates or time periods occurring after December 31, 1999, function
at least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
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(xxiii) NO STABILIZATION OR MANIPULATION. The Company has not
taken and will not take, directly or indirectly, any action designed to,
or that might be reasonably expected to, cause or result in stabilization
or manipulation of the price of the Securities in violation of Regulation
M under the 1934 Act.
(b) REPRESENTATIONS AND WARRANTIES BY PEPSICO, INC. PepsiCo, Inc.
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of the Date of
Delivery (if any) referred to in Section 2(b) hereof and agrees with each U.S.
Underwriter, as follows:
(i) REGISTRATION STATEMENT. At the respective times the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendments thereto became effective and at the Closing Time
(and, if any U.S. Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto 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. Neither of the Prospectuses nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectuses or any amendments or supplements thereto were issued and at
the Closing Time (and, if any U.S. Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will 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 in this subsection shall only apply to statements in or
omissions from the Registration Statement or the Prospectuses relating to
PepsiCo, Inc.
(ii) AUTHORIZATION OF AGREEMENT. This Agreement and the
International Purchase Agreement have been duly authorized, executed and
delivered by PepsiCo, Inc.
(iii) INTERCOMPANY AGREEMENTS. Each of the Separation
Agreement, the Pepsi Beverage Agreements, the Shared Services Agreement,
the Employee Programs Agreement and the Tax Separation Agreement has been
duly authorized, executed and delivered by PepsiCo, Inc. and constitutes
the binding agreement of PepsiCo, Inc., enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings
in equity or at law).
(iv) ABSENCE OF DEFAULTS AND CONFLICTS. The execution, delivery and
performance of this Agreement and the International Purchase Agreement and
the consummation of the transactions contemplated in this Agreement, the
International Purchase Agreement and in the Registration Statement
(including the Separation) and compliance by PepsiCo, Inc. with its
obligations under this Agreement and the
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International Purchase Agreement have been duly authorized by all
necessary corporate 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 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 PepsiCo, Inc. is a
party or by which it may be bound, or to which any of the property or
assets of PepsiCo, Inc. is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
material adverse change (or development involving a prospective material
adverse change) in the financial condition, earnings, business or
properties of PepsiCo, Inc., whether or not arising in the ordinary course
of business), nor will such action result in any violation of the
provisions of the certificate of incorporation or bylaws of PepsiCo, Inc.
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over PepsiCo, Inc. or any of its assets,
properties or operations. 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 PepsiCo, Inc.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each U.S. Underwriter, severally and not jointly, and
each U.S. Underwriter, severally and not jointly, agrees to purchase from the
Company, at the price per share set forth in Schedule B, the number of Initial
U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter, plus any additional number of Initial U.S. Securities which such
U.S. Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 12,750,000 shares of
Common Stock at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection
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with the offering and distribution of the Initial U.S. Securities upon notice by
the Global Coordinator to the Company setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery for the U.S. Option Securities (a
"Date of Delivery") shall be determined by the Global Coordinator, but shall not
be later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the U.S. Option Securities, each of the
U.S. Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter bears to the total number of Initial U.S.
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 919 Third Avenue, New York, New York,
or at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
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(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company and, with respect to
paragraph (j) below, PepsiCo, Inc., covenant with each U.S. Underwriter as
follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Global Coordinator or counsel for the U.S.
Underwriters shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has
furnished or will deliver to the U.S. Representatives and counsel for the
U.S. Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each
14
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the U.S. Representatives, without
charge, a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to
each U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S. Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each U.S. Underwriter, without
charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the Securities Exchange Act of 1934 (the
"1934 Act"), such number of copies of the U.S. Prospectus (as amended or
supplemented) as such U.S. Underwriter may reasonably request. The U.S.
Prospectus and any amendments or supplements thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated in
this Agreement, the International Purchase Agreement and in the
Prospectuses. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the U.S. Underwriters or for the Company, to
amend the Registration Statement or amend or supplement any Prospectus in
order that the Prospectuses will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement any Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish
to the U.S. Underwriters such number of copies of such amendment or
supplement as the U.S. Underwriters may reasonably request; provided that
the U.S. Underwriters shall bear all expenses of the Company incurred
pursuant to this clause (e) on or after the 9 month anniversary of this
Agreement.
15
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the U.S. Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds."
(i) LISTING. The Company will use its best efforts to effect
the listing of the Common Stock (including the Securities) on the New York
Stock Exchange.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 180
days from the date of the Prospectuses (the "Lock-up Period"), the Company
and PepsiCo, Inc. will not, without the prior written consent of the
Global Coordinator, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of any share of Common
Stock, Class B Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or Class B Common Stock or
file any registration statement under the 1933 Act with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock or the Class B
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock, Class B Common
Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or
under the International Purchase Agreement, (B) the grant of any shares of
Common Stock or options under the PBG Long-Term Incentive Plan (the
"LTIP"), provided, however, that
16
any person receiving a grant of shares of Common Stock under the LTIP
during the Lockup Period shall enter into a in a lock-up agreement with
respect to such shares substantially in the form of Exhibit C hereto , (C)
grants of options to purchase common stock made as of the Closing Date to
certain executive officers and directors of the Company and the grant of
any option pursuant to the "founder's grant," in each case, as
contemplated by the Prospectuses or (D) any shares of Common Stock issued
by the Company upon the exercise of an option or warrant or the conversion
of a security outstanding on the date hereof and referred to in the
Prospectuses.
(k) REPORTING REQUIREMENTS. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the rules and regulations of the Commission thereunder.
(l) COMPLIANCE WITH NASD RULES. The Company hereby agrees that
it will ensure that the Reserved Securities will be restricted as required
by the NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which persons
will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer
restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the
Reserved Securities, the Company agrees to reimburse the Underwriters for
any reasonable expenses (including, without limitation, legal expenses)
they incur in connection with such release.
(m) COMPLIANCE WITH RULE 463. The Company will file with the
Commission such information regarding the use of the net proceeds from the
sale of the Securities as may be required pursuant to Rule 463 of the 1933
Act Regulations.
SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto except as provided in Section 3(e), (ii) the preparation,
printing and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and
17
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectuses and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the
Securities (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the NASD of the terms of the sale of the Securities, (x) the fees and expenses
incurred in connection with the listing of the Securities on the New York Stock
Exchange and (xi) the fees and disbursements of counsel for the Underwriters in
connection with matters related to the Reserved Securities which are designated
by the Company for sale to Reserved Securities Participants.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
SECTION 5. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The obligations
of the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and PepsiCo, Inc. contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
U.S. Underwriters. A prospectus containing the Rule 430A Information shall
have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A).
(b) OPINION OF COUNSEL FOR COMPANY. At the Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as
of Closing Time, of each of (i) Xxxxx Xxxx & Xxxxxxxx, counsel for the
Company, and (ii) Xxxxxx X. XxXxxxx, Esq., Senior Vice President and
General Counsel of the Company, in form and substance satisfactory to
counsel for the U.S. Underwriters, together with signed or reproduced
copies of such letters for each of the other U.S. Underwriters to the
effect set forth in Exhibits A-1 and A-2, respectively, hereto and to such
further effect as counsel
18
to the U.S. Underwriters may reasonably request. In giving such opinion
such counsel may state that, insofar as such opinions involve factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) OPINION OF COUNSEL FOR PEPSICO, INC. At the Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of Xxxxxxxx X. Xxxxxx, Esq., Associate General Counsel
for PepsiCo, Inc., in form and substance satisfactory to counsel for the
U.S. Underwriters, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the U.S.
Underwriters may reasonably request. In giving such opinion such counsel
may state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of PepsiCo, Inc. and its subsidiaries and certificates of public
officials.
(d) OPINION OF COUNSEL FOR U.S. UNDERWRITERS. At the Closing
Time, the U.S. Representatives shall have received the favorable opinion,
dated as of Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel for the U.S. Underwriters, together with signed or reproduced
copies of such letter for each of the other U.S. Underwriters in form and
substance satisfactory to the U.S. Representatives. In giving such opinion
such counsel may state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) OFFICERS' CERTIFICATE. At the Closing Time, there shall
not have been, since the date hereof or since the respective dates as of
which information is given in the Prospectuses, any material adverse
change (or development involving a prospective material adverse change) in
the financial condition, earnings, business or properties of the Company
and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, and the U.S. Representatives shall
have received a certificate of the Chief Executive Officer, President, a
Senior Vice President or an Executive Vice President of the Company and of
the chief financial or chief accounting officer of the Company, dated as
of the Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions set forth herein
or in the International Purchase Agreement or contemplated hereby or
thereby on its part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the knowledge of the Company
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
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(f) ACCOUNTANT'S COMFORT LETTER. At the time of the execution
of this Agreement, the U.S. Representatives shall have received from KPMG
LLP a letter dated such date, in form and substance satisfactory to the
U.S. Representatives, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(g) BRING-DOWN COMFORT LETTER. At the Closing Time, the U.S.
Representatives shall have received from KPMG LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (f) of this Section, except
that the specified date referred to shall be a date not more than three
business days prior to the Closing Time.
(h) APPROVAL OF LISTING. At the Closing Time, the Securities
shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(i) NO OBJECTION. The NASD shall have confirmed that it has
not raised any objection with respect to the fairness and reasonableness
of the underwriting terms and arrangements.
(j) NO DOWNGRADING. Subsequent to the execution and delivery
of this Agreement and prior to the Closing Time, there shall not have
occurred any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436 (g) (2) under the 1933 Act.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the
U.S. Representatives shall have received an agreement substantially in the
form of Exhibit C hereto signed by the persons listed on Schedule C
hereto.
(l) SEPARATION. At the Closing Time, the Company and PepsiCo,
Inc. shall have consummated the Separation.
(m) PURCHASE OF INITIAL INTERNATIONAL SECURITIES.
Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this Agreement, the International Managers
shall have purchased the Initial International Securities under the
International Purchase Agreement.
20
(n) CONDITIONS TO PURCHASE OF U.S. OPTION SECURITIES. In the
event that the U.S. Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the U.S. Option Securities,
the representations and warranties of the Company and PepsiCo, Inc.
contained herein and the statements in any certificates furnished by the
Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the U.S. Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the Chief Executive Officer, President, a Senior Vice
President or an Executive Vice President of the Company and of the
chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(e) hereof remains true and correct as of such
Date of Delivery.
(ii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of each
of Xxxxx Xxxx & Xxxxxxxx, counsel for the Company, and Xxxxxx X.
XxXxxxx, Senior Vice President and General Counsel of the Company,
in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinions required by Section
5(b) hereof.
(iii) OPINION OF COUNSEL FOR PEPSICO, INC. The favorable opinion of
Xxxxxxxx X. Xxxxxx, Esq., Associate General Counsel for PepsiCo,
Inc., in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(iv) OPINION OF COUNSEL FOR U.S. UNDERWRITERS. The favorable opinion
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(d)
hereof.
(v) BRING-DOWN COMFORT LETTER. A letter from KPMG LLP, in form and
substance satisfactory to the U.S. Representatives and dated such
Date of Delivery, substantially in the same form and substance as
the letter furnished to the U.S. Representatives pursuant to Section
5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(o) ADDITIONAL DOCUMENTS. At the Closing Time and at each Date
of Delivery, counsel for the U.S. Underwriters shall have been furnished
with such
21
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
U.S. Representatives and counsel for the U.S.
Underwriters.
(p) TERMINATION OF AGREEMENT. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of U.S. Option Securities on a Date of Delivery which is after
the Closing Time, the obligations of the several U.S. Underwriters to
purchase the relevant Option Securities, may be terminated by the U.S.
Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF U.S. UNDERWRITERS BY THE COMPANY. The Company
agrees to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information,
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (A) the violation of any
applicable laws or regulations of jurisdictions where Reserved Securities
have been offered and (B) any untrue statement or alleged untrue statement
of a material fact included in the supplement or prospectus wrapper
material distributed in any state in connection with the reservation and
sale of the Reserved Securities to Reserved Securities Participants or the
omission or alleged omission therefrom of a material fact necessary to
make the statements therein,
22
when considered in conjunction with the Prospectuses or preliminary
prospectuses, not misleading;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission or in connection with any
violation of the nature referred to in Section 6(a)(ii)(A) hereof;
provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to in
Section 6(a)(ii)(A) hereof, to the extent that any such expense is not
paid under (i), (ii) or (iii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information relating to the Underwriters
furnished to the Company by any Underwriter expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto); and PROVIDED, FURTHER, however, that the Company shall
not be liable to any indemnified party with respect to any preliminary
prospectus (or supplement thereto) if the Prospectuses corrected any such untrue
statement or omission, was delivered to such indemnified party (sufficiently in
advance of the Closing Date and in sufficient quantity to allow for distribution
by the Closing Date) and such indemnified party failed to furnish a copy of the
applicable Prospectus in contravention of a requirement of applicable law at or
prior to the written confirmation of the sale of Securities to the applicable
purchaser.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company and
PepsiCo, Inc., their respective directors, each of the officers of the Company
who signed the Registration Statement, and each person, if any, who controls the
Company or PepsiCo, Inc. within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A
23
Information or any preliminary U.S. prospectus or the U.S. Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information relating to the U.S. Underwriters furnished to the Company by such
U.S. Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the U.S.
Prospectus (or any amendment or supplement thereto).
(c) INDEMNIFICATION OF U.S. UNDERWRITERS BY PEPSICO. INC. PepsiCo, Inc.
agrees to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto) relating to PepsiCo, Inc.
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or 6(c)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such
24
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(iii)
effected without its written consent if such indemnifying party (i) reimburses
such indemnified party in accordance with such request to the extent that it
considers such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(f) INDEMNIFICATION FOR RESERVED SECURITIES. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of Reserved Securities Participants to pay for and accept
delivery of Reserved Securities which, by the end of the first business day
following the date of this Agreement, were subject to a properly confirmed
agreement to purchase.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
PepsiCo, Inc. on the one hand and the U.S. Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 and PepsiCo,
Inc. on the one hand and of the U.S. Underwriters on the other hand in
connection with the statements or omissions, or in connection with any violation
of the nature referred to in Section 6(a)(ii)(A) hereof, which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and PepsiCo, Inc. on the one
hand and the U.S. Underwriters on the other hand in connection with the offering
of the U.S. Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
U.S. Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus,
bear to the aggregate initial public offering price of the U.S. Securities as
set forth on such cover.
25
The relative fault of the Company and PepsiCo, Inc. on the one hand and
the U.S. Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or PepsiCo, Inc. or by the U.S.
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission or any
violation of the nature referred to in Section 6(a)(ii)(A) hereof.
The Company, PepsiCo, Inc. and the U.S. Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the U.S. Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company or PepsiCo, Inc., each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company or PepsiCo, Inc. within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or PepsiCo, Inc., as the case may be. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any
26
U.S. Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company or PepsiCo, Inc. has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE U.S. UNDERWRITERS. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
27
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the U.S. Underwriters to purchase and of the Company to
sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the U.S. Underwriters to purchase and the Company to sell the relevant U.S.
Option Securities, as the case may be, either the U.S. Representatives or the
Company shall have the right to postpone the Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "U.S. Underwriter"
includes any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Xxxxxxx X.X. Xxxx;
notices to the Company shall be directed to it at Xxx Xxxxx Xxx, Xxxxxx, Xxx
Xxxx 00000, attention of General Counsel; and notices to PepsiCo, Inc. shall be
directed to it at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, attention of
General Counsel.
SECTION 12. PARTIES. This Agreement shall each inure to the benefit of and
be binding upon the U.S. Underwriters, the Company and PepsiCo, Inc. and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Company and PepsiCo, Inc. and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the U.S.
Underwriters, the Company and PepsiCo, Inc. and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any U.S. Underwriter shall be deemed to be a
successor by reason merely of such purchase.
28
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the U.S. Underwriters, the Company and PepsiCo, Inc. in accordance with
its terms.
Very truly yours,
THE PEPSI BOTTLING GROUP, INC.
By:
----------------------------------
Title:
PEPSICO, INC.
By:
----------------------------------
Title:
30
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, XXXXX & CO.
XXXXXX BROTHERS INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX XXXXXX INC.
XXXXXXX X. XXXXXXXXX & CO., INC.
XXXXXXXX & CO. INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
----------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
31
SCHEDULE A
Number of
Initial
Name of Underwriter U.S. Securities
------------------- ---------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ..........................
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc......................
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co..........................
Xxxxxx Brothers Inc..........................
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx Barney Inc.....................
Xxxxxxx X. Xxxxxxxxx & Co., Inc.
Xxxxxxxx & Co. Inc...........................
----------
Total ................................................ 85,000,000
==========
Sch A-1
SCHEDULE B
THE PEPSI BOTTLING GROUP, INC.
85,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $ , being an amount equal to the initial public
offering price set forth above less $ per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
SCHEDULE C
List of persons and entities
subject to lock-up
PepsiCo, Inc.
Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxx
Xxxx X. Xxxxxx
Xxxxxx X. XxXxxxx
Xxxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxx
Xxxxx Xxxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxx X. von der Xxxxxx
Sch C-1
Exhibit A-1
FORM OF OPINION OF XXXXX XXXX & XXXXXXXX
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
(i) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or, to the knowledge
of such counsel, other similar rights of any securityholder of the
Company.
(ii) The Securities have been duly authorized for issuance and sale
to the U.S. Underwriters and the International Managers pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the U.S.
Purchase Agreement and the International Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of the
Securities is or will be subject to personal liability by reason of being
such a holder.
(iii) The issuance of the Securities is not subject to preemptive
or, to the knowledge of such counsel, other similar rights of any
securityholder of the Company.
(iv) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by the
Company.
(v) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(vi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the New York Stock Exchange.
(vii) The statements in the Prospectus under "Certain United States
Federal Tax Considerations for Non-U.S. Holders of Common Stock," to the
extent that they constitute
A-1
matters of law, summaries of legal matters, or legal conclusions, have
been reviewed by such counsel and fairly present the information called
for with respect thereto and fairly summarize the matters referred to
therein.
(viii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
Such counsel has not itself checked the accuracy, completeness or
fairness of, or otherwise verified, the information furnished with respect to
other matters in the Registration Statement or the Prospectus. Such counsel has
generally reviewed and discussed with your representatives, and with certain
officers and employees of, and counsel and independent public accountants for,
the Company the information furnished, whether or not subject to check and
verification by such counsel. On the basis of such consideration, review and
discussion, but without independent check or verification except as stated
above, nothing has come to such counsel's attention that causes it to believe
that (i) the Registration Statement and Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which we express no belief) do not comply as to form in
all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder or (ii)(x) the
Registration Statement and the Prospectus included therein (except for the
financial statements and financial schedules and other financial and statistical
data included therein, as to which such counsel expresses no belief) at the time
the Registration Statement became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; or (y) the
Prospectus (except as stated) as of its date and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
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.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
X-0
Xxxxxxx X-0
FORM OF OPINION OF XXXXXX X. XxXXXXX, ESQ.
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(ii)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each 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 Effect.
(iv) Each Subsidiary has been duly incorporated and is validly
existing as a limited liability company, corporation, limited partnership
or general partnership in good standing under the laws of the jurisdiction
of its organization, has the requisite power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign limited liability company,
corporation, limited partnership or general partnership to transact
business and is in good standing in each 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
Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and,
to the best of such counsel's knowledge, is owned by the Company, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary.
(v) To such counsel's knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably
A-3
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in the U.S.
Purchase Agreement and the International Purchase Agreement or the
performance by the Company of its obligations thereunder.
(vi) The statements in the Prospectus under "Description of Capital
Stock," "Business-Governmental Regulation" and "Relationship with PepsiCo
and Certain Transactions" and in the Registration Statement under Item 14,
to the extent that they constitute matters of law, summaries of legal
matters, the Company's charter and by-laws, or legal conclusions, have
been reviewed by such counsel and fairly present the information called
for with respect thereto and fairly summarize the matters referred to
therein.
(vii) To such counsel's knowledge, there are no statutes or
regulations (other than securities laws or regulations) that are required
to be described in the Prospectus that are not described as required.
(viii) All descriptions in the Registration Statement of contracts
and other documents to which the Company or its subsidiaries are a party
are accurate in all material respects; to such counsel's knowledge, there
are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
(ix) To such counsel's knowledge, neither the Company nor any
Subsidiary is in violation of its charter, by-laws, certificate of
formation, limited liability company agreement, partnership agreement, or
other organizational documents and no default by the Company or any
Subsidiary exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement
or the Prospectus or filed or incorporated by reference as an exhibit to
the Registration Statement.
(x) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of
the transactions contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use Of Proceeds" and the Separation) and compliance by
the Company with its obligations under the U.S. Purchase Agreement and the
International Purchase Agreement do not and will not, whether with or
without the giving of notice or lapse of time or both,
A-4
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreements) under or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to us, to which
the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter, by-laws, certificate of formation, limited liability company
agreement, partnership agreement, or other organizational documents of the
Company or any subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
(xi) Each of the Separation Agreement, the Pepsi Beverage
Agreements, the Shared Services Agreement, the Employee Programs Agreement
and the Tax Separation Agreement has been duly authorized, executed and
delivered by the Company and its subsidiaries, as applicable, and
constitutes the binding agreement of such party, enforceable against such
party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
(xii) To such counsel's knowledge, except as disclosed in the
Prospectuses, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xiii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any New York state court
or federal court or governmental authority or agency, (other than under
the 1933 Act and the 1933 Act Regulations, which have been obtained, or as
may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the
U.S. Purchase Agreement and the International Purchase Agreement or for
the offering, issuance or sale of the Securities.
Nothing has come to such counsel's attention that would lead her to
believe that the Registration Statement or any amendment thereto, including the
Rule 430A Information, (except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to which such counsel
need make no statement), at the time such Registration
A-5
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which such counsel need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits 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.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-6
Exhibit B
FORM OF OPINION OF PEPSICO, INC.'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by PepsiCo,
Inc.
(ii) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of
the transactions contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement and in the Registration Statement
(including Separation) and compliance by PepsiCo, Inc. with its
obligations under the U.S. Purchase Agreement and the International
Purchase Agreement do not and will not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(b)(iv) of the
Purchase Agreements) under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of PepsiCo, Inc.
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument, known
to us, to which PepsiCo, Inc. is a party or by which it may be bound, or
to which any of the property or assets of PepsiCo, Inc. is subject (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of PepsiCo, Inc., whether or not arising in the ordinary course
of business), nor will such action result in any violation of the
provisions of the certificate of incorporation or bylaws of PepsiCo, Inc.,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over PepsiCo, Inc. or any
of its properties, assets or operations.
(iii) Each of the Separation Agreement, the Pepsi Beverage
Agreements, the Shared Services Agreement, the Employee Programs Agreement
and the Tax Separation Agreement has been duly authorized, executed and
delivered by PepsiCo, Inc., and constitutes the binding agreement of
PepsiCo, Inc., enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
Nothing has come to such counsel's attention that would lead him to
believe that the Registration Statement or any amendment thereto, including the
Rule 430A Information, (except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to which such counsel
need make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact in each case relating to PepsiCo only required
to be stated
B-1
therein or necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which such counsel need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact in each case relating
to PepsiCo only necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
B-2
Exhibit C
FORM OF LOCK-UP TO BE DELIVERED PURSUANT TO SECTION 5(k)
, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers Inc.
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx X. Xxxxxxxxx & Co., Inc.
Xxxxxxxx & Co. Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: PROPOSED PUBLIC OFFERING BY THE PEPSI BOTTLING GROUP, INC.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of The
Pepsi Bottling Group, Inc., a Delaware corporation (the "Company"), understands
that Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Xxxxxx Xxxxxxx & Co. Incorporated, Bear, Xxxxxxx & Co. Inc.,
Credit Suisse First Boston Corporation, Xxxxxxx, Xxxxx & Co., Xxxxxx Brothers
Inc, NationsBanc Xxxxxxxxxx Securities LLC, Xxxxxxx Xxxxx Barney Inc., Xxxxxxx
X. Xxxxxxxxx & Co., Inc. and Xxxxxxxx & Co. Inc. propose to enter into a
Purchase Agreement (the "Purchase Agreement") with the Company providing for the
public offering of shares (the "Securities") of the Company's common stock, par
value $.01 per share (the "Common Stock"). In recognition of the benefit that
such an offering will confer upon the
C-1
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Purchase Agreement that, during a period of 180 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
lend or otherwise dispose of or transfer any shares of the Company's Common
Stock, the Class B Common Stock, par value $.01 per share, of the Company (the
"Class B Common Stock") or any securities convertible into or exercisable or
exchangeable for Common Stock or Class B Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock or the Class B Common
Stock, whether any such swap transaction is to be settled by delivery of Common
Stock, Class B Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
Print Name:
C-2
