Exhibit 1.1
Execution Copy
PEPSICO, INC.
7.90% Senior Notes due 2018
TERMS AGREEMENT
October 21, 2008
|
|
|
To:
|
|
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
|
Ladies and Gentlemen:
We understand that PepsiCo, Inc., a North Carolina corporation (the
Company
), proposes to
issue and sell $2,000,000,000 of its 7.90% Senior Notes due 2018 (such securities also being
hereinafter referred to as the
Underwritten Securities
) subject to the terms and conditions
stated herein and in the Underwriting Agreement Standard Provisions dated as of October 21, 2008
attached hereto as Annex A (the
Standard Provisions
). Each of the applicable provisions in the
Standard Provisions is incorporated herein by reference in its entirety, and shall be deemed to be
a part of this Agreement to the same extent as if such provisions had been set forth in full
herein. We, the underwriters named below (the
Underwriters
), offer to purchase, severally and not
jointly, the number or amount of Underwritten Securities opposite our names set forth below at a
purchase price equal to 99.308% of the principal amount thereof.
|
|
|
|
|
|
|
Principal
|
Underwriter
|
|
Amount
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
|
|
$
|
710,000,000
|
|
Morgan Stanley & Co. Incorporated
|
|
|
20,000,000
|
|
UBS Securities LLC
|
|
|
710,000,000
|
|
The Williams Capital Group, L.P.
|
|
|
440,000,000
|
|
Muriel Siebert & Co., Inc.
|
|
|
60,000,000
|
|
Samuel A. Ramirez & Co., Inc.
|
|
|
60,000,000
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,000,000,000
|
|
|
|
|
|
|
The Underwritten Securities and the offering thereof shall have the following additional
terms:
Terms of the Underwritten Securities and the Offering
|
|
|
|
|
Issuer:
|
|
PepsiCo, Inc.
|
|
|
|
|
|
Title of Securities:
|
|
7.90% Senior Notes Due 2018
|
|
|
|
|
|
Ratings:
|
|
Aa2 (Stable) by Moodys Investors
Service, Inc and A+ (Stable) by
Standard & Poors Rating Services
|
|
|
|
|
|
Trade Date:
|
|
October 21, 2008
|
|
|
|
|
|
Time of Sale
|
|
4:45 p.m. on the Trade Date
|
|
|
|
|
|
Settlement Date (T+3):
|
|
October 24, 2008
|
|
|
|
|
|
Closing Time
|
|
9:30 a.m. on the Settlement Date
|
|
|
|
|
|
Closing Location
|
|
New York, New York
|
|
|
|
|
|
Maturity Date:
|
|
November 1, 2018
|
|
|
|
|
|
Time of Sale Prospectus:
|
|
Base Prospectus dated October 15,
2008, preliminary prospectus
supplement dated October 21, 2008 and free writing prospectus dated October 21, 2008.
|
|
|
|
|
|
Aggregate Principal Amount Offered:
|
|
$2,000,000,000
|
|
|
|
|
|
|
|
Price to Public (Issue Price):
|
|
99.758%
|
|
|
|
|
|
|
|
Proceeds to PepsiCo (Before Expenses):
|
|
$1,986,160,000
|
|
|
|
|
|
|
|
Benchmark Treasury:
|
|
4% Treasury Notes due August 15, 2018
|
|
|
|
|
|
Benchmark Treasury Yield:
|
|
3.735%
|
|
|
|
|
|
|
|
Spread to Treasury:
|
|
420 bps
|
|
|
|
|
|
Re-offer Yield:
|
|
7.935%
|
|
|
|
|
|
|
|
Coupon:
|
|
7.90%
|
|
|
|
|
|
|
|
Interest Payment Dates:
|
|
Semi-annually on each May 1 and
November 1, commencing on May 1, 2009
|
|
|
|
|
|
Optional Redemption:
|
|
Make-whole call at any time, at the
greater of 100% of the principal
amount of the notes being redeemed or
discounted present value at Treasury
rate plus 50 basis points
|
|
|
|
|
|
Minimum Denomination:
|
|
$2,000 and integral multiples of $1,000
|
|
|
|
|
|
Daycount Fraction:
|
|
30 / 360
|
|
|
|
|
|
|
|
CUSIP/ISIN:
|
|
713448BJ6/US713448BJ63
|
|
|
|
|
|
Joint Bookrunners and Representatives
of the Several Underwriters:
|
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co.
Incorporated, UBS Securities LLC and
The Williams Capital Group, L.P.
|
|
|
|
|
|
Address and facsimile number for
notices to the Representatives :
|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
|
|
4 World Financial Center
|
|
|
250 Vesey Street
|
|
|
New York, New York 10080
|
|
|
|
|
|
|
|
Morgan Stanley & Co. Incorporated
|
|
|
|
|
|
|
|
1585 Broadway
|
|
|
New York, New York 10036
|
|
|
|
|
|
|
|
UBS Securities LLC
|
|
|
677 Washington Boulevard
|
|
|
Stamford, Connecticut 06901
|
|
|
|
|
|
|
|
The Williams Capital Group, L.P.
|
|
|
650 Fifth Avenue
|
|
|
New York, New York 10019
|
|
|
|
|
|
Co-Managers:
|
|
Muriel Siebert & Co., Inc. and Samuel
A. Ramirez & Co., Inc.
|
|
|
|
|
|
Amount of reimbursement to the
Company from the Underwriters
|
|
Reasonably documented legal, printing
and SEC filing fees, which the Company
currently estimates to be
approximately $320,000
|
The Representative represents and warrants that it is duly authorized to execute and deliver
this Terms Agreement on behalf of the several Underwriters named above.
IN WITNESS WHEREOF, the parties hereto have executed this Terms Agreement as of the date first
above written.
|
|
|
|
|
|
PEPSICO, INC.
|
|
|
By:
|
/s/
Richard Goodman
|
|
|
|
Name:
|
Richard Goodman
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
J. Darrell Thomas
|
|
|
|
Name:
|
J. Darrell Thomas
|
|
|
|
Title:
|
Vice President and Assistant Treasurer
|
|
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL
LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
UBS SECURITIES LLC
THE WILLIAMS CAPITAL GROUP, L.P.
MORGAN STANLEY & CO. INCORPORATED
as Representatives of the several Underwriters
By:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Romitha Mally
|
|
|
|
|
|
|
Name: Romitha Mally
|
|
|
|
|
|
|
Title: Managing Director
|
|
|
By:
UBS SECURITIES LLC
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Christian Stewart
|
|
|
|
|
|
|
Name: Christian Stewart
|
|
|
|
|
|
|
Title: Managing Director
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Christopher Fernando
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name: Christopher Fernando
|
|
|
|
|
|
|
Title: Associate Director
|
|
|
By:
THE WILLIAMS CAPITAL GROUP, L.P.
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jonathan Levin
|
|
|
|
|
|
|
Name: Jonathan Levin
|
|
|
|
|
|
|
Title: Principal
|
|
|
By:
MORGAN STANLEY & CO. INCORPORATED
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Yurij Slyz
|
|
|
|
|
|
|
Name: Yurij Slyz
|
|
|
|
|
|
|
Title: Vice President
|
|
|
Schedule I
Time of Sale Prospectus:
1.
|
|
Preliminary Prospectus issued October 21, 2008 (including the Base Prospectus)
|
|
2.
|
|
Any free writing prospectuses filed by the Company under Rule 433(d) of the Securities Act
|
|
3.
|
|
Final Term Sheet, attached as Schedule II
|
Schedule II
Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Statement No. 333-154314
October 21, 2008
PepsiCo, Inc.
$2,000,000,000 7.90% Senior Notes Due November 1, 2018
|
|
|
|
|
Issuer:
|
|
PepsiCo, Inc.
|
|
|
|
|
|
Title of Securities:
|
|
7.90% Senior Notes Due 2018
|
|
|
|
|
|
Ratings:
|
|
Aa2 (Stable) by Moodys Investors
Service, Inc and A+ (Stable) by Standard
& Poors Rating Services
|
|
|
|
|
|
Trade Date:
|
|
October 21, 2008
|
|
|
|
|
|
Settlement Date (T+3):
|
|
October 24, 2008
|
|
|
|
|
|
Maturity Date:
|
|
November 1, 2018
|
|
|
|
|
|
Aggregate Principal Amount
Offered:
|
|
$2,000,000,000
|
|
|
|
|
|
|
|
Price to Public (Issue Price):
|
|
99.758%
|
|
|
|
|
|
|
|
Proceeds to PepsiCo (Before
Expenses):
|
|
$1,986,160,000
|
|
|
|
|
|
|
|
Benchmark Treasury:
|
|
4% Treasury Notes due August 15, 2018
|
|
|
|
|
|
Benchmark Treasury Yield:
|
|
3.735%
|
|
|
|
|
|
|
|
Spread to Treasury:
|
|
420 bps
|
|
|
|
|
|
Re-offer Yield:
|
|
7.935%
|
|
|
|
|
|
|
|
Coupon:
|
|
7.90%
|
|
|
|
|
|
|
|
Interest Payment Dates:
|
|
Semi-annually on each May 1 and November
1, commencing on May 1, 2009
|
|
|
|
|
|
Optional Redemption:
|
|
Make-whole call at any time, at the
greater of 100% of the principal amount
of the notes being redeemed or
discounted present value at Treasury
rate plus 50 basis points
|
|
|
|
|
|
Minimum Denomination:
|
|
$2,000 and integral multiples of $1,000
|
|
|
|
|
|
Daycount Fraction:
|
|
30 / 360
|
|
|
|
|
|
|
|
CUSIP/ISIN:
|
|
713448BJ6/US713448BJ63
|
|
|
|
|
|
Joint Bookrunners:
|
|
Merrill Lynch, Pierce, Fenner & Smith
|
|
|
Incorporated, Morgan Stanley & Co.
|
|
|
Incorporated, UBS Securities LLC and The
|
|
|
Williams Capital Group, L.P.
|
|
|
|
|
|
Co-Managers:
|
|
Muriel Siebert & Co., Inc. and Samuel A.
|
|
|
Ramirez & Co., Inc.
|
An explanation of the significance of ratings may be obtained from the ratings agencies.
Generally, ratings agencies base their ratings on such material and information, and such of their
own investigations, studies and assumptions, as they deem appropriate. The security ratings above
are not a recommendation to buy, sell or hold the securities offered hereby. The ratings may be
subject to review, revision, suspension, reduction or withdrawal at any time by Moodys and
Standard & Poors. Each of the security ratings above should be evaluated independently of any
other security rating.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
Merrill Lynch, Pierce, Fenner & Smith Incorporated toll-free at 1-866-500-5408, Morgan Stanley &
Co. Incorporated toll-free at 1-866-718-1649 (institutional investors), UBS Securities LLC
toll-free at 1 -877-827-6444 (extension 561-3884) or The Williams Capital Group, L.P. toll-free at
1-800-924-1311.
Any disclaimers or other notices that may appear below are not applicable to this communication and
should be disregarded. Such disclaimers or other notices were automatically generated as a result
of this communication being sent via Bloomberg or another email system.
Annex A
PEPSICO, INC.
Underwritten Securities
UNDERWRITING AGREEMENT STANDARD PROVISIONS
October 21, 2008
From time to time, PepsiCo, Inc., a corporation organized under the laws of the State of North
Carolina (the
Company
), may enter into one or more terms agreements (each, a
Terms Agreement
)
in substantially the form of Exhibit A hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue
and sell certain securities (the
Securities
) to the underwriter or underwriters named in the
applicable Terms Agreement (the
Underwriters
, which term shall include any underwriter
substituted pursuant to Section 8 hereof). The provisions included herein (the
Standard
Provisions
) shall be attached to and incorporated by reference into each Terms Agreement.
Section 1
. Definitions.
The Company has filed with the Securities and Exchange Commission (the
Commission
) an automatic shelf registration statement as defined in Rule 405 under the
Securities Act of 1933, as amended (the
Securities Act
) on Form S-3 covering the registration of
certain Securities of the Company to be issued and sold from time to time, in or pursuant to one or
more offerings on terms to be determined at the time of sale, in accordance with Rule 415 under the
Securities Act. Such registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430B under the Securities Act
(the
Rule 430 Information
), is referred to herein as the
Registration Statement
; and the base
prospectus included in the Registration Statement at the time of filing (the
Base Prospectus
) and
the final prospectus supplement relating to a particular offering of Underwritten Securities (as
defined below) referred to in a Terms Agreement, in the forms first used to confirm sales of such
Underwritten Securities (or in the form first made available to the Underwriters by the Company to
meet requests of purchasers pursuant to Rule 173 under the Securities Act), are collectively
referred to herein as the
Prospectus
. All references herein to the Registration Statement and
the Prospectus shall be deemed to include all documents incorporated therein by reference which
are filed by the Company pursuant to the Securities Exchange Act of 1934, as amended (the
Exchange
Act
) or the Securities Act, prior to the execution of the applicable Terms Agreement. References
herein to a
preliminary prospectus
relating to an offering of particular Underwritten Securities
pursuant to a Terms Agreement shall be deemed to refer to the Base Prospectus and to the prospectus
supplement (a
preliminary prospectus supplement
) relating to such Underwritten Securities that
omitted Rule 430 Information or other information to be included upon pricing in a form of
prospectus relating to such Underwritten Securities filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act and that was used prior to the initial delivery of
the Prospectus relating to such Underwritten Securities to the Underwriters by the Company.
For purposes of these Standard Provisions and the Terms Agreement relating to an offering of
particular Underwritten Securities,
free writing prospectus
has the meaning set forth in Rule 405
under the Securities Act, and
Time of Sale Prospectus
means the Base Prospectus, the final
preliminary prospectus supplement filed prior to the
Time of Sale
set forth in such Terms
Agreement, together with any free writing prospectus or other information stated in such Terms
Agreement to form part of the Time of Sale Prospectus. For purposes of these Standard Provisions,
all references to the Registration Statement, Prospectus, preliminary prospectus or Time of
Sale Prospectus or to any amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (
EDGAR
).
All references in these Standard Provisions to financial statements and schedules and other
information which is contained, included or stated (or other references of like import) in
the Registration Statement, preliminary prospectus, Time of Sale Prospectus or Prospectus shall be
deemed to mean and include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, the applicable preliminary prospectus,
the applicable Time of Sale Prospectus or the applicable Prospectus, as the case may be, prior to
the execution of the applicable
Terms Agreement; and all references in these Standard Provisions to amendments or supplements
to the Registration Statement, preliminary prospectus, Time of Sale Prospectus or Prospectus shall
be deemed to include the filing of any document under the Exchange Act which is incorporated by
reference in the Registration Statement, the applicable preliminary prospectus, the applicable Time
of Sale Prospectus or the applicable Prospectus, as the case may be, after the execution of the
applicable Terms Agreement.
Section 2
. Purchase and Sale of Securities by the Underwriters.
Whenever the Company
determines to make an offering of Securities to be governed by these Standard Provisions, the
Company will enter into a Terms Agreement providing for the sale of such Securities to, and the
purchase and offering thereof by, the Underwriters. The Terms Agreement relating to the offering of
Securities shall specify the number or amount of Securities to be issued (the
Underwritten
Securities
), the name of each Underwriter participating in such offering (subject to substitution
as provided in Section 8 hereof) and the name of any Underwriter acting as manager or co-manager in
connection with such offering, the number or amount of Underwritten Securities which each such
Underwriter severally agrees to purchase, whether such offering is on a fixed or variable price
basis and, if on a fixed price basis, the initial offering price, the price at which the
Underwritten Securities are to be purchased by the Underwriters, the form, time, date and place of
delivery and payment of the Underwritten Securities and any other material terms of the
Underwritten Securities. The Terms Agreement may take the form of an exchange of any standard form
of written telecommunication between the Company and the Underwriter or Underwriters, acting
through the Underwriters representative (the
Representative
) identified as such in the
applicable Terms Agreement. Each offering of Underwritten Securities will be governed by these
Standard Provisions, as supplemented by the applicable Terms Agreement.
If so specified in the applicable Terms Agreement, the Company may grant the Underwriters the
option to purchase at their election up to the number of additional Securities (the
Optional
Securities
) set forth in such Terms Agreement at the purchase price per Security set forth
therein, for the sole purpose of covering over-allotments of Securities in excess of the number of
Firm Securities
set forth in such Terms Agreement. Both Firm Securities and Optional Securities
shall be deemed Underwritten Securities hereunder. Any such election to purchase Optional
Securities may be exercised only once, and only by written notice from the Representative to the
Company, given within a period of 30 calendar days after the date of such Terms Agreement and
setting forth the aggregate number of Optional Securities to be purchased and the time and date on
which such Optional Securities are to be delivered (which shall be a Closing Time (as defined
below) hereunder), as determined by the Representative but in no event earlier than the initial
Closing Date (as defined below) for the Firm Securities or, unless the Representative and the
Company otherwise agree in writing, earlier than two or later than ten Business Days (as defined
below) after the date of such notice. If the Company shall have granted such an option to the
Underwriters, then in the event and to the extent that the Underwriters shall exercise such option
as provided above, the Company will sell to each of the Underwriters, and each of the Underwriters
will, severally and not jointly, purchase from the Company, at the purchase price set forth in such
Terms Agreement, subject to adjustment as provided below, that portion of the number of Optional
Securities as to which such option shall have been exercised (to be adjusted by the Representative
so as to eliminate fractional Securities) determined by multiplying such number of Optional
Securities by a fraction the numerator of which is the number of Firm Securities which such
Underwriter is required to purchase as set forth opposite the name of such Underwriter in such
Terms Agreement and the denominator of which is the aggregate number of Firm Securities that all of
the Underwriters are required to purchase thereunder.
As used herein,
Business Day
means any day other than a Saturday, Sunday or other day on
which commercial banks are permitted or required to be closed in New York City.
Section 3
. Underwriters Obligation to Purchase Underwritten Securities.
The several
commitments of the Underwriters to purchase the Underwritten Securities pursuant to the applicable
Terms Agreement shall be deemed to have been made on the basis of the representations, warranties
and agreements herein contained and shall be subject to the terms and conditions herein set forth.
Section 4
. Terms Agreement.
No agreement for the purchase of the Underwritten Securities by
the Underwriters will be deemed to exist until the Company and the Representative, on behalf of the
Underwriters, have executed a Terms Agreement. Each Terms Agreement will incorporate all applicable
terms and provisions of these Standard Provisions as fully as though such terms and provisions were
expressly stated therein.
Section 5
. Delivery of Certain Documents, Certificates, and Opinions.
At each Closing Time,
the Underwriters shall have received the following documents:
(a) the opinion and disclosure letter of Davis Polk & Wardwell, or other special New York
counsel for the Company reasonably acceptable to the Representative; the opinion of internal
counsel for the Company; and the opinion of Womble Carlyle Sandridge & Rice, PLLC, or other special
North Carolina counsel for the Company reasonably acceptable to the Representative, each dated as
of the Closing Date, substantially in the respective forms of Exhibits B-1, B-2, B-3 and B-4
hereto,
(b) the opinion of counsel to the Underwriters, selected by the Representative and reasonably
acceptable to the Company, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Underwriters,
(c) a certificate of the Assistant Secretary of the Company, dated as of the Closing Date,
substantially in the form of Exhibit C hereto, and
(d) a certificate of the Chief Financial Officer or Treasurer of the Company, dated as of the
Closing Date, substantially in the form of Exhibit D hereto.
Section 6
. Certain Conditions Precedent to the Underwriters Obligations.
The Underwriters
obligation to purchase any Underwritten Securities will in all cases be subject to the accuracy of
the representations and warranties of the Company set forth in Section 7 hereof, to the receipt of
the opinions and certificates to be delivered to the Underwriters pursuant to the terms of Section
5 hereof, to the accuracy of the statements of the Companys officers made in each certificate to
be furnished as provided herein, to the performance and observance by the Company of all covenants
and agreements contained herein on its part to be performed and observed, in each case at the time
the Company executes a Terms Agreement, at the Time of Sale and as of the applicable Closing Date,
and (in each case) to the following additional conditions precedent, when and as specified:
(a) As of the Closing Time for any Underwritten Securities, and with respect to the period
from the date of the applicable Terms Agreement to and including the applicable Closing Time:
(i) there shall not have occurred (A) any material adverse change (or development
involving a prospective material adverse change) in the business, properties, earnings, or
financial condition of the Company and its subsidiaries on a consolidated basis (a
Material
Adverse Effect
) or (B) any suspension or material limitation of trading in the Companys
common stock, par value one and two-thirds cents (1-2/3 cents) per share, of the Company
(
Common Stock
), by the Commission or the New York Stock Exchange, Inc. (the
NYSE
), the
effect of any of which shall have made it impracticable, in the reasonable judgment of the
Underwriters, to market such Underwritten Securities, such judgment to be based on relevant
market conditions;
(ii) there shall not have occurred (A) any suspension or material limitation of trading
in securities generally on the NYSE, (B) a declaration of a general moratorium on commercial
banking activities in New York by either Federal or New York State authorities, or (C) any
outbreak or material escalation of hostilities or other national or international calamity or
crisis, the effect of any of which shall have made it impracticable, in the judgment of the
Underwriters, to market such Underwritten Securities, such judgment to be based on relevant
market conditions; and
(iii) there shall not have been issued any stop order suspending the effectiveness of the
Registration Statement nor shall any proceedings for that purpose or pursuant to Section 8A of
the Securities Act against the Company or related to the offering of the Underwritten
Securities have been instituted or threatened.
(b) The Underwriters will receive, upon execution and delivery of any applicable Terms
Agreement, a letter from KPMG LLP, or such other independent registered public accounting firm as
may be selected by the Company, 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 of the Company contained in the Registration Statement and the
Prospectus.
(c) At each Closing Time, the Underwriters shall have received from KPMG LLP, or such other
independent registered public accounting firm as may be selected by the
Company, a letter, dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to
subsection (b) of this Section, except that the cut off date referred to therein shall be a
date not more than five Business Days prior to the Closing Date.
(d) On each Closing Date, the Underwriters shall have received from the Company such
appropriate further information, certificates, and documents as the Company and the Underwriters
shall have agreed, as reflected in the applicable Terms Agreement.
(e) Subsequent to the execution and delivery of the applicable Terms Agreement and prior to
the Closing Time, there shall not have been any material downgrading, nor any notice given of any
intended or potential material downgrading or of a possible material change that does not indicate
the direction of the possible material change, in the rating accorded any of the Companys
securities, including the Underwritten Securities, by either Moodys Investors Service, Inc. or
Standard & Poors Ratings Services, a division of The McGraw Hill Companies, Inc.
Section 7
. Representations and Warranties of the Company.
The Company represents and warrants
to each Underwriter named in the applicable Terms Agreement, as of the date thereof, and as of each
Closing Time, the following statements are and shall be true:
(a) (i) The Registration Statement constitutes an automatic shelf registration statement (as
defined in Rule 405 under the Securities Act) filed within three years of the date of the
applicable Terms Agreement, (ii) the Company is a well known seasoned issuer (as defined in Rule
405 under the Securities Act), (iii) the Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) under the Securities Act objecting to the use of the automatic shelf
registration statement form, (iv) the Registration Statement became effective upon filing with the
Commission and no stop order suspending the effectiveness of the Registration Statement is in
effect nor, to the Companys knowledge, are any proceedings for such purpose pending before or
threatened by the Commission, (v) as of the effective date of the Registration Statement (the
Effective Date
), the Company met the applicable requirements for use of Form S-3 under the
Securities Act with respect to the registration under the Securities Act of the Securities, and
(vi) as of the Effective Date, the Registration Statement met the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complied in all material respects with said Rule.
(b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act or the
Securities Act and incorporated or to be incorporated by reference in the Prospectus or Time of
Sale Prospectus complies or will comply, in all material respects, with the applicable provisions
of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the
Commission thereunder, (ii) the Registration Statement does not contain any 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, (iii) the Registration Statement and the Prospectus comply,
in all material respects, with the Securities Act and the rules and regulations of the Commission
thereunder, (iv) the Prospectus does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (v) the Time of Sale Prospectus does not as of its date
(which shall be the date of the preliminary prospectus supplement included therein, if applicable),
and will not as of the Time of Sale and at the Closing Date, the Time of Sale Prospectus, as then
amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however,
that the
Company makes no representations and warranties as to information contained in or omitted from the
Registration Statement, the Prospectus or the Time of Sale Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by the Underwriters expressly for
use in the Registration Statement, the Prospectus or the Time of Sale Prospectus or any amendment
or supplement thereto or the Statement of Eligibility and Qualification of the Trustee (the
Form
T-1
) under the Trust Indenture Act of 1939, as amended (the
Trust Indenture Act
).
(c) The Company is not an ineligible issuer in connection with the offering pursuant to
Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act has
been, or will be, filed with the Commission in accordance with the requirements of the
Securities Act and the applicable rules and regulations of the Commission thereunder.
(d) The Company has been duly incorporated and is validly existing under the laws of the State
of North Carolina, has the corporate power and authority to own its property and to conduct its
business as described in the Time of Sale Prospectus and the Prospectus, and is duly qualified to
transact business as a foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or in good standing would not have a
Material Adverse Effect.
(e) The applicable Terms Agreement, incorporating these Standard Provisions, as amended by
agreement of the parties to the applicable Terms Agreement, as of the date of such Terms Agreement
will have been, duly authorized, executed and delivered by the Company.
(f) The Underwritten Securities have been duly authorized and, when issued, executed, and
authenticated in accordance with the provisions of the applicable indenture (the
Indenture
), or
when countersigned by the trustee in accordance with the provisions of the Indenture, as the case
may be, will be entitled to the benefits of the Indenture, and will be valid and binding
obligations of the Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws relating to creditors rights
generally, by any other federal or state laws, by rights of acceleration, if applicable, by general
principles of equity.
(g) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended
and has been duly authorized, executed, and delivered by the Company and (assuming due
authorization, valid execution, and delivery thereof by the trustee) is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by the laws of bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or similar laws relating to creditors rights generally, by any
other federal or state laws, by rights of acceleration, by general principles of equity.
(h) The execution and delivery of and performance by the Company of its obligations under the
applicable Terms Agreement, incorporating these Standard Provisions as amended by agreement of the
parties to such Terms Agreement and the Indenture and the issuance and sale of the Underwritten
Securities, as the case may be, will not contravene any provision of any applicable law or of the
Restated Charter or By-Laws of the Company, or of any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken
as a whole, or of any judgment, order, or decree of any governmental body, agency, or court having
jurisdiction over the Company or any of its subsidiaries, in each of the foregoing cases except as
would not reasonably be expected to have a Material Adverse Effect, and no consent, approval,
authorization, or order of or qualification with any governmental body or agency is, to the
Companys knowledge, required for the performance by the Company of its obligations under the
applicable Terms Agreement, incorporating these Standard Provisions as amended by agreement of the
parties to such Terms Agreement, or the issuance and sale of the Underwritten Securities, except
such as may be required by Blue Sky laws or other securities laws of the various states in which
the issuance and sale of the Underwritten Securities are offered and sold and except to the extent
where the failure to obtain such consent, approval, authorization, order or qualification would not
reasonably be expected to have a Material Adverse Effect.
(i) There has not been any material adverse change (or development involving a prospective
material adverse change) in the business, properties, earnings, or financial condition of the
Company and its subsidiaries on a consolidated basis from that set forth in the Companys last
periodic report filed with the Commission under the Exchange Act and the rules and regulations
promulgated thereunder. Since the respective dates as of which information is given in the
Registration Statement, the Time of Sale Prospectus and the Prospectus, except as otherwise stated
therein, there has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(j) There are no legal or governmental proceedings pending or, to the Companys knowledge,
threatened, to which the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that is required to be described in
the Registration Statement, the Time of Sale Prospectus or the Prospectus and is not so described,
or any applicable statute,
regulation, contract, or other document that is required to be described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus that is not so described.
(k) The independent registered public accounting firm who audited the financial statements and
supporting schedules incorporated by reference in the Registration Statement are independent
registered public accountants as required by the Securities Act.
(l) The financial statements included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, together with the related schedules and
notes, present fairly the financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations, shareholders equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said financial statements have
been prepared in conformity with U.S. generally accepted accounting principles (
GAAP
) applied on
a consistent basis throughout the periods involved. The supporting schedules, if any, present
fairly in accordance with GAAP the information required to be stated therein.
Section 8
. Default by One or More of the Underwriters.
If one or more of the Underwriters
shall fail at the Closing Time to purchase the Underwritten Securities which it or they are
obligated to purchase under the applicable Terms Agreement (the
Defaulted Securities
), then the
remaining Underwriters shall have the right, within 24 hours thereafter, to make arrangements for
one or more of the non-defaulting 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 Underwriters shall not have completed such arrangements within
such 24-hour period, then:
(a) if the number or principal amount of Defaulted Securities does not exceed 10% of the
number of Underwritten Securities to be purchased on such date pursuant to such Terms Agreement,
the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations under such Terms
Agreement bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount of Defaulted Securities exceeds 10% of the
number or aggregate principal amount of Underwritten Securities to be purchased on such date
pursuant to such Terms Agreement, such Terms Agreement shall terminate without liability on the
part of any non-defaulting Underwriter. No action taken pursuant to this Section 8 shall relieve
any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of the applicable
Terms Agreement, either the Underwriters or the Company shall have the right to postpone the
Closing Time for a period not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or arrangements.
Section 9
. Agreements.
(a) The Company covenants with the Underwriters as follows:
(i) Prior to the filing by the Company of any amendment to the Registration Statement,
the Time of Sale Prospectus or of any prospectus supplement that shall name the Underwriters
or the filing or use of any free writing prospectus, the Company will afford the Underwriters
or their counsel a reasonable opportunity to review and comment on the same,
provided,
however
, that the foregoing requirement will not apply to any of the Companys filings with
the Commission required to be filed pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act. Subject to the foregoing sentence, the Company will promptly cause each
applicable prospectus supplement and free writing prospectus to be filed with or transmitted
for filing with the Commission in accordance with Rule 424(b) or 424(c) under the Securities
Act or Rule 433 under the Securities Act, respectively, or pursuant to such other rule or
regulation of the Commission as then deemed appropriate by the Company. The Company will
promptly advise the Underwriters of (A) the filing and effectiveness of any amendment to the
Registration Statement other than by virtue of the Companys filing any report required to be
filed under the Exchange Act, (B) any request by the Commission for any amendment to the
Registration Statement, for any amendment or supplement to
the Time of Sale Prospectus or the Prospectus, or for any information from the Company,
(C) the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for that purpose,
and (D) the receipt by the Company of any notification with respect to the suspension of the
qualification of the
Underwritten Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use reasonable efforts to
prevent the issuance of any such stop order or notice of suspension of qualification and, if
issued, to obtain as soon as reasonably possible the withdrawal thereof.
(ii) If the Time of Sale Prospectus is being used to solicit offers to buy the
Underwritten Securities at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it is necessary
to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in
the light of the circumstances, not misleading, or if any event shall occur or condition exist
as a result of which the Time of Sale Prospectus conflicts with the information contained in
the Registration Statement then on file, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to any dealer upon request, either amendments or supplements
to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so
amended or supplemented will not, in the light of the circumstances when delivered to a
prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or
supplemented, will no longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply with applicable law.
(iii) If, at any time when a Prospectus (or in lieu thereof the notice referred to in
Rule 173(a) under the Securities Act) relating to any Underwritten Securities is required to
be delivered under the Securities Act, any event occurs or condition exists as a result of
which the Prospectus would include an untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary to amend or supplement the
Prospectus in order to comply with the Securities Act, the Exchange Act, the respective rules
and regulations of the Commission thereunder, or any other applicable law, the Company will
promptly notify the Underwriters, by telephone or by facsimile (in either case with written
confirmation from the Company by mail), to cease use and distribution of the Prospectus (and
all then existing supplements thereto) and to suspend all efforts to resell the Underwritten
Securities in its capacity as underwriter or dealer, as the case may be, and the Underwriters
will promptly comply with the terms of such notice. The Company will forthwith prepare and
cause to be filed with the Commission an amendment or supplement to the Registration Statement
or the Prospectus, as the case may be, satisfactory in the reasonable judgment of the
Underwriters to correct such statement or omission or to effect such compliance, and the
Company will supply the Underwriters with one signed copy of such amended Registration
Statement and as many copies of such amended or supplemented Prospectus as the Underwriters
may reasonably request,
provided, however
, that the expense of preparing, filing, and
supplying copies to the Underwriters of any such amendment or supplement will be borne by the
Company only for the nine-month period immediately following the purchase of such Underwritten
Securities by the Underwriters and thereafter will be borne by the Underwriters.
(iv) The Company will furnish to the Underwriters, without charge, as many copies of the
Time of Sale Prospectus, the Prospectus, each preliminary prospectus, any documents
incorporated by reference therein, and any supplements and amendments thereto and any free
writing prospectus as the Underwriters may reasonably request.
(v) The Company will, with such assistance from the Underwriters as the Company may
reasonably request, endeavor to qualify the Securities for offer and sale under the Blue Sky
laws or other securities laws of such jurisdictions as the Underwriters shall reasonably
request and will maintain such qualifications for as long as required with respect to the
offer, sale, and distribution of the Securities.
(vi) The Company will make generally available to its security holders earnings
statements that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder.
(b) Each Underwriter, severally and not jointly, covenants with the Company as follows:
(i) It has not and will not use, authorize use of, refer to, or participate in the
planning for use of, any free writing prospectus, as defined in Rule 405 under the
Securities Act (which term includes use of any written information furnished to the Commission
by the Company and not incorporated by reference into the Registration Statement and any press
release issued by the Company) (each such
communication by the Company or its agents or
representatives (excluding any Underwriter) an
Issuer Free Writing Prospectus
) other than
(A) a free writing prospectus that contains no issuer information (as defined in Rule
433(h)(2) under the Securities Act) that was not included (including through incorporation by
reference) in the preliminary prospectus or a previously filed Issuer Free Writing Prospectus,
(B) any Issuer Free Writing Prospectus listed on Schedule I to the applicable Terms Agreement
or (C) any free writing prospectus prepared by such Underwriter and approved by the Company in
advance in writing (each such free writing prospectus referred to in clauses (A) or (C), an
Underwriter Free Writing Prospectus
).
(ii) It has not and will not distribute any Underwriter Free Writing Prospectus referred
to in Section 9(b)(i)(A) above in a manner reasonably designed to lead to its broad
unrestricted dissemination.
(iii) It has not and will not, without the prior written consent of the Company, use any
free writing prospectus that contains the final terms of the Underwritten Securities unless
such terms have previously been included in a free writing prospectus filed with the
Commission.
(iv) It is not subject to any pending proceeding under Section 8A of the Securities Act
with respect to the offering (and will promptly notify the Company if any such proceeding
against it is initiated during the
Prospectus Delivery Period
, which means such period of
time beginning on the first date of the public offering of the Underwritten Securities and
ending on the later of the Closing Date or such date, as in the opinion of counsel for the
Underwriters a prospectus relating to the Underwritten Securities is required by law to be
delivered (or required to be delivered but for Rule 172 under the Securities Act) in
connection with sales of the Underwritten Securities by any Underwriter or dealer).
(v) Notwithstanding any of the above, each of the Underwriters may use one or more term
sheets relating to the Underwritten Securities containing customary information, including
Bloomberg email announcement, price talk guidance, comparable bond pricing and final pricing
terms, not inconsistent with the form of the final term sheet set forth in the Terms
Agreement, without the prior consent of the Company, so long as such term sheet is not
required to be filed as a free writing prospectus with the Commission pursuant to Rule 433
under the Securities Act.
Section 10
.
Fees and Expenses
. The Company will pay all costs, fees, and expenses arising in
connection with the sale of any Underwritten Securities through the Underwriters and in connection
with the performance by the Company of its obligations hereunder and under any Terms Agreement,
including the following: (i) expenses incident to the preparation and filing of the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free
writing prospectus prepared by or on behalf of, used by, or referred to by the Company, and all
amendments and supplements thereto, (ii) expenses incident to the issuance and delivery of such
Underwritten Securities, (iii) the fees and disbursements of counsel for the Company and the
Companys independent registered public accounting firm, (iv) if approved by the Company in advance
and in writing, expenses incident to the qualification of such Underwritten Securities under Blue
Sky laws and other applicable state securities laws in accordance with the provisions of Section
9(a)(v) hereof, including related filing fees and the reasonable fees and disbursements of the
Underwriters counsel in connection therewith and in connection with the preparation of any survey
of Blue Sky laws, (v) expenses incident to the printing and delivery to the Underwriters, in the
quantities hereinabove stated, of copies of the Registration Statement and all amendments thereto
and of the Prospectus, each preliminary prospectus, and all amendments and supplements thereto,
(vi) the fees and expenses, if any, incurred with respect to any applicable filing with the
Financial Industry Regulatory Authority, (vii) the fees and expenses incurred in connection with
the listing of any Underwritten Securities on the NYSE and (viii) if applicable, the fees and
expenses of the trustee under the applicable Indenture. If so stated in the applicable Terms
Agreement, the Underwriters agree to reimburse the Company for the stated amount of its expenses
incurred in connection with the transactions contemplated by the applicable Terms Agreement.
Section 11
. Inspection; Place of Delivery; Payment.
(a)
Inspection
. The Company agrees to have available for inspection, checking, and packaging
by the Underwriters in The City of New York, the Underwritten Securities to be sold to the
Underwriters hereunder, not later than 1:00 P.M. on the Business Day prior to the applicable
Closing Date.
(b)
Place of Delivery of Documents, Certificates and Opinions
. The documents, certificates and
opinions required to be delivered to the Underwriters pursuant to Sections 5 and 6 hereof will be
delivered at the
Closing Location
specified in the applicable Terms Agreement, or at such other
location as may be agreed upon by the Company and the Underwriters, not later than the Closing
Time.
(c)
Payment
. Payment of the purchase price for, and delivery of certificates for, the
Underwritten Securities shall be made at the Closing Location, or at such other place as shall be
agreed upon by the Underwriters and the Company, at the
Closing Time
specified in the applicable
Terms Agreement or the applicable written notice from the Representative to the Company in
connection with an election to purchase Optional Securities, as the case may be (the date on which
the Closing Time occurs being referred to as the
Closing Date
), or such other time not later than
ten Business Days after such date as shall be agreed upon by the Representative and the Company.
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated in writing by the Company, against delivery to the Underwriters for the
respective accounts of the Underwriters of the Underwritten Securities to be purchased by them. It
is understood that each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Underwritten Securities
which it has severally agreed to purchase. The Representative, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Underwritten Securities to be purchased by any Underwriter whose funds have
not been received by the Closing Time, but such payment shall not relieve such Underwriter from its
obligations hereunder.
Section 12
. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, harmless from and against any and all losses, claims, damages, or
liabilities to which such Underwriter come subject under the Securities Act, the Exchange Act, or
any other federal or state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages, or liabilities (and actions in respect thereof) arise out of, are based upon, or
are caused by any untrue statement or allegedly untrue statement of a material fact contained in
the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto, or arise
out of, are based upon or are caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, and the Company agrees to reimburse each such indemnified party for any reasonable
legal or other expenses reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability, or action;
provided, however
, that the Company will not be
liable to the extent that such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of, are based upon, or are caused by any such untrue statement or omission or
allegedly untrue statement or omission included in or omitted from the Registration Statement, any
preliminary prospectus or the Prospectus in reliance upon and in conformity with information
furnished by the Underwriters in writing expressly for use in the Registration Statement or such
preliminary prospectus or the Time of Sale Prospectus or the Prospectus or any amendment or
supplement thereto.
(b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement, and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to the Underwriters,
but only with respect to such losses, claims, damages, and liabilities (and actions in respect
thereof) that arise out of, are based upon, or are caused by any untrue statement or omission of a
material fact or allegedly untrue statement or omission of a material fact included in or omitted
from the Registration Statement, or any preliminary prospectus or the Time of Sale Prospectus or
the Prospectus in reliance upon and in conformity with information furnished by the Underwriters in
writing expressly for use in the Registration Statement or such preliminary prospectus or the Time
of Sale Prospectus or the Prospectus or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to either paragraph (a)
or (b) of this
Section 12, such person (the
indemnified party
) will promptly notify the person against whom
such indemnity may be sought (the
indemnifying party
) in writing and the indemnifying party, upon
request of the indemnified party, will retain counsel reasonably satisfactory to the indemnified
party to represent
the indemnified party and any others the indemnifying party may designate in
such proceeding and will pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party will have the right to retain its own counsel, but
the fees and expenses of such counsel will be borne by the indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and, in the judgment of the indemnified
party, representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the indemnifying party will not,
in connection with any proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any local counsel) for all
such indemnified parties and that all such reasonable fees and expenses will be reimbursed as they
are incurred. Such firm will be designated in writing by the Underwriters (in the case of parties
indemnified pursuant to paragraph (a) of this Section 12) or by the Company (in the case of parties
indemnified pursuant to paragraph (b) of this Section 12), as the case may be. The indemnifying
party will not be liable for any settlement of any proceeding effected without its written consent,
but if settled with such consent, or if there shall be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment. No indemnifying party will, without the prior written
consent of the indemnified party, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter of such
proceeding. Any provision of this paragraph (c) to the contrary notwithstanding, no failure by an
indemnified party to notify the indemnifying party as required hereunder will relieve the
indemnifying party from any liability it may have had to an indemnified party otherwise than under
this Section 12 to the extent the indemnifying party 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.
(d) If the indemnification provided for in paragraph (a) or (b) of this Section 12 is
unavailable to an indemnified party or is insufficient in respect of any losses, claims, damages,
or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying the indemnified party thereunder, will contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other, from the offering of the Underwritten Securities pursuant
to the applicable Terms 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, on the one
hand, and the Underwriters, on the other, in connection with the statements or omissions that
resulted in such losses, claims, damages, or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other, in connection with the offering of the Underwritten Securities pursuant
to the applicable Terms Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the Underwriters, in each
case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering
price of such Underwritten Securities as set forth on such cover. The relative fault of the
Company, on the one hand, and of the Underwriters, on the other, will be determined by reference
to, among other things, whether the untrue or allegedly untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied or to be
supplied by the Company or by the Underwriters and the parties relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or omission. The Underwriters
respective obligations to contribute pursuant to this Section 12(d) are several in proportion to
the number of Underwritten Securities set forth opposite their respective names in the applicable
Terms Agreement, and not joint.
(e) The Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to paragraph (d) above were determined by pro rata allocation or by any other
method of
allocation that does not take account of the equitable considerations referred to therein. The
amount paid or payable by an indemnified party as a result of the losses, claims, damages, and
liabilities referred to in paragraph (d) above will be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or
defending any such action or claim. Any other
provisions of this Section 12 to the contrary notwithstanding, (i) the Underwriters will not be
required to contribute to the Company any amount in excess of the amount by which the total price
at which the Underwritten Securities underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has otherwise been required
to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission
(other than in reliance upon and in conformity with information furnished to the Company by the
Underwriters in writing expressly for use in the Registration Statement, the preliminary prospectus
or the Prospectus or any amendment or supplement thereto), and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.
(f) The remedies provided for in this Section 12 are not exclusive and will not limit any
rights or remedies that may otherwise be available to any indemnified party at law or in equity.
Section 13
. Termination.
The applicable Terms Agreement will automatically terminate upon the
expiration of the offering to which the Prospectus relates. The applicable Terms Agreement may not
be terminated by the Underwriters prior to delivery of and payment for such Securities except upon
the failure of any of the conditions precedent described in Section 6 hereof.
Section 14
. Survival.
The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Underwriters contained herein or made by or on
behalf of the Company or the Underwriters pursuant hereto, any certificate delivered pursuant
hereto and Section 18 shall survive the delivery of and payment for the Underwritten Securities and
shall remain in full force and effect, regardless of any termination of a Terms Agreement or any
investigation made by or on behalf of the Company or the Underwriters.
Section 15
. Notices.
All notices, documents and other communications hereunder shall be in
writing and shall be deemed received upon delivery, if delivered by hand or via facsimile
transmission (with confirmation of receipt) to a partys address or facsimile number set forth
below, in the case of the Company, and in the applicable Terms Agreement, in the case of the
Underwriters or the Representative (or to such other address or facsimile number as a party may
hereafter designate to the other parties in writing), and shall be deemed received one Business Day
after having been mailed via Express Mail or deposited with Federal Express or any nationally
recognized commercial courier service for next day delivery to such address. In the event that
any Terms Agreement or any certificate or opinion to be delivered pursuant to Section 5 hereof is
delivered via facsimile transmission, the parties will use reasonable efforts to ensure that
original copies of such documents are distributed promptly thereafter.
The address and facsimile number for the Company, unless otherwise specified, is as follows:
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
Attn: Chief Financial Officer
General Counsel
Facsimile no: 914-253-3123
Section 16
. Successors; Non-transferability.
The applicable Terms Agreement shall inure to the
benefit of and be binding upon the Company and the Underwriters, their respective successors, and
the officers, directors, and controlling persons referred to in Section 12 hereof. No other person
will have any right or obligation hereunder. No party to the applicable Terms Agreement may assign
its rights thereunder without the written consent of the other parties.
Section 17
. Counterparts.
The Terms Agreement may be signed in any number of counterparts,
each of which will be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
Section 18.
Applicable Law.
These Standard Provisions and any applicable Terms Agreement will
be governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflicts of law.
Section 19
. Headings.
The headings of the sections of these Standard Provisions have been
inserted for convenience of reference only and will not affect the construction of any of the terms
or provisions hereof.
Section 20
. No Advisory or Fiduciary Relationships.
The Company acknowledges and agrees that
(a) the purchase and sale of the Underwritten Securities pursuant to the Standard Provisions and
the applicable Terms Agreement, including the determination of the public offering price of the
Underwritten Securities and any related discounts and commissions, is an arms-length commercial
transaction between the Company, on the one hand, and the several Underwriters, on the other hand,
(b) in connection with the offering contemplated hereby and the process leading to such transaction
each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of
the Company, or its stockholders, creditors, employees or any other party, (c) no Underwriter has
assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect
to the offering contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on other matters) and no Underwriter
has any obligation to the Company with respect to the offering contemplated hereby except the
obligations expressly set forth in the Standard Provisions and the applicable Terms Agreement, (d)
the Underwriters and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company, and (e) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the
extent it deemed appropriate.
Exhibit A
PEPSICO, INC.
[IDENTIFY UNDERWRITTEN SECURITIES]
TERMS AGREEMENT
[Date]
|
|
|
To:
|
|
PepsiCo, Inc.
|
|
|
700 Anderson Hill Road
|
|
|
Purchase, New York 10577
|
Ladies and Gentlemen:
We understand that PepsiCo, Inc., a North Carolina corporation (the
Company
), proposes to
issue and sell [describe Underwritten Securities, and specify if Underwritten Securities include
both Firm Securities and Optional Securities] (such securities also being hereinafter referred to
as the
Underwritten Securities
) subject to the terms and conditions stated herein and in the
PepsiCo, Inc. Underwriting Agreement Standard Provisions dated as of October [___], 2008 attached
hereto (the
Standard Provisions
). Each of the applicable provisions in the Standard Provisions is
incorporated herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full herein. We, the
underwriters named below (the
Underwriters
), offer to purchase, severally and not jointly, the
number or amount of [Underwritten] [Firm] Securities opposite our names set forth below at a
purchase price set forth below.
|
|
|
|
|
|
|
[Number] [Principal
|
|
|
|
Amount] of
|
|
|
|
[Underwritten] [Firm]
|
|
Underwriters
|
|
Securities
|
|
[Name]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
|
|
|
The Underwritten Securities and the offering thereof shall have the following additional
terms:
Terms of the Underwritten Securities and the Offering
[Number][Principal Amount] of
Underwritten Securities
[Number of Firm Securities]
[Number of Optional Securities]
Initial public offering price
Purchase price
Lock-up period specified in Section 9(a)(vi) of the Standard Provisions (if applicable)
___days beginning from the date of this Terms Agreement
Time of Sale Prospectus
Base Prospectus dated October ___, 2008, preliminary prospectus supplement dated ___, 20___,
Representative of the Underwriters
Address and facsimile number for notices to the Representative and the Underwriters
Time of Sale
Closing Time
Closing Location
Other terms and conditions
[Amount of reimbursement to the Company from the Underwriters]
The Representative represents and warrants that it is duly authorized to execute and deliver
this Terms Agreement on behalf of the several Underwriters named above.
Exhibit B-1
FORM OF OPINION OF COMPANYS NEW YORK COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)
[Davis Polk & Wardwell Letterhead]
October 24, 2008
|
|
|
Re:
|
|
PepsiCo, Inc. 7.90% Senior Notes due 2018
|
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
The Williams Capital Group, L.P.
as Representatives of the several Underwriters named in the Underwriting
Agreement referred to below
|
|
|
c/o
|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
250 Vesey Street
New York, New York 10080
|
Ladies and Gentlemen:
We have acted as special counsel for PepsiCo, Inc. (the Company), a North Carolina
corporation, in connection with the Terms Agreement dated October 21, 2008 (together with the
incorporated Underwriting Agreement Standard Provisions dated October 21, 2008, the Underwriting
Agreement) among the Company and you, as representatives of the several underwriters named therein
(the Underwriters), under which you and the other Underwriters have severally agreed to purchase
from the Company $2,000,000,000 aggregate principal amount of its 7.90% Senior Notes due 2018 (the
Notes). The Notes are to be issued pursuant to the provisions of an Indenture dated as of May
21, 2007 (the Indenture) between the Company and The Bank of New York Mellon, as Trustee. This
opinion is furnished to you at the request of the Company pursuant to Section 5(a) of the
Underwriting Agreement.
We have examined originals or copies, certified or otherwise identified to our satisfaction,
of such documents, corporate records, certificates of public officials and other instruments as we
have deemed necessary or advisable for the purpose of rendering this opinion.
We have participated in the preparation of the Companys registration statement on Form S-3
(File No. 333-154314) (other than the documents incorporated by reference therein (the
Incorporated Documents)) filed with the Securities and Exchange Commission (the Commission)
pursuant to the provisions of the Securities Act of
1933, as amended (the Act), relating to the registration of securities (the Shelf
Securities) to be issued from time to time by the Company, the preliminary prospectus supplement
dated October 21, 2008 relating to the Notes, the free writing prospectus set forth in Schedule II
to the Underwriting Agreement (the Issuer Free Writing Prospectus) and the prospectus supplement
dated October 21, 2008 relating to the Notes (the Prospectus Supplement), and have reviewed the
Incorporated Documents. The registration statement became effective under the Act upon the filing
of the registration statement with the Commission on October 15, 2008 pursuant to Rule 462(e) under
the Act. The registration statement at the date of the Underwriting Agreement, including the
Incorporated Documents and the information deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430B under the Act, is hereinafter referred to as the
Registration Statement, and the related prospectus (including the Incorporated Documents) dated
October 15, 2008 relating to the Shelf Securities is hereinafter referred to as the Basic
Prospectus. The Basic Prospectus, as supplemented by the Prospectus Supplement, in the form first
used to confirm sales of the Notes (or in the form first made available by the Company to the
Underwriters to meet requests of purchasers of the Notes under Rule 173 under the Act), is
hereinafter referred to as the Prospectus.
We have assumed the conformity of the documents filed with the Commission via the Electronic
Data Gathering, Analysis and Retrieval System (EDGAR), except for required EDGAR formatting
changes, to physical copies of the documents submitted for our examination.
Based upon the foregoing, we are of the opinion that:
1. The Indenture was duly qualified under the Trust Indenture Act of 1939, as
amended, upon the filing of the Registration Statement with the Commission on October 15,
2008 pursuant to Rule 462(e) under the Act, and assuming due authorization, execution and
delivery thereof by the Company, the Indenture is a valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors rights generally, concepts of
reasonableness and equitable principles of general applicability,
provided
that counsel
need not express any opinion as to (w) the enforceability of any waiver of rights under any
usury or stay law, (x) the applicability (and if applicable, the effect) of Section 548 of
the United States Bankruptcy Code or any comparable provision of state law to the questions
addressed above or on the conclusions expressed with respect thereto, or (y) the validity,
legally binding effect or enforceability of any provision that permits holders to collect
any portion of stated principal amount upon acceleration of the Notes to the extent
determined to constitute unearned interest.
2. Assuming the due authorization of the Notes by the Company, the Notes, when
executed and authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters pursuant to the Underwriting Agreement, will be valid
and binding obligations of the Company, enforceable in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors rights
generally, concepts of
reasonableness and equitable principles of general applicability, and will be entitled
to the benefits of the Indenture pursuant to which such Notes are to be issued,
provided
that counsel need not express any opinion as to (w) the enforceability of any waiver of
rights under any usury or stay law, (x) the applicability (and if applicable, the effect)
of Section 548 of the United States Bankruptcy Code or any comparable provision of state
law to the questions addressed above or on the conclusions expressed with respect thereto,
or (y) the validity, legally binding effect or enforceability of any provision that permits
holders to collect any portion of stated principal amount upon acceleration of the Notes to
the extent determined to constitute unearned interest.
3. No consent, approval, authorization, or order of, or qualification with, any
state governmental body or agency under the laws of the State of New York or any federal
law of the United States of America that in our experience is normally applicable to
general business corporations in relation to transactions of the type contemplated by the
Indenture, the Notes and the Underwriting Agreement (collectively, the Documents) is
required for the execution, delivery and performance by the Company of its obligations
under the Documents, except such as may be required under federal or state securities or
Blue Sky laws as to which we express no opinion in this paragraph (3).
4. Any required filing of the Prospectus pursuant to Rule 424(b) under the Act has
been made in the manner and within the time period required by Rule 424(b); any required
filing of the Issuer Free Writing Prospectus pursuant to Rule 433 under the Act has been
made in the manner and within the time period required by Rule 433(d); and, to our
knowledge, no stop order suspending the effectiveness of the Registration Statement has
been issued under the Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
5. We have considered the statements included in the Prospectus under the captions
Description of Debt Securities and Description of Notes insofar as they summarize
provisions of the Indenture and the Notes. In our opinion, such statements fairly summarize
these provisions in all material respects.
6. The statements included in the Prospectus under the caption Material United
States Federal Tax Considerations, insofar as they purport to describe provisions of U.S.
federal income tax laws or legal conclusions with respect thereto, fairly and accurately
summarize the matters referred to therein in all material respects.
In rendering the opinions in paragraphs (1) through (3) above, we have assumed that each
party to the Documents has been duly incorporated and is validly existing and in good standing
under the laws of the jurisdiction of its organization. In addition, we have assumed that the
execution, delivery and performance by each party thereto of each Document to which it is a party,
(i) are within its corporate powers, (ii) do not contravene, or constitute a default under, the
certificate of incorporation or bylaws or other constitutive documents of such party, (iii) other
than as expressly covered in
paragraph (3) above in respect of the Company, require no action by or in respect of, or
filing with, any governmental body, agency or official and (iv) do not contravene, or constitute a
default under, any provision of applicable law or regulation or any judgment, injunction, order or
decree or any agreement or other instrument binding upon such party, and that each Document is a
valid, binding and enforceable agreement of each party thereto, other than the Company.
We are members of the Bar of the State of New York, and the foregoing opinion is limited to
the laws of the State of New York and the federal laws of the United States of America. Insofar as
the foregoing opinion involves matters governed by the laws of the State of North Carolina, we have
relied without independent investigation on the opinion of Womble Carlyle Sandridge & Rice, PLLC
delivered to you today pursuant to the Underwriting Agreement.
This opinion is rendered solely to you and the other several Underwriters in connection with
the Underwriting Agreement. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person (including any person acquiring Notes from the several
Underwriters) or furnished to any other person without our prior written consent.
Exhibit B-2
FORM OF DISCLOSURE LETTER OF COMPANYS NEW YORK
COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(a)
[Davis Polk & Wardwell Letterhead]
October 24, 2008
|
|
|
Re:
|
|
PepsiCo, Inc. 7.90% Senior Notes due 2018
|
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
The Williams Capital Group, L.P.
as Representatives of the several Underwriters named in the Underwriting
Agreement referred to below
|
|
|
c/o
|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
250 Vesey Street
New York, New York 10080
|
Ladies and Gentlemen:
We have acted as special counsel for PepsiCo, Inc. (the Company), a North Carolina
corporation, in connection with the Terms Agreement dated October 21, 2008 (together with the
incorporated Underwriting Agreement Standard Provisions dated October 21, 2008, the Underwriting
Agreement) among the Company and you, as representatives of the several underwriters named therein
(the Underwriters), under which you and the other Underwriters have severally agreed to purchase
from the Company $2,000,000,000 aggregate principal amount of its 7.90% Senior Notes due 2018 (the
Notes). The Notes are to be issued pursuant to the provisions of an Indenture dated as of May
21, 2007 (the Indenture) between the Company and The Bank of New York Mellon, as Trustee (the
Trustee). This opinion is furnished to you at the request of the Company pursuant to Section
5(a) of the Underwriting Agreement.
We have participated in the preparation of the Companys registration statement on Form S-3
(File No. 333-154314) (other than the documents incorporated by reference therein (the
Incorporated Documents)) filed with the Securities and Exchange Commission (the Commission)
pursuant to the provisions of the Securities Act of 1933, as amended (the Act), relating to the
registration of securities (the Shelf Securities) to be issued from time to time by the Company,
the preliminary prospectus supplement dated October 21, 2008 (the Preliminary Prospectus
Supplement) relating to the Notes, the free writing prospectus set forth in Schedule II to the
Underwriting Agreement and the prospectus supplement dated October 21, 2008 relating to the Notes
(the Prospectus Supplement), and have reviewed the Incorporated Documents. The registration
statement became effective under the Act upon the filing of the registration statement with the
Commission on October 15, 2008 pursuant to Rule 462(e) under the Act. The registration statement
at the date of the Underwriting Agreement, including the Incorporated Documents and the information
deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430B
under the Act, is hereinafter referred to as the Registration Statement, and the related
prospectus (including the Incorporated Documents) dated October 15, 2008 relating to the Shelf
Securities is hereinafter referred to as the Basic Prospectus. The Basic Prospectus, as
supplemented by the Preliminary Prospectus Supplement, together with the free writing prospectus
set forth in Schedule II to the Underwriting Agreement for the Notes are hereinafter referred to as
the Disclosure Package. The Basic Prospectus, as supplemented by the Prospectus Supplement, in
the form first used to confirm sales of the Notes (or in the form first made available by the
Company to the Underwriters to meet requests of purchasers of the Notes under Rule 173 under the
Act), is hereinafter referred to as the Prospectus.
We have assumed the conformity of the documents filed with the Commission via the Electronic
Data Gathering, Analysis and Retrieval System (EDGAR), except for required EDGAR formatting
changes, to physical copies of the documents submitted for our examination.
We note that many determinations involved in the preparation of the Registration Statement,
the Disclosure Package and the Prospectus are of a wholly or partially non-legal character or
relate to legal matters outside the scope of our opinion separately delivered to you today in
respect of certain matters under the laws of the State of New York and the federal laws of the
United States of America. As a result, we are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Disclosure Package and the Prospectus, and we have not ourselves
checked the accuracy, completeness or fairness of, or otherwise verified, the information furnished
in such documents (except to the extent expressly set forth in our opinion letter separately
delivered to you today as to statements included in the Prospectus under the captions Description
of Notes, Material United States Federal Tax Considerations and Description of Debt
Securities). However, in the course of our acting as counsel to the Company in connection with
the preparation of the Registration Statement, the Disclosure Package and the Prospectus, we have
generally reviewed and discussed with your representatives and your counsel and with certain
officers and employees of, and independent public accountants for, the Company the information
furnished, whether or not subject to our check and verification. We have also reviewed and relied
upon certain corporate records and documents, letters from counsel and accountants and oral and
written statements of officers and other representatives of the Company and others as to the
existence and consequence of certain factual and other matters.
On the basis of the information gained in the course of the performance of the services
rendered above, but without independent check or verification except as stated above:
(i) the Registration Statement and the Prospectus appear on their face to be appropriately
responsive in all material respects to the requirements of the Act and the applicable rules and
regulations of the Commission thereunder; and
(ii) nothing has come to our attention that causes us to believe that, insofar as relevant to
the offering of the Notes:
(a) on the date of the Underwriting Agreement, the Registration Statement contained
any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
(b) at the Time of Sale, the Time of Sale Prospectus contained any untrue statement of
a material fact or omitted 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, or
(c) the Prospectus as of the date of the Underwriting Agreement or as of the Closing
Date contained or contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In providing this letter to you and the other several Underwriters, we have not been called
to pass upon, and we express no view regarding, the financial statements or financial schedules or
other financial or accounting data included in the Registration Statement, the Time of Sale
Prospectus, the Prospectus, or the Statement of Eligibility of the Trustee on Form T-1. In
addition, we express no view as to the conveyance of the Time of Sale Prospectus or the information
contained therein to investors.
This letter is delivered solely to you and the other several Underwriters in connection with
the Underwriting Agreement. This letter may not be relied upon by you for any other purpose or
relied upon by any other person (including any person acquiring Notes from the several
Underwriters) or furnished to any other person without our prior written consent.
Exhibit B-3
FORM OF OPINION OF COMPANYS INTERNAL COUNSEL TO BE
DELIVERED PURSUANT TO SECTION 5(a)
October 24, 2008
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
The Williams Capital Group, L.P.
as Representatives of the several Underwriters named in the Underwriting Agreement
referred to below
c/o
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
250 Vesey Street
New York, NY 10080
Ladies and Gentlemen:
I am Senior Vice President, Deputy General Counsel and Assistant Secretary of PepsiCo, Inc., a
North Carolina corporation (the
Company
), and have acted in such capacity in connection with the
Terms Agreement, dated October 21, 2008 (incorporating the Underwriting Agreement Standard
Provisions dated October 21, 2008) (the Terms Agreement and together with the Standard
Provisions, the
Underwriting Agreement
) between the Company and you, as representative of the
several underwriters named in the Terms Agreement thereto (the
Underwriters
), under which you and
the other Underwriters have severally agreed to purchase from the Company $2,000,000,000 aggregate
principal amount of its 7.90% Senior Notes due 2018 (the
Notes
). The Notes are to be issued
pursuant to the provisions of an Indenture dated as of May 21, 2007 (the
Indenture
) between the
Company and The Bank of New York Mellon, as Trustee (the
Trustee
). Capitalized terms used herein
and not otherwise defined herein have the meanings given to them in the Underwriting Agreement.
I have examined originals or copies, certified or otherwise identified to my satisfaction, of
such documents, corporate records, certificates of public officials and other instruments as I have
deemed necessary for the purposes of rendering this opinion. I have assumed the capacity of all
natural persons and the genuineness of all signatures.
Based upon the foregoing, I am of the opinion that:
1. The execution, delivery and performance by the Company of its obligations under the
Underwriting Agreement, the Indenture and the Notes will not contravene any
provision of the Restated Charter or By-Laws of the Company, or of any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material to the Company and
its subsidiaries taken as a whole, or, to counsels knowledge, of any judgment, order, or decree of
any governmental body, agency, or court having jurisdiction over the Company or any of its
subsidiaries, in each of the foregoing cases except as would not reasonably be expected to have a
material adverse effect on the business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
2. To counsels knowledge, there is no legal or governmental proceeding pending or threatened
to which the Company or any of its significant subsidiaries is a party, or by which any of the
properties of the Company or its significant subsidiaries is bound, which would reasonably be
expected to have a material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole; and to counsels knowledge, there
is no agreement or other document that is required to be described in the Registration Statement,
the Prospectus or the Time of Sale Prospectus, or that is required to be filed as an exhibit to the
Registration Statement, that is not so described or filed.
In rendering such opinion, I may rely, as to matters of fact, to the extent I deem proper, on
certificates of responsible officers of the Company and public officials. Such opinion will be
limited to the laws of the State of New York and the federal laws of the United States of America.
Insofar as such opinion involves matters governed by the laws of North Carolina, I am relying, with
your permission without independent investigation, on the opinion of North Carolina counsel for the
Company.
This opinion is rendered solely to you in connection with the above matter at the request of
the Company. This opinion may not be relied upon by you for any other purpose or relied upon by or
furnished to any other person without my prior written consent.
|
|
|
|
|
|
|
Very truly yours,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President, Deputy General
|
|
|
|
|
Counsel and Assistant Secretary
|
|
|
Exhibit B-4
FORM OF OPINION OF COMPANYS NORTH CAROLINA COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)
[WCSR LETTERHEAD]
October 24, 2008
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
The Williams Capital Group, L.P.
as Representatives of the several Underwriters named in the Underwriting Agreement
|
|
|
c/o
|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
250 Vesey Street
New York, New York 10080
|
Ladies and Gentlemen:
We have acted as special North Carolina counsel to PepsiCo, Inc., a North Carolina corporation
(the Company), in connection with the Terms Agreement dated October 21, 2008 (incorporating by
reference the Underwriting Agreement Standard Provisions (the Standard Provisions) dated October
21, 2008) (the Terms Agreement and, together with the Standard Provisions, the Underwriting
Agreement) between the Company and you, as representatives of the several underwriters named in
the Underwriting Agreement (the Underwriters), under which you and the other Underwriters have
severally agreed to purchase from the Company $2,000,000,000 aggregate principal amount of its
7.90% Senior Notes Due 2018 (the Notes). The Notes are to be issued pursuant to the provisions
of an indenture dated as of May 21, 2007 between the Company and The Bank of New York Mellon, as
trustee (the Indenture). This opinion is delivered to you pursuant to Section 5(a) of the
Standard Provisions. Capitalized terms used and not otherwise defined in this opinion have the
meanings given to them in the Underwriting Agreement.
As the Companys special North Carolina counsel, we have reviewed the Companys articles of
incorporation and by-laws, each as amended to date, and the Underwriting Agreement, and have
examined the originals, or copies certified or otherwise identified to our satisfaction, of
corporate records, certificates of public
officials and of representatives of the Company, statutes and other instruments and documents, as a
basis for the opinions hereinafter expressed. In rendering this opinion, we have relied upon
certificates of public officials and representatives of the Company with respect to the accuracy of
the factual matters contained in such certificates.
In connection with such review, we have assumed with your permission (a) that the Underwriting
Agreement, the Indenture and all other documents that are the subject of this opinion or on which
this opinion is based (the Transaction Documents) have been properly authorized, executed and
delivered by each of the respective parties thereto other than the Company; (b) the genuineness of
all signatures and the legal capacity of all signatories; (c) the authenticity of all documents
submitted to us as originals and the conformity to original documents of all documents submitted to
us as certified or photostatic copies; (d) the proper issuance and accuracy of certificates of
public officials and representatives of the Company; (e) the due authentication of the Notes in
accordance with the Indenture and payment by the Underwriters of the purchase price for the Notes
in accordance with the Underwriting Agreement; and (f) the truth and accuracy of the
representations, warranties and covenants of the Underwriters set forth in the Underwriting
Agreement.
This opinion is limited to the laws of the State of North Carolina, excluding local laws of
the State of North Carolina (
i.e.
, the statutes and ordinances, the administrative decisions and
the rules and regulations of counties, towns, municipalities and special political subdivisions of,
or authorities or quasi-governmental bodies constituted under the laws of, the State of North
Carolina and judicial decisions to the extent they deal with any of the foregoing) and the
securities or Blue Sky laws of the State of North Carolina, and we are expressing no opinion as to
the effect of the laws of any other jurisdiction.
The opinion in paragraph 1 relating to the existence of the Company in the State of North
Carolina is given solely in reliance on a certificate of existence issued by the Secretary of State
of the State of North Carolina dated October 24, 2008.
Based on and subject to the foregoing and the qualifications and limitations set forth below,
and having regard for such legal considerations as we deem relevant, it is our opinion that:
1. The Company is a corporation in existence under the laws of the State of North Carolina,
with corporate power to conduct its business as described in the Time of Sale Prospectus and the
Prospectus.
2. The Company has authorized by all necessary corporate action the execution and delivery of
the Underwriting Agreement, the Indenture and the Notes.
3. The Underwriting Agreement, the Indenture and the Notes have been duly executed by the
Company.
4. The execution and delivery of and performance by the Company of its obligations under the
Underwriting Agreement, the Indenture and the Notes do not violate any provision of the articles of
incorporation or by-laws of the Company.
5. No consent, approval, authorization, or order of or qualification with any North Carolina
governmental body or agency is required to be obtained or made by the Company for the execution,
delivery and performance by the Company of the Underwriting Agreement or the issuance of the Notes,
except as may be required by the Blue Sky or other securities laws if the Notes are offered or sold
in North Carolina and except for consents, approvals, authorizations, actions, filings and
registrations which, if not obtained or made, are not reasonably likely to have a material adverse
effect on the business, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
Nothing contained in this opinion letter shall be construed as an opinion as to the
enforceability of the Transaction Documents or as an opinion as to whether the execution and
delivery of the Indenture and the Notes, or the authorization thereof, comply with applicable
provisions of such instruments and of the Trust Indenture Act of 1939, as amended. This opinion
letter is delivered solely for your benefit in connection with the Underwriting Agreement and the
transactions provided for therein and may not be quoted in whole or in part, referred to, filed
with any governmental agency or otherwise used or relied upon by any other person or for any other
purpose without our prior written consent.
This opinion is rendered as of the date hereof, and we undertake no obligation to advise you
of any changes in applicable law or any other matters that may come to our attention after the date
hereof.
KNS
RHP
Exhibit C
FORM OF ASSISTANT SECRETARYS CERTIFICATE
I,
, the duly qualified, elected, and acting Secretary of PepsiCo,
Inc., a company organized under the laws of the State of North Carolina (the
Company
), hereby
certify as follows:
1. Attached hereto as Exhibit A is a true and complete copy of the Restated Articles of
Incorporation of the Company, certified as of
by the Secretary of
State of the State of North Carolina. No further amendments or supplements to the Restated Articles
of Incorporation have been proposed to or approved by the Board of Directors or shareholders of the
Company.
2. Attached hereto as Exhibit B is a true, correct, and complete copy of the By-Laws of the
Company. Such By-Laws have been in effect at all times since
.
3. Attached hereto as Exhibit C are true, correct and complete copies of certain resolutions
duly adopted by the Board of Directors of the Company on
. Such
resolutions have not been amended or modified, are in full force and effect in the form adopted and
are the only resolutions adopted by the Board of Directors of the Company or a duly authorized
committee thereof relating to (i) the authorization of the Companys Registration Statement on Form
S-3 (File No. 333
), (the
Registration Statement
) filed with the
Securities and Exchange Commission (the
Commission
) for the registration of Companys securities,
(ii) the execution and delivery of the Terms Agreement, dated
(the
Terms Agreement
), between the Company and
(the
Underwriters
), and
(iii) all other actions relating to the foregoing. Such resolutions have not been amended,
rescinded or modified since their adoption (other than as expressly set forth in such resolutions)
and remain in full force and effect as of the date of this Certificate.
4. Each person who, as a director or officer of the Company or attorney-in-fact of such
director or officer, signed (i) the Registration Statement, (ii) the Terms Agreement, and (iii) any
document delivered prior hereto or on the date of this Certificate in connection with the execution
and filing of the Registration Statement, or the execution and delivery of the Terms Agreement, or
the transactions contemplated thereby, or the execution and delivery of the certificates
representing the Shares, was, at the time or the respective times of such execution and delivery of
such documents, and, in the case of the filing of the Registration Statement with the Commission,
duly elected or appointed, qualified and acting as such director or officer or duly appointed and
acting as such attorney-in-fact and the signatures of such persons appearing on such documents are
their genuine signatures or, in case of the certificates evidencing the Shares, the true facsimile
thereof.
5. The minute book records of the Company relating to proceedings of the Board of Directors of
the Company made available to
, counsel for the
Underwriters, are true and correct and constitute all such records in the possession and control of
the Company through and including
.
The persons named below are duly qualified, elected, and acting officers of the Company, have
been duly elected or appointed to the offices set forth opposite their respective names, have held
such offices at all times relevant to the preparation of the Registration Statement, and hold such
offices as of the date hereof. The signatures set forth below opposite the names of such persons
are the genuine signatures of such persons.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Company as of the
___ day of
, 20___.
I,
, a Vice President of the Company, hereby certify that
is the duly qualified, elected, and acting
of the Company, has been duly elected or appointed
to such offices, has held such offices at all times relevant to the preparation of the Registration
Statement, holds such offices as of the date hereof, and that the signature set forth above is his
genuine signature.
IN
WITNESS WHEREOF, I have hereunto set my hand as of the ___ day of
, 20___.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
Vice President
|
|
|
Exhibit D
FORM OF OFFICERS CERTIFICATE
[Name
, [title:]
,
and [name:]
, [title:]
, of PepsiCo, Inc., a corporation organized under
the laws of the State of North Carolina (the
Company
), each hereby certifies as follows:
1. I have examined the Companys Registration Statement on Form S-3 (File
No. 333-
) (the
Registration Statement
) filed by the Company with the
Securities and Exchange Commission (the
Commission
) on October ___, 2008, including all of the
documents filed as exhibits thereto. Capitalized terms used herein and not otherwise defined have
the meanings ascribed to such terms by the prospectus filed as part of the Registration Statement
(such prospectus hereinafter the
Prospectus
).
2. To my knowledge, no proceedings for the merger, consolidation, liquidation, or dissolution
of the Company or the sale of all or substantially all of its assets are pending or contemplated.
3. To my knowledge, the Registration Statement as supplemented by the Time of Sale Prospectus
(i) contains no untrue statement of a material fact regarding the Company or any of its
consolidated subsidiaries and (ii) does not omit to state any material fact necessary to make any
such statement, in the light of the circumstances under which it was made, not misleading.
IN
WITNESS WHEREOF, I have hereunto set my hand as of the ___ of
,
20___.
Exhibit 1.2
BOTTLING GROUP, LLC
(the Company)
Guaranteed Debt Securities
TERMS AGREEMENT
October 21, 2008
To: The Representatives of the Underwriters identified herein
Dear Sirs:
The Company agrees to sell to the several Underwriters named in Schedule A hereto for their
respective accounts, on and subject to the terms and conditions of the Underwriting Agreement dated
October 21, 2008 (the
Underwriting Agreement
) attached hereto as Exhibit A, and the several
Underwriters agree to purchase, the following securities (
Offered Securities
) on the following
terms:
Title:
6.95% Senior Notes Due 2014 (the Notes).
Principal Amount:
$1,300,000,000.
Interest:
6.95% per annum, from October 24, 2008, payable semi-annually on March 15 and
September 15, commencing March 15, 2009, to holders of record on the preceding March 1 or September
1, as the case may be.
Maturity:
March 15, 2014.
Optional Redemption:
Make-whole at any time, with prior consent of PepsiCo, Inc., at the
greater of (i) 100% of the principal amount of the Offered Securities being redeemed or (ii)
discounted present value at Treasury rate plus 50 basis points, as more fully described in the
prospectus supplement.
Guarantee of Notes:
PepsiCo, Inc. will be obligated to guarantee the Notes on and after the
guarantee commencement date, except that under certain circumstances the guarantee may not become
effective or may become effective as to less than all of the principal and interest and premium, if
any, on the Notes, as more fully described in the Indenture.
Sinking Fund:
None
Listing:
None.
Purchase Price:
99.793% of principal amount, plus accrued interest, if any, from October 24,
2008.
Gross Spread:
0.60% of principal amount.
Applicable Time:
4:30 p.m. (Eastern Time) on the date of this Terms Agreement.
Final Term Sheet:
The Company and the Guarantor will prepare and file a final term sheet
relating to the Offered Securities as contemplated in Section 4(b) of the Underwriting Agreement.
The final term sheet for the Notes is set forth in Exhibit B hereto.
Closing:
9:30 a.m. on October 24, 2008, or such other time as may be agreed by the parties
hereto, at the offices of Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New
York 10006, in Federal (same day) funds.
Settlement and Trading
: Book-Entry Only via DTC.
Names and Addresses of the Representatives for purposes of Section 10 of the Underwriting
Agreement:
|
|
|
Name
|
|
Address
|
|
|
|
Morgan Stanley & Co. Incorporated
|
|
1585 Broadway, 4th Floor
|
|
|
New York, NY 10036
|
|
|
|
Deutsche Bank Securities Inc.
|
|
Attn: Investment Grade Debt Capital Markets Syndicate Desk, 3
rd
Floor
|
|
|
60 Wall Street
|
|
|
New York, NY 10005
|
|
|
|
HSBC Securities (USA) Inc.
|
|
HSBC Tower 3
|
|
|
452 5
th
Avenue
|
|
|
New York, NY 10018
|
|
|
|
J.P. Morgan Securities Inc.
|
|
Attn: High Grade Syndicate Desk 8
th
Floor
|
|
|
270 Park Avenue
|
|
|
New York, NY 10017
|
|
|
|
Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
|
|
4 World Financial Center
250 Vesey Street
|
|
|
New York, New York 10080
|
The principal amount of the Offered Securities to be purchased by each of the Underwriters is
set forth opposite their names in Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein by reference in their
entirety and shall be deemed to be a part hereof to the same extent as if such provisions had been
set forth in full herein.
The Offered Securities will be made available for checking and packaging at the office of
Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New York 10006 at least 24 hours
prior to the Closing.
For purposes of Sections 1 and 7 of the Underwriting Agreement, the only information furnished
to the Company or the Guarantor by any Underwriter for use in the Company Registration Statement,
any Company Statutory Prospectus, the Company Prospectus, any Issuer Free Writing Prospectus, the
Guarantor Registration Statement, any Guarantor Statutory Prospectus or the Guarantor Prospectus
consists of the following information in each of the Company Statutory Prospectus, Company
Prospectus, Guarantor Statutory Prospectus and the Guarantor Prospectus furnished on behalf of each
Underwriter: (i) the names of the Underwriters contained on the front and back covers of the
prospectus supplement and in the table set out in the first paragraph under the caption
Underwriting in the prospectus supplement, (ii) the sentence on the cover of the prospectus
supplement beginning with the phrase The underwriters expect to deliver the notes in book-entry
form, and (iii) the information contained in the third and seventh paragraphs under the caption
Underwriting in the prospectus supplement.
2
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company one of the counterparts hereof, whereupon it will become a binding agreement
among the Company, the Guarantor and the several Underwriters in accordance with its terms.
Very truly yours,
|
|
|
|
|
|
Bottling Group, LLC
|
|
|
By
|
/s/ Brian Newman
|
|
|
Name:
|
Brian Newman
|
|
|
Title:
|
Managing Director-Delegatee
|
|
|
|
|
|
|
|
|
PepsiCo, Inc.,
As Guarantor
|
|
|
By
|
/s/ Lionel L. Nowell III
|
|
|
Name:
|
Lionel L. Nowell III
|
|
|
Title:
|
Senior Vice President and Treasurer
|
|
|
The foregoing Terms Agreement is hereby
confirmed
and accepted as of the date first
above written.
Morgan Stanley & Co. Incorporated
Deutsche Bank Securities Inc.
HSBC Securities (USA) Inc.
J.P. Morgan Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Acting on behalf of themselves and as the
Representatives
of the several
Underwriters.
By
Morgan Stanley & Co. Incorporated
|
|
|
|
|
|
|
|
|
By
|
|
/s/ Yurij Slyz
|
|
|
|
|
Name: Yurij Slyz
|
|
|
|
|
Title: Vice President
|
|
|
SCHEDULE A
|
|
|
|
|
|
|
Principal
|
|
Underwriter
|
|
Amount of Notes
|
|
Morgan Stanley & Co. Incorporated
|
|
$
|
390,000,000
|
|
Deutsche Bank Securities Inc.
|
|
|
195,000,000
|
|
HSBC Securities (USA) Inc.
|
|
|
195,000,000
|
|
J.P. Morgan Securities Inc.
|
|
|
195,000,000
|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
|
|
|
13,000,000
|
|
Banc of America Securities LLC
|
|
|
99,666,667
|
|
Citigroup Global Markets Inc.
|
|
|
99,666,666
|
|
Credit Suisse Securities (USA) LLC
|
|
|
99,666,667
|
|
The Williams Capital Group, L.P.
|
|
|
13,000,000
|
|
Total
|
|
$
|
1,300,000,000
|
|
|
|
|
|
EXHIBIT A
Underwriting Agreement dated October 21, 2008
Dated October 21, 2008
BOTTLING GROUP, LLC
Guaranteed Debt Securities
UNDERWRITING AGREEMENT
Bottling Group, LLC, a Delaware limited liability company (the
Company
), proposes to issue
and sell from time to time certain of its unsecured debt securities registered under the
registration statement referred to in Section 1.A.(a) (the
Registered Securities
). The
Registered Securities will be issued under an indenture (the
Indenture
), to be entered into among
the Company, PepsiCo, Inc., a North Carolina corporation (the
Guarantor
), and The Bank of New
York Mellon, as trustee (the
Trustee
), in one or more series, which series may vary as to
interest rates, maturities, redemption provisions, selling prices and other terms, with all such
terms for any particular series of the Registered Securities being determined at the time of sale.
Payment of principal of and interest and premium, if any, on the Registered Securities will be
unconditionally and irrevocably guaranteed on a senior unsecured basis (the
Guarantee
) by the
Guarantor, with the Guarantee becoming effective on the Guarantee Commencement Date (as defined in
the Indenture), except that, under certain circumstances described in the Indenture, the Guarantee
may not become effective or may become effective as to less than all of the principal of and
interest and premium, if any, on the Registered Securities. Particular series of the Registered
Securities will be sold pursuant to a Terms Agreement referred to in Section 2, for resale in
accordance with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering together with the Guarantee are
collectively referred to hereinafter as the
Offered Securities
. The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
Underwriters
of such
securities, and the representative or representatives of the Underwriters, if any, specified in a
Terms Agreement referred to in Section 2 are hereinafter referred to as the
Representatives
;
provided
,
however
, that if the Terms Agreement does not specify any representative
of the Underwriters, the term Representatives, as used in this Agreement (other than in Sections
1.A.(b), 1.B.(b), 6(d) and 7 and the second sentence of Section 2), shall mean the Underwriters.
1.
Representations and Warranties.
A.
Representations and Warranties of the Company.
The Company, as of the date of each Terms Agreement referred to in Section 2, represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-132716), including a prospectus, relating to the
Registered Securities has been filed by the Company with the Securities and Exchange
Commission (the
Commission
) and has become effective.
Company Registration Statement
as
of any time means such registration statement in the form then filed with the Commission,
including any amendment thereto as of or prior to such time,
3
any document then incorporated
by reference therein and any information in a prospectus
or prospectus supplement (including a preliminary prospectus supplement or final
prospectus supplement) deemed or retroactively deemed to be a part thereof at such time
pursuant to Rule 430B (
Rule 430B
) or 430C (
Rule 430C
) under the Securities Act of 1933,
as amended (the
Act
), in each case that has not been superseded or modified. Company
Registration Statement without reference to a time means the Company Registration Statement
as of the time of the first contract of sale for the Offered Securities, which time shall be
considered the
Effective Date
of the Company Registration Statement relating to the
Offered Securities. For purposes of this definition, information contained in a form of
prospectus or prospectus supplement that is deemed retroactively to be a part of the Company
Registration Statement pursuant to Rule 430B shall be considered to be included in the
Company Registration Statement as of the time specified in Rule 430B.
Company Statutory Prospectus
as of any time means the prospectus relating to the
Offered Securities that is included in the Company Registration Statement immediately prior
to that time, including any document incorporated by reference therein and any basic
prospectus and prospectus supplement (including a preliminary prospectus supplement and
final prospectus supplement) deemed to be a part thereof pursuant to Rule 430B or 430C that
has not been superseded or modified. For purposes of this definition, information contained
in a form of prospectus or a prospectus supplement (including a preliminary prospectus
supplement and final prospectus supplement) that is deemed retroactively to be a part of the
Company Registration Statement pursuant to Rule 430B shall be considered to be included in
the Company Statutory Prospectus only as of the actual time that form of prospectus
(including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b)
(
Rule 424(b)
) under the Act.
Company Prospectus
means the Company Statutory Prospectus
that discloses the public offering price and other final terms of the Offered Securities and
otherwise satisfies Section 10(a) of the Act.
Issuer Free Writing Prospectus
means any issuer free writing prospectus, as defined
in Rule 433 (
Rule 433
) under the Act, relating to the Offered Securities in the form filed
or required to be filed with the Commission or, if not required to be filed, in the form
retained in the Companys and the Guarantors records pursuant to Rule 433(g) under the Act.
General Use Issuer Free Writing Prospectus
means any Issuer Free Writing Prospectus that
is intended for general distribution to prospective investors, as evidenced by its being
specified in a schedule to the Terms Agreement.
Limited Use Issuer Free Writing
Prospectus
means any Issuer Free Writing Prospectus that is not a General Use Issuer Free
Writing Prospectus, as evidenced by its being specified in a schedule to the Terms
Agreement.
Applicable Time
means the time and date so stated in the Terms Agreement
referred to in Section 2.
Anything to the contrary herein notwithstanding, no representation or warranty of the
Company with respect to the Company Registration Statement, the Company Statutory
Prospectus, the Company Prospectus or the Company General Disclosure Package, any
preliminary prospectus supplement, prospectus supplement, prospectus or free writing
prospectus contained therein, or any document deemed a part thereof or incorporated by
4
reference therein, shall be deemed to refer to, apply to, cover or include the Guarantors
Information (as defined in Section 7(a) below), and for purposes of any such
representation or warranty the Company shall be entitled to assume the accuracy of the
representations and warranties of the Guarantor set forth in Section 1(B).
(b) At the time the Company Registration Statement initially became effective, as of
its most recent effective date determined pursuant to Rule 430B and on the Effective Date
relating to the Offered Securities, the Company Registration Statement conformed and will
conform in all material respects to the requirements of the Act, the Trust Indenture Act of
1939, as amended (the
Trust Indenture Act
) and the rules and regulations of the Commission
(the
Rules and Regulations
). The Company Registration Statement, as of its most recent
effective date determined pursuant to Rule 430B and on the Effective Date relating to the
Offered Securities, did not and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading. The preceding two sentences do not apply to any
Statement of Eligibility and Qualification (Form T-1) of any Trustee under the Trust
Indenture Act, or statements in or omissions from any of such documents in reliance upon and
in conformity with (i) the Guarantors Information (as defined in Section 7(a) below) or
(ii) written information furnished to the Company or the Guarantor by or on behalf of any
Underwriter through the Representatives, if any, specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in the Terms Agreement.
(c) As of the Applicable Time, neither (i) the General Use Issuer Free Writing
Prospectus(es) issued at or prior to the Applicable Time, the Company Statutory Prospectus,
and any documents listed or disclosed in a schedule attached to the Terms Agreement, all
considered together (collectively, the
Company General Disclosure Package
), nor (ii) any
individual Limited Use Issuer Free Writing Prospectus, when considered together with the
Company General Disclosure Package, included any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Company General Disclosure
Package or any Limited Use Issuer Free Writing Prospectus in reliance upon and in conformity
with (A) the Guarantors Information or (B) written information furnished to the Company or
the Guarantor by or on behalf of any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the information described as such
in the Terms Agreement.
(d) On the date of the Company Prospectus and on the Closing Date (as defined in
Section 2), the Company Prospectus conformed and will conform in all material respects to
the requirements of the Act, the Trust Indenture Act and the Rules and Regulations, and did
not and will not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence does not
apply to the statements in or omissions from the Company Prospectus in reliance upon
5
and in
conformity with (i) the Guarantors Information or (ii) written information furnished
to the Company or the Guarantor by or on behalf of any Underwriter through the
Representatives, if any, specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any Underwriter consists of the
information described as such in the Terms Agreement.
(e) The documents filed by the Company with the Commission and incorporated or deemed
to be incorporated by reference in the Company Registration Statement, the Company
Prospectus and the Company General Disclosure Package (excluding any documents filed with
the Commission by the Guarantor, collectively, the
Company Incorporated Documents
), as of
the respective dates of their filing with the Commission, conformed in all material respects
with the requirements of the Securities Exchange Act of 1934, as amended (the
Exchange
Act
) and the Rules and Regulations.
(f) (i) (A) At the time of initial filing of the Company Registration Statement, (B)
at the time of the most recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated
report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and
(C) at the time the Company or any person acting on its behalf (within the meaning, for this
clause only, of Rule 163(c) under the Act) made any offer relating to the Offered Securities
in reliance on the exemption of Rule 163 under the Act, the Company was a well known
seasoned issuer as defined in Rule 405 (
Rule 405
) under the Act.
(ii) The Company Registration Statement is an automatic shelf registration
statement, as defined in Rule 405, that initially became effective no more than
three years prior to the date of the Terms Agreement.
(iii) The Company has not received from the Commission any notice pursuant to Rule
401(g)(2) (
Rule
401(g)(2)
) under the Act objecting to use of the automatic shelf
registration statement form. If at any time when Offered Securities remain unsold
by the Underwriters the Company receives from the Commission a notice pursuant to
Rule 401(g)(2), the Company will (i) promptly notify the Guarantor and the Lead
Underwriter (as defined in Section 2), (ii) promptly file a new registration
statement or post-effective amendment on the proper form relating to the Offered
Securities, in a form reasonably satisfactory to the Lead Underwriter, (iii) use its
reasonable best efforts to cause such registration statement or post-effective
amendment to be declared effective as soon as practicable, and (iv) promptly notify
the Guarantor and the Lead Underwriter of such effectiveness. The Company will take
all other action reasonably necessary or appropriate to permit the public offering
and sale of the Offered Securities to continue as contemplated in the registration
statement that was the subject of the Rule 401(g)(2) notice. References herein to
the Company Registration Statement shall include such new registration statement or
post-effective amendment, as the case may be.
(iv) The Company has paid or shall pay the required Commission filing fees relating
to the Offered Securities under the Company Registration Statement within
6
the time
required by Rule 456(b)(1) under the Act and otherwise in accordance with Rules
456(b) and 457(r) under the Act.
(g) (i) At the earliest time after the filing of the Company Registration Statement
that the Company or another offering participant made a bona fide offer (within the meaning
of Rule 164(h)(2) under the Act) of the Offered Securities and (ii) at the date of the Terms
Agreement, the Company was not and is not an ineligible issuer, as defined in Rule 405.
(h) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Offered Securities or until
any earlier date that the Company notified or notifies the Lead Underwriter as described in
the next sentence, did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information then contained in the Company Registration
Statement. If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information then contained in the Company
Registration Statement or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time, not
misleading, (i) the Company has promptly notified or will promptly notify the Guarantor and
the Lead Underwriter and (ii) the Company has promptly amended or will promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission. The foregoing two sentences do not apply to statements in or
omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with
(i) the Guarantors Information or (ii) written information furnished to the Company or the
Guarantor by or on behalf of any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the information described as such
in the Terms Agreement.
(i) The Company has been duly formed and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware; the Company has the
limited liability company power and authority to own, lease and operate its properties and
conduct its business as described in the Company Prospectus and the Company General
Disclosure Package and to enter into and perform its obligations under the Terms Agreement
(including the provisions of this Agreement), the Indenture and the Offered Securities; and
the Company is duly qualified as a foreign limited liability company to transact business
and is in good standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result in a material
adverse change (or development involving a prospective material adverse change) in the
business, properties, earnings or financial condition of the Company and its subsidiaries,
taken as a whole (a
Company Material Adverse Effect
).
7
(j) As of December 31, 2007, the Company had no significant subsidiary (as such term
is defined in Rule 1-02 of Regulation S-X) other than The Pepsi Bottling Group Mexico SRL.
(k) The Terms Agreement (including the provisions of this Agreement) has been duly
authorized, executed and delivered by the Company.
(l) The Indenture has been duly qualified under the Trust Indenture Act and has been duly
authorized by the Company and, when duly executed and delivered by the Company (assuming due
authorization, valid execution and delivery thereof by the Guarantor and the Trustee), will
constitute a valid and legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by the laws of
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
relating to creditors rights generally, by general principles of equity or by the discretion of
any court before which any proceeding therefor may be brought.
(m) The Registered Securities have been duly authorized by the Company and, when issued,
executed and authenticated in accordance with the Indenture and delivered to and duly paid for
by the Underwriters in accordance with this Agreement, will constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance with their terms, and
will be entitled to the benefits of the Indenture, except as such enforceability may be limited
by the laws of bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws relating to creditors rights generally, by general principles of equity or by the
discretion of any court before which any proceeding therefor may be brought.
(n) The Offered Securities and the Indenture conform in all material respects to the
description thereof contained in the Company Prospectus and the Company General Disclosure
Package.
(o) No consent, approval, authorization or order of, or filing with, any governmental
agency or body or any court is required for the consummation of the transactions contemplated by
the Terms Agreement (including the provisions of this Agreement), the Indenture or the Offered
Securities in connection with the issuance and sale of the Offered Securities by the Company
except such as may be required by the Act and the Trust Indenture Act and the securities or Blue
Sky laws of the various states in connection with the offer and sale of the Offered Securities
by the Underwriters.
(p) The Company is not (i) in violation of its certificate of formation or limited
liability company agreement or (ii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which
the Company is a party or by which the Company may be bound, or to which any of the property or
assets of the Company is subject (collectively, the
Agreements and Instruments
), except, in
the case of clause (ii), for such defaults that would not result in a
8
Company Material Adverse
Effect; and the execution, delivery and performance of the Terms Agreement (including the
provisions of this Agreement), the Indenture and the Offered Securities, the consummation of the
transactions contemplated herein and therein and compliance by the Company with its obligations
hereunder and thereunder, do not and
will not, whether with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not result in a
Company
Material Adverse Effect), nor will such action result in any violation of (A) the provisions of
the certificate of formation or limited liability company agreement of the Company or (B) any
applicable law, statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries or any of their assets, properties or operations (except, in the case
of clause (B), for such violations that would not result in a Company Material Adverse Effect).
As used in this paragraph, a
Repayment Event
means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any person acting on such
holders behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.
(q) The Company possesses such permits, licenses, approvals, consents and other
authorizations (collectively,
Governmental Licenses
) issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the business now
operated by it, except where the failure to so possess such Governmental Licenses would not,
singly or in the aggregate, have a Company Material Adverse Effect; the Company is in
compliance with the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Company Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Company Material Adverse Effect; and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses, singly or in the aggregate, the resolution
of which could reasonably be expected to result in a Company Material Adverse Effect.
(r) No labor dispute with the employees of the Company exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of the Companys principal suppliers, manufacturers,
customers or contractors, which, in any case, may reasonably be expected to result in a
Company Material Adverse Effect.
(s) The Company owns, possesses or holds under valid license, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks, trade
9
names or
other intellectual property (collectively,
Intellectual Property
) necessary to carry on
the business now operated by it, and the Company has not received any notice or is not
otherwise aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the interest of the
Company therein, and the resolution of such infringement or conflict could reasonably be
expected to result in, or the invalidity or inadequacy, singly or in the aggregate, would
result in, a Company Material Adverse Effect.
(t) Except as described or incorporated by reference in the Company Registration Statement,
the Company Prospectus and the Company General Disclosure Package, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any of its subsidiaries, and there is no statute or regulation, and
no agreement, instrument or other document to which, in any case, the Company is a party, or by
which, in any case, any of the properties of the Company is bound, that is required to be
disclosed in the Company Registration Statement, the Company Prospectus and the Company General
Disclosure Package, or which is reasonably expected to result in a Company Material Adverse
Effect, or which is reasonably expected to materially and adversely affect the consummation of
the transactions contemplated in the Terms Agreement (including the provisions of this
Agreement), the Indenture or the Offered Securities or the performance by the Company of its
obligations hereunder or thereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described or incorporated by
reference in the Company Registration Statement, the Company Prospectus and the Company General
Disclosure Package, including ordinary routine litigation incidental to the business, is not
reasonably expected to result in a Company Material Adverse Effect.
(u) The consolidated financial statements of the Company and its subsidiaries included
or incorporated by reference in the Company Registration Statement, the Company Prospectus
and the Company General Disclosure Package, together with the related schedules and notes
thereto, present fairly the financial position, results of operations and cash flows of the
Company and its subsidiaries at the dates and for the periods indicated. The consolidated
balance sheets and consolidated statements of operations, changes in owners equity and cash
flows of the Company and its subsidiaries at the dates and for the periods specified have
been prepared in conformity with generally accepted accounting principles in the United
States of America (
GAAP
) applied on a consistent basis throughout the periods involved.
The supporting schedules for such financial statements, if any, included in the Company
Registration Statement, the Company Prospectus and Company General Disclosure Package
present fairly in accordance with GAAP the information required to be stated therein.
Except as disclosed in the Company Registration Statement, the Company Prospectus and the
Company General Disclosure Package, the selected historical financial data and the summary
historical financial data of the Company and its subsidiaries included in the Company
Registration Statement, the Company Prospectus and the Company General Disclosure
10
Package present fairly the information shown therein and have been compiled on a basis consistent
with that of the audited consolidated financial statements of the Company and its
subsidiaries included in the Company Registration Statement, the Company Prospectus and the
Company General Disclosure Package.
(v) Deloitte & Touche LLP, who have expressed their opinion with respect to the Companys
audited consolidated financial statements and schedule as of December 29, 2007 and as of
December 30, 2006, and for each of the fiscal years in the three-year period ended December 29,
2007, was, at the time such opinion was issued, an independent registered public accounting firm
within the meaning of Regulation S-X under the Act and the Exchange Act.
(w) There has not been any Company Material Adverse Effect since the date of the latest
annual or quarterly financial statements included in the Company General Disclosure Package,
otherwise than as set forth or contemplated in the Company General Disclosure Package.
(x) The Company is not and, after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the Company General
Disclosure Package, will not be an investment company as defined in the Investment Company Act
of 1940.
(y) The Company and its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
managements general or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with managements general
or specific authorization; and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(z) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer or employee of the Company or its subsidiaries or any agent or
representative of the Company or its subsidiaries has taken or will take any action in
furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or
giving of money, property, gifts or anything else of value, directly or indirectly, to any
foreign official (as defined in the Foreign Corrupt Practices Act of 1977, as amended (the
FCPA
), or any foreign political party or party official thereof or candidate for foreign
political office), or immediate family member of any of the foregoing, to obtain or retain
business or secure an improper advantage; and the Company, its subsidiaries and, to the
knowledge of the Company, its affiliates have conducted and will conduct their businesses in
compliance with the FCPA and have instituted and maintain policies and procedures designed to
promote and achieve compliance with the FCPA and with the representation and warranty contained
herein.
11
(aa) The operations of the Company and its subsidiaries are and have been conducted at all
times in material compliance with all applicable financial recordkeeping and reporting
requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of
jurisdictions where the Company and its subsidiaries conduct
business, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the
Anti-Money Laundering Laws
), and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
(bb) (i) The Company represents that neither the Company nor any of its subsidiaries
(collectively, the
Company Entity
) or, to the knowledge of the Company, any director, officer,
employee, agent, affiliate or representative of the Company Entity, is an individual or entity
(
Person
) that is, or is owned or controlled by a Person that is currently the subject of any
sanctions administered or enforced by the U.S. Department of Treasurys Office of Foreign Assets
Control (
OFAC
) (collectively,
Sanctions
); and (ii) the Company represents and covenants that
the Company will not, directly or indirectly, use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or
other Person (x) to fund or facilitate any activities or business of or with any Person or in
any country or territory that, at the time of such funding or facilitation, is the subject of
Sanctions, or (y) in any other manner that will result in a violation of Sanctions by any Person
(including any Person participating in the offering, whether as underwriter, advisor, investor
or otherwise).
B.
Representations and Warranties of the Guarantor.
The Guarantor, as of the date of each Terms Agreement referred to in Section 2, represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-154314), including a prospectus, relating to the
Guarantee has been filed by the Guarantor with the Commission and has become effective.
Guarantor Registration Statement
as of any time means such registration statement in the
form then filed with the Commission, including any amendment thereto as of or prior to such
time, any document then incorporated by reference therein and any information in a
prospectus or prospectus supplement (including a preliminary prospectus supplement or final
prospectus supplement) deemed or retroactively deemed to be a part thereof at such time
pursuant to Rule 430B or 430C. Guarantor Registration Statement without reference to a
time means the Guarantor Registration Statement as of the time of the first contract of sale
for the Guarantee, which time shall be considered the
Effective Date
of the Guarantor
Registration Statement relating to the Guarantee. For purposes of this definition,
information contained in a form of prospectus or prospectus supplement that is deemed
retroactively to be a part of the Guarantor Registration Statement pursuant to
12
Rule 430B
shall be considered to be included in the Guarantor Registration Statement as of the time
specified in Rule 430B.
Guarantor Statutory Prospectus
as of any time means the prospectus relating to the
Guarantee that is included in the Guarantor Registration Statement immediately prior to that
time, including any document incorporated by reference therein and any basic prospectus and
prospectus supplement (including a preliminary prospectus supplement and
final prospectus supplement) deemed to be a part thereof pursuant to Rule 430B or 430C
that has not been superseded or modified. For purposes of this definition, information
contained in a form of prospectus or a prospectus supplement (including a preliminary
prospectus supplement and final prospectus supplement) that is deemed retroactively to be a
part of the Guarantor Registration Statement pursuant to Rule 430B shall be considered to be
included in the Guarantor Statutory Prospectus only as of the actual time that form of
prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule
424(b).
Guarantor Prospectus
means the Guarantor Statutory Prospectus that discloses the
public offering price and other final terms of the Offered Securities and otherwise
satisfies Section 10(a) of the Act.
Anything to the contrary herein notwithstanding, no representation or warranty of the
Guarantor with respect to the Guarantor Registration Statement, the Guarantor Statutory
Prospectus, the Guarantor Prospectus or the Guarantor General Disclosure Package, any
preliminary prospectus supplement, prospectus supplement, prospectus or free writing
prospectus contained therein, or any document deemed a part thereof or incorporated by
reference therein, shall be deemed to refer to, apply to, cover or include the Companys
Information (as defined in Section 7(b) below), and for purposes of any such representation
or warranty the Guarantor shall be entitled to assume the accuracy of the representations
and warranties of the Company set forth in Section 1(A).
(b) At the time the Guarantor Registration Statement initially became effective, as of
its most recent effective date determined pursuant to Rule 430B and on the Effective Date
relating to the Guarantee, the Guarantor Registration Statement conformed and will conform
in all material respects to the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations. The Guarantor Registration Statement, as of its most recent
effective date determined pursuant to Rule 430B and on the Effective Date relating to the
Guarantee did not and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements
therein not misleading. The preceding two sentences do not apply to any Statement of
Eligibility and Qualification (Form T-1) of any Trustee under the Trust Indenture Act, or
statements in or omissions from any of such documents in reliance upon and in conformity
with (i) the Companys Information or (ii) written information furnished to the Guarantor or
the Company by or on behalf of any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the information described as such
in the Terms Agreement.
13
(c) As of the Applicable Time, neither (i) the General Use Issuer Free Writing
Prospectus(es) at or prior to the Applicable Time, the Guarantor Statutory Prospectus, and
any documents listed or disclosed in a schedule attached to the Terms Agreement, all
considered together (collectively, the
Guarantor General Disclosure Package
), nor (ii) any
individual Limited Use Issuer Free Writing Prospectus, when considered together with the
Guarantor General Disclosure Package, included any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Guarantor General
Disclosure Package or any Limited Use Issuer Free Writing Prospectus issued by the Guarantor
in reliance upon and in conformity with (A) the Companys Information or (B) written
information furnished to the Guarantor or the Company by or on behalf of any Underwriter
through the Representatives, if any, specifically for use therein, it being understood and
agreed that the only such information furnished by or on behalf of any Underwriter consists
of the information described as such in the Terms Agreement.
(d) On the date of the Guarantor Prospectus and on the Closing Date, the Guarantor
Prospectus conformed and will conform in all material respects to the requirements of the
Act and the Rules and Regulations, and did not and will not include any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to the statements in or omissions from the Guarantor
Prospectus in reliance upon and in conformity with (i) the Companys Information or (ii)
written information furnished to the Company or the Guarantor by or on behalf of any
Underwriter through the Representatives, if any, specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in the Terms Agreement.
(e) The documents filed by the Guarantor with the Commission and incorporated or deemed
to be incorporated by reference in the Guarantor Registration Statement, the Guarantor
Prospectus and the Guarantor General Disclosure Package (excluding any documents filed with
the Commission by the Company, collectively, the
Guarantor Incorporated Documents
), as of
the respective dates of their filing with the Commission, conformed in all material respects
with the requirements of the Exchange Act and the Rules and Regulations.
(f) (i) (A) At the time of initial filing of the Guarantor Registration Statement, (B)
at the time of the most recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated
report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and
(C) at the time the Guarantor or any person acting on its behalf (within the meaning, for
this clause only, of Rule 163(c) under the Act) made any offer relating to the Guarantee in
reliance on the exemption of Rule 163 under the Act, the Guarantor was a well known
seasoned issuer as defined in Rule 405.
14
(ii) The Guarantor Registration Statement is an automatic shelf registration
statement, as defined in Rule 405, that initially became effective no more than
three years prior to the date of the Terms Agreement.
(iii) The Guarantor has not received from the Commission any notice pursuant to
Rule 401(g)(2) objecting to use of the automatic shelf registration statement form.
If at any time when Offered Securities remain unsold by the Underwriters the
Guarantor receives from the Commission a notice pursuant to Rule 401(g)(2), the
Guarantor will (i) promptly notify the Company and the Lead Underwriter, (ii)
promptly file a new registration statement or post-effective amendment on the
proper form relating to the Guarantee, in a form reasonably satisfactory to the Lead
Underwriter, (iii) use its reasonable best efforts to cause such registration
statement or post-effective amendment to be declared effective as soon as
practicable, and (iv) promptly notify the Company and the Lead Underwriter of such
effectiveness. The Guarantor will take all other action reasonably necessary or
appropriate to permit the public offering and sale of the Offered Securities to
continue as contemplated in the registration statement that was the subject of the
Rule 401(g)(2) notice. References herein to the Guarantor Registration Statement
shall include such new registration statement or post-effective amendment, as the
case may be.
(iv) Pursuant to Rule 457(n) under the Act, there is no separate fee for the
registration of the Guarantee under the Act.
(g) (i) At the earliest time after the filing of the Guarantor Registration Statement
that the Guarantor or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Act) of the Offered Securities and (ii) at the date of
the Terms Agreement, the Guarantor was not and is not an ineligible issuer, as defined in
Rule 405.
(h) Guarantors Information furnished by the Guarantor specifically for use in an
Issuer Free Writing Prospectus, as of the issue date of any such Issuer Free Writing
Prospectus and at all subsequent times through the completion of the public offer and sale
of the Offered Securities or until any earlier date that the Company notified or notifies
the Lead Underwriter pursuant to Section 1.A.(h), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information then contained
in the Guarantor Registration Statement.
(i) The Guarantor has been duly incorporated and is validly existing under the laws of
the State of North Carolina, has the corporate power and authority to own its property and
to conduct its business as described in the Guarantor Prospectus and the Guarantor General
Disclosure Package, and is duly qualified to transact business as a foreign corporation and
is in good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the extent that the
failure to be so qualified or in good standing would not result in a material adverse change
(or development involving a prospective material adverse change) in the business,
properties, earnings or financial condition of the Guarantor and its subsidiaries on a
consolidated basis (a
Guarantor Material Adverse Effect
).
15
(j) The Terms Agreement (including the provisions of this Agreement), as of the date of
the Terms Agreement, will have been duly authorized, executed and delivered by the
Guarantor.
(k) The Indenture has been duly qualified under the Trust Indenture Act and has been duly
authorized by the Guarantor and, when duly executed and delivered by the Guarantor (assuming due
authorization, valid execution and delivery thereof by the Company and the Trustee), will
constitute a valid and binding agreement of the Guarantor, enforceable against
the Guarantor in accordance with its terms, except as such enforceability may be limited by
the laws of bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar
laws relating to creditors rights generally, by any other federal or state laws, by rights of
acceleration, or by general principles of equity.
(l) The Guarantee has been duly authorized by the Guarantor and, when issued, executed and
delivered by the Guarantor and, when the Registered Securities, with the Guarantee endorsed
thereon, are issued, executed and authenticated in accordance with the Indenture and delivered
to and paid for the Underwriters in accordance with the Terms Agreement, the Guarantee will
constitute a valid and binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, and will be entitled to the benefits of the Indenture, except as such
enforceability may be limited by the laws of bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws relating to creditors rights generally, or by general
principles of equity.
(m) No consent, approval, authorization, or order of or qualification with any governmental
body or agency is, to the Guarantors knowledge, required for the performance by the Guarantor
of its obligations under the Terms Agreement (including the provisions of this Agreement), the
Indenture or the Guarantee, except such as may be required by the Act, the Trust Indenture Act
and the Blue Sky laws or other securities laws of the various states in which the issuance and
sale of the Offered Securities are offered and sold and except to the extent where the failure
to obtain such consent, approval, authorization, order or qualification would not reasonably be
expected to have a Guarantor Material Adverse Effect.
(n) The execution and delivery of and performance by the Guarantor of its obligations under
the Terms Agreement (including the provisions of this Agreement), the Indenture and the issuance
and sale of the Offered Securities, as the case may be, will not contravene any provision of any
applicable law or of the Restated Charter or By-Laws of the Guarantor, or of any agreement or
other instrument binding upon the Guarantor or any of its subsidiaries that is material to the
Guarantor and its subsidiaries taken as a whole, or of any judgment, order, or decree of any
governmental body, agency, or court having jurisdiction over the Guarantor or any of its
subsidiaries, in each of the foregoing cases except as would not reasonably be expected to have
a Guarantor Material Adverse Effect.
(o) There has not been any material adverse change (or development involving a prospective
material adverse change) in the business, properties, earnings, or financial condition of the
Guarantor and its subsidiaries on a consolidated basis from that set forth in the Guarantors
last periodic report filed with the Commission under the Exchange Act and
16
the rules and
regulations promulgated thereunder, otherwise than as set forth in the Guarantor General
Disclosure Package. Since the respective dates as of which information is given in the
Guarantor Registration Statement, the Guarantor General Disclosure Package and the Guarantor
Prospectus, except as otherwise stated therein, there has been no dividend or distribution of
any kind declared, paid or made by the Guarantor on any class of its capital stock.
(p) There are no legal or governmental proceedings pending or, to the Guarantors
knowledge, threatened, to which the Guarantor or any of its subsidiaries is a party or to which
any of the properties of the Guarantor or any of its subsidiaries is subject that is required to
be described in the Guarantor Registration Statement, the Guarantor General Disclosure Package
and the Guarantor Prospectus and is not so described.
(q) KPMG LLP, who audited the financial statements and supporting schedules for such
financial statements incorporated by reference in the Guarantor Registration Statement, are
independent registered public accountants as required by the Act.
(r) The financial statements of the Guarantor and its subsidiaries included or
incorporated by reference in the Guarantor Registration Statement, the Guarantor
General Disclosure Package and the Guarantor Prospectus, together with the related
schedules and notes, present fairly the financial position of the Guarantor and its
consolidated subsidiaries at the dates indicated and the statement of operations,
shareholders equity and cash flows of the Guarantor and its consolidated
subsidiaries for the periods specified; said financial statements have been prepared
in conformity with GAAP applied on a consistent basis throughout the periods
involved. The supporting schedules for such financial statements, if any, present
fairly in accordance with GAAP the information required to be stated therein.
2.
Purchase and Offering of Offered Securities
.
The obligation of the Underwriters to purchase the Offered Securities will be evidenced by
an agreement or exchange of other written communications (the
Terms Agreement
) at the time the
Company determines to sell the Offered Securities. The Terms Agreement will incorporate by
reference the provisions of this Agreement, except as otherwise provided therein, and will
specify the firm or firms which will be Underwriters, the names of any Representatives, the
principal amount to be purchased by each Underwriter, the purchase price to be paid by the
Underwriters and the terms of the Offered Securities not already specified in the Indenture,
including, but not limited to, interest rate, maturity, any redemption provisions and any
sinking fund requirements. The Terms Agreement will also specify the time and date of delivery
and payment (such time and date, or such other time and date not later than seven full business
days thereafter as the Underwriter first named in the Terms Agreement (the
Lead Underwriter
)
and the Company agree as the time for payment and delivery, being herein and in the Terms
Agreement referred to as the
Closing Date
), the place of delivery and payment and any details
of the terms of offering that should be reflected in the prospectus supplement relating to the
offering of the Offered Securities.
17
For purposes of Rule 15c6-1 under the Exchange Act, the
Closing Date (if later than the otherwise applicable settlement date) shall be the date for
payment of funds and delivery of securities for all the Offered Securities sold pursuant to the
offering. The obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer the Offered
Securities for sale as set forth in the Company Prospectus and Guarantor Prospectus.
The Offered Securities delivered to the Underwriters on the Closing Date will be in a form
reasonably acceptable to the Lead Underwriter.
3.
Certain Agreements of the Company and the Guarantor
. Each of the Company (solely with
respect to the Company Registration Statement, the Company Statutory Prospectus and the Company
Prospectus) and the Guarantor (solely with respect to the Guarantor Registration Statement, the
Guarantor Statutory Prospectus and the Guarantor Prospectus) severally agrees with the several
Underwriters, as applicable, that it will furnish to counsel for the Underwriters, one signed copy
(which may be a conformed copy delivered electronically) of the Company Registration Statement and
the Guarantor Registration Statement, as applicable, including all exhibits, in the form they first
became effective and of all amendments thereto and that, in connection with each offering of
Offered Securities:
(a) The Company and the Guarantor have filed or will file each of the Company Statutory
Prospectus and Guarantor Statutory Prospectus (including the Company Prospectus and the
Guarantor Prospectus), respectively, pursuant to and in accordance with Rule 424(b)(2) (or,
if applicable and consented to by the Lead Underwriter, subparagraph (5)) not later than the
second business day following the earlier of the date it is first used or the date of the
Terms Agreement. The Company and the Guarantor have complied and will comply with Rule 433.
(b) For so long as Offered Securities remain unsold by the Underwriters, each of the
Company, with respect to the Company Registration Statement and the Company Statutory
Prospectus, and the Guarantor, with respect to the Guarantor Registration Statement and the
Guarantor Statutory Prospectus, will advise the Lead Underwriter promptly of any proposal to
amend or supplement the Company Registration Statement, the Guarantor Registration
Statement, any Company Statutory Prospectus or any Guarantor Statutory Prospectus, as the
case may be, and will afford the Lead Underwriter a reasonable opportunity for review and
comment, which shall in any case not be longer than three business days, and the Company or
the Guarantor, as the case may be, shall not file any such proposed amendment or supplement
to which the Representatives reasonably object (unless in the judgment of counsel, the
Company or the Guarantor is required to file the same (without the need for reliance on Rule
12b-25 under the Exchange Act)), and the Company or the Guarantor, as the case may be, will
also advise the Lead Underwriter promptly of the filing of any such amendment or supplement
and of the institution by the Commission of any stop order proceedings in respect of the
Company Registration Statement or the Guarantor Registration Statement, as the case may be,
or of any part thereof and each of the Company and the Guarantor will use its reasonable
best efforts to
18
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities is (or but for
the exemption in Rule 172 under the Act would be) required to be delivered under the Act in
connection with sales by any Underwriter or dealer, any event occurs as a result of which
the Company Prospectus or the Guarantor Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary at any time
to amend the Company Prospectus or the Guarantor Prospectus to comply with the Act, the
Company or the Guarantor (whichever provided the statements in or omissions from the
Company Prospectus or the Guarantor Prospectus to which such event so relates), promptly
will notify the Lead Underwriter of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance,
provided
,
however
, that neither the Company nor the Guarantor shall bear the expense of the
preparation and filing of such amendment or supplement after nine months of the date of the
applicable Terms Agreement. Neither the Lead Underwriters consent to, nor the
Underwriters delivery of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 5 hereof.
(d) Each of the Company and the Guarantor will furnish to the Representatives, upon
request, copies of the Company Registration Statement or the Guarantor Registration
Statement, respectively, including all exhibits, any related preliminary prospectus, any
related preliminary prospectus supplement, the Company Prospectus or the Guarantor
Prospectus, respectively, and all amendments and supplements to such documents, in each case
as soon as available and in such quantities as the Representatives may reasonably request.
The Company and the Guarantor, as the case may be, will pay the expenses of printing and
distributing to the Representatives all such documents.
(e) Each of the Company and the Guarantor shall cooperate with the Representatives and
counsel for the Underwriters to qualify or register the Offered Securities for sale under
(or obtain exemptions from the application of) the state securities or Blue Sky laws of
those jurisdictions designated by the Representatives, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as reasonably
required for the distribution of the Offered Securities. Neither the Company nor the
Guarantor shall be required to qualify to do business in any such jurisdiction where it is
not presently so qualified or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently so subject. The Company and the
Guarantor, as the case may be, will advise the Representatives promptly of the suspension of
the qualification or registration of (or any such exemption relating to) the Offered
Securities for offering, sale or trading in any jurisdiction or any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or
19
exemption, the Company and the Guarantor, as
the case may be, shall use their best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) As soon as practicable, but not later than 16 months after the date of each Terms
Agreement, each of the Company and the Guarantor will make generally available to its
security holders and to the Representatives an earnings statement covering a period of at
least 12 months beginning as of the date of such Terms Agreement (which need not be audited)
that satisfies the provisions of Section 11(a) of the Act.
(g) Neither the Company nor the Guarantor will offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to United States dollar-denominated debt securities issued
or guaranteed by the Company or the Guarantor and having a maturity of more than one year
from the date of issue, or publicly disclose the intention to make any such offer, sale,
pledge, disposition or filing, without the prior written consent of the Lead Underwriter for
a period beginning at the time of execution of the Terms Agreement and ending on the Closing
Date.
(h) Each of the Company and the Guarantor will take such steps as shall be necessary to
ensure that it will not be or become an investment company as defined in the Investment
Company Act of 1940.
(i) In connection with the offering, until the Representatives shall have notified the
Company and the other Underwriters of the completion of the distribution of the Offered
Securities, neither the Company nor any of its affiliates has or will, either alone or with
one or more other persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest in any Offered Securities or attempt to induce any
person to purchase any Offered Securities; and neither the Company nor any of its affiliates
will make bids or purchases for the purpose of creating actual, or apparent, active trading
in, or of raising the price of, the Offered Securities.
(j) In connection with the offering, until the Representatives shall have notified the
Guarantor and the other Underwriters of the completion of the distribution of the Offered
Securities, neither the Guarantor nor any of its affiliates has or will, either alone or
with one or more other persons, bid for or purchase for any account in which it or any of
its affiliates has a beneficial interest in any Offered Securities or attempt to induce any
person to purchase any Offered Securities; and neither the Guarantor nor any of its
affiliates will make bids or purchases for the purpose of creating actual, or apparent,
active trading in, or of raising the price of, the Offered Securities.
The Representatives, on behalf of the several Underwriters, may, in their sole discretion,
waive in writing the performance by the Company or the Guarantor of any one or more of the
foregoing covenants or extend the time for their performance.
4.
Free Writing Prospectuses
. (a) Each of the Company and the Guarantor severally represents
and agrees that, unless it obtains the prior consent of the other and of the Lead
20
Underwriter, and
each Underwriter represents and agrees that, unless it obtains the prior consent of the Company,
the Guarantor and the Lead Underwriter, it has not made and will not make any offer relating to the
Offered Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a free writing prospectus, as defined in Rule 405, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company, the Guarantor and the
Lead Underwriter is hereinafter referred to as a
Permitted Free Writing Prospectus
. The Company
and the Guarantor severally represent that they have treated and agree that they will treat each
Permitted Free Writing Prospectus as an issuer free writing prospectus, as defined in Rule 433,
and have complied and will comply with the
requirements of Rule 164 under the Act and Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and record keeping.
(b) If so indicated in the Terms Agreement, the Company and the Guarantor will together
prepare a final term sheet relating to the Offered Securities, containing only information
that describes the final terms of the Offered Securities and otherwise in a form consented
to by the Lead Underwriter, and will each file such final term sheet within the period
required by Rule 433(d)(5)(ii) under the Act following the date such final terms have been
established for all classes of the offering of the Offered Securities. Any such final term
sheet is an Issuer Free Writing Prospectus and a Permitted Free Writing Prospectus for
purposes of this Agreement. The Company and the Guarantor also consent to the use by any
Underwriter of a free writing prospectus that contains only (i)(x) information describing
the preliminary terms of the Offered Securities or their offering or (y) information that
describes the final terms of the Offered Securities or their offering and that is included
in the final term sheet of the Company and the Guarantor contemplated in the first sentence
of this subsection or (ii) other information that is not issuer information, as defined in
Rule 433, it being understood that any such free writing prospectus referred to in clause
(i) or (ii) above shall not be an Issuer Free Writing Prospectus for purposes of this
Agreement.
5.
Payment of Expenses
. (a) In addition to the payment of the expenses contemplated by
Section 3(c) and Section 3(d), the Company will pay all expenses incidental to the performance of
its obligations under the Terms Agreement (including the provisions of this Agreement), the
Indenture and the Offered Securities, including (i) the fees and expenses of the Trustee and its
professional advisers; (ii) the fees and expenses of the Companys accountants and professional
advisors; (iii) all expenses in connection with the execution, issue, authentication, packaging and
initial delivery of the Offered Securities; (iv) all expenses in connection with the preparation,
printing and delivery of the Company Registration Statement, the Terms Agreement (including the
provisions of this Agreement), the Indenture, the Company Prospectus and the Company General
Disclosure Package and any other document relating to the issuance, offer, sale and delivery of the
Offered Securities (it being understood that, except as otherwise provided in Section 9, the
Company shall not pay any such fees or expenses incurred by counsel to the Underwriters in
connection with any such offering of Offered Securities); (v) any expenses (including fees and
disbursements of counsel) incurred in connection with qualification of the Offered Securities for
sale under the laws of such states of the United States as the Representatives designate and the
printing of memoranda relating thereto; (vi) the filing fees incident to, and the fees and expenses
of counsel for the Underwriters in connection with, if any, the review and approval by the
Financial
21
Industry Regulatory Authority (the
FINRA
) of the Underwriters participation in the
offering and distribution of the Offered Securities; and (vii) any fees charged by investment
rating agencies for the rating of the Offered Securities.
(b) In addition to the payment of the expenses contemplated by Section 3(c) and Section
3(d), the Guarantor will pay all of its expenses incidental to the performance of its
obligations under the Terms Agreement (including the provisions of this Agreement), the
Indenture and the Guarantee, including the fees and expenses of the Guarantors accountants
and professional advisors and all expenses in connection with the preparation,
printing and delivery of the Guarantor Registration Statement, the Guarantor Prospectus
and the Guarantor General Disclosure Package
6.
Conditions of the Obligations of the Underwriters
. The obligations of the several
Underwriters to purchase and pay for the Offered Securities will be subject to the accuracy of the
respective representations and warranties on the part of the Company and the Guarantor herein, to
the accuracy of the respective statements of Company officers and Guarantor officers made pursuant
to the provisions hereof, to the performance in all material respects by the Company and the
Guarantor of their respective obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the date of the Terms Agreement, the Representatives shall have
received a letter in customary form, dated the date of delivery thereof, of Deloitte &
Touche LLP, confirming that they are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion the consolidated financial statements and financial statement
schedules of the Company and its subsidiaries audited by them and included in the
Company Prospectus and the Company General Disclosure Package comply as to form in
all material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the Public Company Accounting
Oversight Board (PCAOB) for a review of interim financial information as described
in PCAOB AU 722, Interim Financial Information, on any unaudited financial
statements of the Company included in the Company Prospectus and the Company General
Disclosure Package;
(iii) on the basis of the review referred to in clause (ii) above, a reading of the
latest available interim consolidated financial statements of the Company and its
subsidiaries, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited condensed consolidated financial statements of the Company
and its subsidiaries included in the Company Registration Statement, the
Company Prospectus or the Company General Disclosure Package do not comply
as to form in all material respects with the
22
applicable accounting requirements of the Exchange Act as they apply to
Quarterly Reports on Form 10-Q and the related published Rules and
Regulations or any material modifications should be made to such unaudited
financial statements and summary of earnings for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available consolidated balance sheet of the
Company and its subsidiaries read by such accountants, or at a subsequent
specified date not more than three business days prior to the date of such
letter, there was any change in the owners net investment or any increase
in long-term debt, any decrease in net current assets or any decrease in
total owners equity, as compared with amounts shown on the latest
consolidated balance sheet of the Company and its subsidiaries included in
the Company Registration Statement, the Company Prospectus and the Company
General Disclosure Package; or
(C) for the period from the closing date of the latest consolidated
statement of operations of the Company and its subsidiaries included in the
Company Registration Statement, the Company Prospectus and the Company
General Disclosure Package to the closing date of the latest available
consolidated statement of operations of the Company and its subsidiaries
read by such accountants there were any decreases, as compared with the
corresponding period of the previous year, in consolidated net revenues,
operating income, income before income taxes or net income;
except in all cases set forth in clauses (B) and (C) above for changes, increases or
decreases which the Company Registration Statement, the Company Prospectus and the
Company General Disclosure Package discloses have occurred or may occur or which are
described in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived from such
dollar amounts) and other financial information of the Company and its subsidiaries
contained in the Company Registration Statement, the Company Prospectus, each Issuer
Free Writing Prospectus (other than any Issuer Free Writing Prospectus that is an
electronic road show, as defined in Rule 433(h)) and the Company General
Disclosure Package (in each case to the extent that such dollar amounts, percentages
and other financial information are derived from the general accounting records of
the Company and its subsidiaries subject to the internal controls of the Companys
accounting system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such general
accounting records of the Company and its subsidiaries and other procedures
specified in such letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as otherwise
specified in such letter.
All of the Companys financial statements and schedules included in material incorporated by
reference into the Company Registration Statement, the Company
23
Prospectus or the Company General Disclosure Package shall be deemed included in the Company
Prospectus or the Company General Disclosure Package for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the Representatives shall have
received a letter in customary form, dated the date of delivery thereof, of KPMG LLP,
confirming that they are independent public accountants with respect to the Guarantor within
the meaning of the Act and the applicable published Rules and Regulations thereunder and
stating to the effect that:
(i) in their opinion the consolidated financial statements and financial statement
schedules of the Guarantor and its subsidiaries examined by them and included in the
Guarantor Prospectus and the Guarantor General Disclosure Package comply as to form
in all material respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed the procedures specified by the Public Company Accounting
Oversight Board (PCAOB) for a review of interim financial information as described
in PCAOB AU 722, Interim Financial Information, on any unaudited financial
statements of the Guarantor included in the Guarantor Prospectus and the Guarantor
General Disclosure Package;
(iii) on the basis of the review referred to in clause (ii) above, a reading of the
latest available interim consolidated financial statements of the Guarantor and its
subsidiaries, inquiries of officials of the Guarantor who have responsibility for
financial and accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited condensed consolidated financial statements of the
Guarantor and its subsidiaries included in the Guarantor Registration
Statement, the Guarantor Prospectus or the Guarantor General Disclosure
Package do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as they apply to
Quarterly Reports on Form 10-Q and the related published Rules and
Regulations or any material modifications should be made to such unaudited
financial statements and summary of earnings for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available consolidated balance sheet of the
Guarantor and its subsidiaries read by such accountants, or at a subsequent
specified date not more than three business days prior to the date of such
letter, there was any change in the outstanding common or preferred stock,
or any decrease in consolidated total assets or in consolidated common
shareholders equity or any increase in long-term debt, as compared with
amounts shown on the latest consolidated balance sheet of the Guarantor and
its subsidiaries included in the Guarantor Registration Statement, the
Guarantor Prospectus and the Guarantor General Disclosure Package; or
24
(C) for the period from the closing date of the latest consolidated
statement of operations of the Guarantor and its subsidiaries included in
the Guarantor Registration Statement, the Guarantor Prospectus and the
Guarantor General Disclosure Package to the closing date of the latest
available consolidated statement of operations of the Guarantor and its
subsidiaries read by such accountants there were any decreases, as compared
with the corresponding period of the previous year, in consolidated net
sales or in consolidated total or per common share amounts of net income;
except in all cases set forth in clauses (B) and (C) above for changes, increases or
decreases which the Guarantor Registration Statement, the Guarantor Prospectus and
the Guarantor General Disclosure Package discloses have occurred or may occur or
which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived from such
dollar amounts) and other financial information of the Guarantor and its
subsidiaries contained in the Guarantor Registration Statement, the Guarantor
Prospectus, each Issuer Free Writing Prospectus (other than any Issuer Free Writing
Prospectus that is an electronic road show, as defined in Rule 433(h)) and the
Guarantor General Disclosure Package (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the general
accounting records of the Guarantor and its subsidiaries subject to the internal
controls of the Guarantors accounting system or are derived directly from such
records by analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records of the Guarantor and its subsidiaries and
other procedures specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with such results,
except as otherwise specified in such letter.
All of the Guarantors financial statements and schedules included in material incorporated by
reference into the Guarantor Registration Statement, the Guarantor Prospectus or the Guarantor
General Disclosure Package shall be deemed included in the Guarantor Prospectus or the Guarantor
General Disclosure Package for purposes of this subsection.
(c) Each of the Company Statutory Prospectuses and the Guarantor Statutory Prospectuses
shall have been filed with the Commission in accordance with the Rules and Regulations and
Section 3(a) of this Agreement. No stop order suspending the effectiveness of either the
Company Registration Statement, the Guarantor Registration Statement or of any part thereof
shall have been issued and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company, the Guarantor or any Underwriter, shall be contemplated by the
Commission.
(d) Subsequent to the execution of the Terms Agreement, there shall not have occurred
(i) any change, or any development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of the Company and its
subsidiaries taken as a whole or the Guarantor and its subsidiaries taken
25
as a whole which, in the judgment of a majority in interest of the Underwriters
including the Representatives, if any, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company
or the Guarantor by Moodys Investors Service (Moodys) or Standard & Poors Ratings
Services, a division of the McGraw-Hill Companies (S&P), or any public announcement that
Moodys or S&P has under surveillance or review its rating of any debt securities of the
Company or the Guarantor (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any
change in U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a majority in interest of
the Underwriters including the Representatives, if any, be likely to prejudice materially
the success of the proposed issue, sale or distribution of the Offered Securities, whether
in the primary market or in respect of dealings in the secondary market; (iv) any material
suspension or material limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such exchange; (v) any suspension
of trading of any securities of the Company or the Guarantor on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by U.S. Federal or New York
authorities; (vii) any major disruption of settlements of securities or clearance services
in the United States; or (viii) any attack on, outbreak or escalation of hostilities or act
of terrorism involving the United States, any declaration of war by Congress or any other
national or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representatives, if any, the effect of any such
attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical
or inadvisable to proceed with completion of the offering or the sale of and payment for the
Offered Securities.
(e) The Representatives shall have received an opinion, dated the Closing Date, of
Cravath, Swaine & Moore LLP, special counsel to the Company, substantially to the effect
that:
(i) The Company is a limited liability company validly existing and in good standing
under the laws of the State of Delaware.
(ii) The Terms Agreement (including the provisions of this Agreement) has been duly
authorized, executed and delivered by the Company.
(iii) The Indenture has been duly qualified under the Trust Indenture Act, has been
duly authorized, executed and delivered by the Company, and (assuming due
authorization, valid execution and delivery thereof by the Guarantor and the
Trustee) constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other
similar laws affecting creditors rights generally from time to time in effect and
to general principles of equity, including, without limitation, concepts of
materiality,
26
reasonableness, good faith and fair dealing, regardless of whether considered in a
proceeding in equity or at law).
(iv) The Registered Securities have been duly authorized, executed and delivered by
the Company and, when authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant to the Terms
Agreement (including the provisions of this Agreement), will constitute legal, valid
and binding obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and other similar laws affecting creditors rights generally from time to time in
effect and to general principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law).
(v) No consent, approval, authorization or order of, or filing with, any United
States federal, New York State or Delaware governmental agency or body or any court
is required for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement), the Indenture or the Offered
Securities in connection with the issuance and sale of the Offered Securities by the
Company, except as required under the Act, the Trust Indenture Act, applicable state
securities or Blue Sky laws.
(vi) The Offered Securities and the Indenture conform in all material respects to
the description thereof contained in the Company Prospectus and the Company General
Disclosure Package.
(vii) The issue and sale by the Company of the Offered Securities and the
consummation of the other transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) will not violate any law, rule or
regulation of the United States of America or the State of New York or the Limited
Liability Company Act of the State of Delaware or, to our knowledge, any order or
decree of any court or government agency or instrumentality binding on the Company.
(viii) Based on the certificate dated the date of such counsels opinion from an
officer of the Company, the Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof as
described in the Company Prospectus and the Company General Disclosure Package, will
not be required to register as an investment company as such term is defined in
the Investment Company Act of 1940.
(ix) The Company Registration Statement initially became effective under the Act on
March 24, 2006 and no stop order suspending the effectiveness of the Company
Registration Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act.
27
(x) To such counsels knowledge, there is no contract, indenture, mortgage, loan
agreement, note, lease or other document entered into by the Company or any of its
subsidiaries of a character required to be described in the Company Registration
Statement or Company Prospectus, or to be filed as an exhibit, which is not
described or filed as required.
(xi) The statements made in the Company Prospectus and the Company General
Disclosure Package under the caption Certain United States Federal Income Tax
Consequences, insofar as they purport to describe material tax consequences of an
investment in the Offered Securities, fairly summarize the matters therein
described.
(f) The Representatives shall have received a disclosure letter, dated the Closing
Date, of Cravath, Swaine & Moore LLP, special counsel to the Company. Such disclosure
letter shall state that, although such counsel has made certain inquiries and investigations
in connection with the preparation of the Company Registration Statement, the Company
General Disclosure Package and the Company Prospectus, the limitations inherent in the role
of outside counsel are such that such counsel cannot and does not assume responsibility for
the accuracy or completeness of the statements made in the Company Registration Statement,
the Company General Disclosure Package and the Company Prospectus (except to the extent
expressly set forth in counsels opinion letter separately delivered to you as of its date).
Subject to the foregoing and on the basis of information gained in the course of the
performance of the services rendered by such counsel, such counsel shall confirm in its
disclosure letter that each of the Company Registration Statement, at the time it was last
amended or deemed to be amended, and the Company Prospectus, as of its date, appeared on its
face to be appropriately responsive in all material respects to the requirements of the Act
and the Trust Indenture Act and the applicable rules and regulations thereunder, except that
such counsel does not express any view as to the financial statements and other information
of an accounting or financial nature included therein or any Statement of Eligibility (Form
T-1) included as an exhibit to the Company Registration Statement. Furthermore, such
disclosure letter shall state that such counsels work in connection with the offering did
not disclose any information that gave such counsel reason to believe: (i) the Company
Registration Statement (insofar as relevant to the offering contemplated by the Company
Prospectus) as of the date of the Terms Agreement (the
Applicable Date
), 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, (ii) the Company
Prospectus, as of its date or at the date of such counsels disclosure letter, 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 light of the circumstances under which
they were made, not misleading, or (iii) the Company General Disclosure Package, considered
together as of the Applicable Time on the Applicable Date, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the statements,
in light of the circumstances under which they were made, not misleading, except that, in
each case, such counsel does not express any view as to the financial statements and other
information of an accounting or financial nature included therein. In providing the above
letter, counsel may further note
28
that such counsel has not been called to pass upon, and expresses no view regarding the
Guarantors Information included in the Company Registration Statement, the Company General
Disclosure Package or the Company Prospectus, and counsel shall be entitled to assume the
accuracy of the representations and warranties of the Guarantor set forth in Section 1(B).
In addition, counsel need express no view as to the conveyance of the Disclosure Package or
the information contained therein to investors.
(g) The Representatives shall have received an opinion, dated the Closing Date, of
David Yawman, Managing Director-Delegatee of the Company and Vice President, Associate
General Counsel and Assistant Secretary of The Pepsi Bottling Group, Inc., substantially to
the effect that:
(i) The Company has been duly formed and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware; the Company has
the limited liability company power and authority to own, lease and operate its
properties and conduct its business as described in the Company Prospectus and the
Company General Disclosure Package and to enter into and perform its obligations
under the Terms Agreement (including the provisions of this Agreement), the
Indenture and the Offered Securities; and the Company is duly qualified as a foreign
limited liability company to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Company
Material Adverse Effect.
(ii) All of the issued limited liability company membership interests of the Company
have been duly and validly authorized and issued and are owned directly or
indirectly by the Guarantor and The Pepsi Bottling Group, Inc., and, to the best of
such counsels knowledge, free and clear of all liens, encumbrances, equities, or
claims.
(iii) The Company is not (A) in violation of its certificate of formation or limited
liability company agreement or (B) in default in the performance or observance of
any agreement or instrument, except, in the case of clause (B), for such defaults
that would not result in a Company Material Adverse Effect.
(iv) The execution and delivery of and performance by the Company of its obligations
under the Terms Agreement (including the provisions of this Agreement), the
Indenture and the Offered Securities, and the consummation of the transactions
contemplated herein and therein and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary limited
liability company action and will not contravene any provision of the certificate of
formation or limited liability company agreement of the Company or of any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or instrument
binding upon the Company that is material to the Company and its subsidiaries taken
as a whole, or, to such counsels knowledge
29
after due inquiry, of any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any of its subsidiaries.
(v) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the consummation of the
transactions contemplated by the Terms Agreement (including the provisions of this
Agreement), the Indenture or the Offered Securities in connection with the issuance
and sale of the Offered Securities by the Company, except as required under the Act,
the Trust Indenture Act, applicable state securities or Blue Sky laws or from the
FINRA.
(vi) There is no legal or governmental proceeding pending or threatened, or to such
counsels knowledge after due inquiry, contemplated, no statute or regulation, and
no agreement, instrument or other document to which, in any case, the Company is a
party, or by which, in any case, any of the properties of the Company is bound, that
is required to be described in the Company Registration Statement, the Company
Prospectus or the Company General Disclosure Package that is not so described as
required.
(h) (A) The Representatives shall have received an opinion, dated the Closing Date, of
Womble Carlyle Sandridge & Rice, PLLC, special North Carolina counsel to the Guarantor,
substantially to the effect that:
(i) The Guarantor is a corporation in existence under the laws of the State of
North Carolina.
(ii) The Guarantor has authorized by all necessary corporate action, the
execution and delivery of the Underwriting Agreement (including the Terms
Agreement), the Indenture and the Guarantee.
(iii) The Underwriting Agreement (including the Terms Agreement), the Indenture
and the Guarantee have been duly executed by the Guarantor.
(B) The Representatives shall have received an opinion, dated the Closing Date, of
Davis Polk & Wardwell, special New York counsel to the Guarantor, substantially to the
effect that:
(i) The Indenture has been duly qualified under the Trust Indenture Act, and
assuming due authorization, execution and delivery by the Guarantor, the Company and
the Trustee, the Indenture is a valid and binding agreement of the Guarantor,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors rights generally, concepts of
reasonableness and equitable principles of general applicability, provided that
counsel need express no opinion as to the (x) enforceability of any waiver of rights
under any usury or stay law, and (y) applicability (and if applicable, the effect)
of Section 548 of the United States Bankruptcy Code or any
30
comparable provision of state law to the questions addressed above or on the
conclusions expressed with respect thereto.
(ii) Assuming due authorization by the Guarantor of the Guarantee, when the Offered
Securities, with the Guarantee endorsed thereon, have been issued, executed and
authenticated in accordance with the provisions of the Indenture and delivered to
and paid for by the Underwriters in accordance with the provisions of the Terms
Agreement (including the provisions of this Agreement), the Guarantee will
constitute the valid and binding obligation of the Guarantor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors rights generally, concepts of reasonableness and equitable
principles of general applicability, provided that counsel need express no opinion
as to the (x) enforceability of any waiver of rights under any usury or stay law,
and (y) applicability (and if applicable, the effect) of Section 548 of the United
States Bankruptcy Code or any comparable provision of state law to the questions
addressed above or on the conclusions expressed with respect thereto.
(iii) No consent, approval, authorization, or order of, or qualification with, any
governmental body or agency under the laws of the State of New York or any federal
law of the United States of America that in counsels experience is normally
applicable to transactions of the type contemplated by the Terms Agreement, the
Indenture or the Guarantee is required for the execution, delivery and performance
by the Guarantor of its obligations under the Terms Agreement or the Indenture,
except such as may be required under federal or state securities or Blue Sky laws as
to which counsel need express no opinion.
(iv) Counsel has considered the statements included in the Guarantor Prospectus
under the captions Description of the Notes and the Guarantee and Description of
Guarantees of Debt Securities insofar as they summarize provisions of the
Guarantee. In counsels opinion, such statements fairly summarize these provisions
in all material respects.
(v) The execution and delivery by the Guarantor of, and the performance by the
Guarantor of its obligations under, the Indenture, the Guarantee and the Terms
Agreement (collectively, the Documents) will not contravene any provision of the
laws of the State of New York or any federal law of the United States of America
that in our experience is normally applicable to general business corporations in
relation to transactions of the type contemplated by the Documents, provided that we
express no opinion as to (x) federal or state securities laws or (y) any law, rule
or regulation that is applicable to the Guarantor, the Documents or such
transactions solely because such law, rule or regulation is part of a regulatory
regime applicable to any party to any of the Documents or any of its affiliates due
to the specific assets or business of such party or such affiliate.
31
(vi) The Guarantor is not, and after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as described in the
Guarantor Prospectus will not be, required to register as an investment company as
such term is defined in the Investment Company Act of 1940, as amended.
(vii) The Guarantor Registration Statement initially became effective under the Act
on October 15, 2008 and, to counsels knowledge, no stop order suspending the
effectiveness of the Guarantor Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or threatened by
the Commission.
(C) The Representatives shall have received a disclosure letter, dated the Closing
Date, of Davis Polk & Wardwell, special New York counsel to the Guarantor. Such disclosure
letter shall state that many determinations involved in the preparation of the Guarantor
Registration Statement, the Guarantor General Disclosure Package and the Guarantor
Prospectus are of a wholly or partially non-legal character or relate to legal matters
outside the scope of counsels opinion separately delivered in respect of certain matters
under the laws of the State of New York and the federal laws of the United States of
America. As a result, counsel are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the Guarantor
Registration Statement, the Guarantor General Disclosure Package and the Guarantor
Prospectus, and counsel have not themselves checked the accuracy, completeness or fairness
of, or otherwise verified, the information furnished in such documents (except to the extent
expressly set forth in counsels opinion letter separately delivered to you today as to
statements included in the Guarantor Prospectus under the captions Description of the Notes
and the Guarantee and Description of Guarantees of Debt Securities). However, in the
course of acting as counsel to the Guarantor in connection with the preparation of the
Guarantor Registration Statement, the Guarantor General Disclosure Package and the Guarantor
Prospectus, counsel has generally reviewed and discussed with the Underwriters
representatives and counsel and with certain officers and employees of, and independent
public accountants for, the Guarantor the information furnished, whether or not subject to
counsels check and verification. Counsel has also reviewed and relied upon certain
corporate records and documents, letters from counsel and accountants and oral and written
statements of officers and other representatives of the Guarantor and others as to the
existence and consequence of certain factual and other matters.
On the basis of the information gained in the course of the performance of the services
rendered above, but without independent check or verification except as stated above:
(i) the Guarantor Registration Statement and the Guarantor Prospectus appear on their
face to be appropriately responsive in all material respects to the requirements of the Act
and the applicable rules and regulations of the Commission thereunder; and
32
(ii) nothing has come to counsels attention that causes us to believe that, insofar as
relevant to the offering of the Offered Securities:
(a) on the date of the Terms Agreement, the Guarantor Registration Statement
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading,
(b) at the Applicable Time, the Guarantor General Disclosure Package contained
any untrue statement of a material fact or omitted 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, or
(c) the Guarantor Prospectus as of the date of the Terms Agreement or as of the
Closing Date contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In providing the above letter, counsel may note that they have not been called to
pass upon, and they express no view regarding, (i) the financial statements or
financial schedules or other financial or accounting data included in the Guarantor
Registration Statement, the Guarantor General Disclosure Package or the Guarantor
Prospectus, (ii) any Statement of Eligibility of the Trustee on Form T-1 or (iii)
the Companys Information included in the Guarantor Registration Statement, the
Guarantor General Disclosure Package or the Guarantor Prospectus, and counsel shall
be entitled to assume the accuracy of the representations and warranties of the
Company set forth in Section 1(A). In addition, counsel need express no view as to
the conveyance of the Disclosure Package or the information contained therein to
investors.
(i) The Representatives shall have received an opinion, dated the Closing Date, of
Thomas H. Tamoney, Jr., Senior Vice President, Deputy General Counsel and Assistant
Secretary of the Guarantor, substantially to the effect that:
(i) The execution, delivery and performance by the Guarantor of its obligations
under the Terms Agreement, the Indenture and the Guarantee will not contravene any
provision of the Restated Charter or By-Laws of the Guarantor, or of any agreement
or other instrument binding upon the Guarantor or any of its subsidiaries that is
material to the Guarantor and its subsidiaries taken as a whole, or, to counsels
knowledge, of any judgment, order, or decree of any governmental body, agency, or
court having jurisdiction over the Guarantor or any of its subsidiaries, in each of
the foregoing cases except as would not reasonably be expected to have a material
adverse effect on the business, financial condition or results of operations of the
Guarantor and its subsidiaries, taken as a whole.
33
(ii) To counsels knowledge, there is no legal or governmental proceeding
pending or threatened to which the Guarantor or any of its significant subsidiaries
is a party, or by which any of the properties of the Guarantor or its significant
subsidiaries is bound, which would reasonably be expected to have a material adverse
effect on the business, financial condition or results of operations of the
Guarantor and its subsidiaries, taken as a whole; and to counsels knowledge, there
is no agreement or other document that is required to be described in the Guarantor
Registration Statement, the Guarantor Prospectus, or the Guarantor General
Disclosure Package, or that is required to be filed as an exhibit to the Guarantor
Registration Statement, that is not so described or filed.
(j) The Representatives shall have received from Cleary Gottlieb Steen & Hamilton LLP,
counsel for the Underwriters, such opinions or letters, dated the Closing Date, with respect
to the validity of the Offered Securities, the Company Registration Statement, the Guarantor
Registration Statement, the Company Prospectus, the Guarantor Prospectus, the Company
General Disclosure Package, the Guarantor General Disclosure Package and other related
matters as the Representatives may reasonably require, and the Company and the Guarantor
shall have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(k) The Representatives shall have received a certificate, dated the Closing Date, of a
Managing Director or Managing Director-Delegatee of the Company stating that:
(i) The representations, warranties and agreements of the Company in Section 1.A.
are true and correct as of the Closing Date, and the Company has complied in all
material respects with all its agreements contained herein;
(ii) To the best of his or her knowledge, no stop order suspending the effectiveness
of the Company Registration Statement or any part thereof has been issued and no
proceedings for such purpose have been instituted or are pending or are contemplated
or threatened by the Commission under the Act; and
(iii) To the best of his or her knowledge, there has not been any Company Material
Adverse Effect, except as described in the Company Prospectus and the Company
General Disclosure Package.
(l) The Representatives shall have received a certificate, dated the Closing Date, of
the Senior Vice President and the Treasurer of the Guarantor, or other officer of the
Guarantor reasonably acceptable to the Representatives, stating that:
(i) The representations, warranties and agreements of the Guarantor in Section 1.B.
are true and correct as of the Closing Date, and the Guarantor has complied in all
material respects with all its agreements contained herein;
34
(ii) To the best of his or her knowledge, no stop order suspending the effectiveness
of the Guarantor Registration Statement or any part thereof has been issued and no
proceedings for such purpose have been instituted or are pending or are contemplated
or threatened by the Commission under the Act; and
(iii) To the best of his or her knowledge, there has not been any Guarantor Material
Adverse Effect, except as described in the Guarantor Prospectus and the Guarantor
General Disclosure Package.
(m) The Representatives shall have received a letter, dated the Closing Date, of
Deloitte & Touche LLP, which meets the requirements of subsection (a) of this Section,
except that the specified date referred to in such subsection will be a date not more than
three days prior to the Closing Date for the purposes of this subsection (l).
(n) The Representatives shall have received a letter, dated the Closing Date, of KPMG
LLP, which meets the requirements of subsection (b) of this Section, except that the
specified date referred to in such subsection will be a date not more than three days prior
to the Closing Date for the purposes of this subsection (m).
Each of the Company and the Guarantor will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents applicable to it as the
Representatives may reasonably request. The Lead Underwriter may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters
under this Agreement and the Terms Agreement.
7.
Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter, its partners,
members, directors, officers and its affiliates and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Company Registration Statement, any Company
Statutory Prospectus, the Company Prospectus, or any Issuer Free Writing Prospectus, or
arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred;
provided
,
however
, that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon (i) any statement in or
omission or alleged omission from the Guarantors Information or (ii) an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the Company or the
Guarantor by or on behalf of any
35
Underwriter through the Representatives, if any, specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in the Terms Agreement. It is
understood and agreed that the Guarantors Information consists only of the information set
forth on Schedule A hereto (such information is referred to herein as the
Guarantors
Information
).
(b) The Guarantor will indemnify and hold harmless each Underwriter, its partners,
members, directors, officers and its affiliates and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Guarantor Registration Statement, any
Guarantor Statutory Prospectus, the Guarantor Prospectus, or any Issuer Free Writing
Prospectus, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided
,
however
, that the Guarantor will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is based upon (i)
any statement in or omission or alleged omission from the Companys Information or (ii) an
untrue statement or alleged untrue statement in or omission or alleged omission from any of
such documents in reliance upon and in conformity with written information furnished to the
Guarantor by or on behalf of any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the information described as such
in the Terms Agreement. It is understood and agreed that the Companys Information consists
only of the information set forth on Schedule B hereto (such information is referred to
herein as the
Companys Information
).
(c) Each Underwriter will severally and not jointly indemnify and hold harmless the
Company, the Guarantor, their respective managing directors, directors, officers who signed
the Company Registration Statement or Guarantor Registration Statement, affiliates and each
person, if any, who controls the Company or the Guarantor within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities to which the Company or the
Guarantor may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in the Company
Registration Statement, Guarantor Registration Statement, any Company Statutory Prospectus,
any Guarantor Statutory Prospectus , the Company Prospectus, the Guarantor Prospectus or any
Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein or necessary
to make the
36
statements therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to the Company or
the Guarantor by or on behalf of such Underwriter through the Representatives, if any,
specifically for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company or the Guarantor in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in the Terms Agreement.
(d) Promptly after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under subsection (a), (b) or (c) above, notify the
indemnifying party of the commencement thereof; but the failure to notify the indemnifying
party shall not relieve it from any liability that it may have under subsection (a), (b) or
(c) above except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability that it may
have to an indemnified party otherwise than under subsection (a), (b) or (c) above. In case
any such action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party);
provided
,
however
, if the defendants in
any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action on behalf of
the indemnified party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable for expenses
of more than one separate counsel (together with local counsel), approved by the
indemnifying party (the Representatives in the case of Sections 7(c), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party within a reasonable time after
notice of commencement of the action, in each of which cases the fee and expenses of counsel
shall be at the expense of the
37
indemnifying party. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action in respect
of which any indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on any claims that are
the subject matter of such action 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 an indemnified
party.
(e) If the indemnification provided for in this Section is unavailable or insufficient
to hold harmless an indemnified party under subsection (a), (b) or (c) above, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in subsection (a), (b)
or (c) above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company or the Guarantor on the one hand, as applicable, and the
Underwriters on the other from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company or the Guarantor on the one hand and
the Underwriters on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company or the Guarantor on the one
hand, as applicable, and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received by the
Underwriters from the Company under this Agreement. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantor on the one hand or the Underwriters on
the other and the parties relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Offered Securities
underwritten by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters obligations in this subsection (e) to contribute are
several in proportion to their respective underwriting obligations and not joint.
38
(f) The several obligations of the Company and the Guarantor under this Section shall
be in addition to any liability which the Company or the Guarantor may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each managing
director and director of the Company and the Guarantor, to each officer of the Company and
the Guarantor who has signed the Company Registration Statement or the Guarantor
Registration Statement, to their affiliates, and to each person, if any, who controls the
Company or the Guarantor within the meaning of the Act.
8.
Default of Underwriters.
If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities under the Terms Agreement and the aggregate principal amount of
Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total principal amount of Offered Securities, the Lead Underwriter may
make arrangements satisfactory to the Company for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made by the Closing
Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments under the Terms Agreement (including the provisions of this Agreement), to
purchase the Offered Securities that such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of
Offered Securities with respect to which such default or defaults occur exceeds 10% of the total
principal amount of Offered Securities and arrangements satisfactory to the Lead Underwriter and
the Company for the purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Guarantor, except as provided in Section 9. As used
in this Agreement, the term Underwriter includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.
9.
Survival of Certain Representations and Obligations
. The respective indemnities,
agreements, representations, warranties and other statements of the Company, the Guarantor or their
respective managing directors or officers and of the several Underwriters set forth in or made
pursuant to the Terms Agreement (including the provisions of this Agreement) will remain in full
force and effect, regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter, the Company, the Guarantor or any of their respective
representatives, officers or managing directors or any controlling person, and will survive
delivery of and payment for the Offered Securities. If the Terms Agreement is terminated or if for
any reason the purchase of the Offered Securities by the Underwriters is not consummated, each of
the Company and the Guarantor shall remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 3 and Section 5, as the case may be, and the respective obligations of the
Company, the Guarantor and the Underwriters pursuant to Section 7 shall remain in effect. If the
purchase of the Offered Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of the Terms Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv),
39
(vi), (vii) or (viii) of Section 6(d), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel) reasonably incurred
by them in connection with the offering of the Offered Securities. If the purchase of the Offered
Securities by the Underwriters is not consummated because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv), (vi), (vii)
or (viii) of Section 6(d), the Company shall not be responsible for the expenses of the
Underwriters.
10.
Notices
. All communications hereunder will be in writing and, (a) if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to them at their address
specified in the Terms Agreement, (b) if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at c/o The Pepsi Bottling Group, Inc., One Pepsi Way, Somers, New
York 10589-2212, Attention: Treasurer, with a copy to Cravath, Swaine & Moore LLP, Worldwide Plaza,
825 Eighth Avenue, New York, New York 10019-7475, Attention: William Fogg, Esq., or (c) if sent to
the Guarantor, will be mailed, delivered or telegraphed and confirmed to it at 700 Anderson Hill
Road, Purchase, New York 10577-1444, Attention: Treasurer, with a copy to Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, Attention: Joseph A. Hall.
11.
Successors
. The Terms Agreement (including the provisions of this Agreement) will inure
to the benefit of and be binding upon the Company, the Guarantor and such Underwriters as are
identified in the Terms Agreement and their respective successors and the officers and directors
and controlling persons referred to in Section 7, and no other person will have any right or
obligation hereunder.
12.
Representation of Underwriters
. Any Representatives will act for the several
Underwriters in connection with the financing described in the Terms Agreement, and any action
under such Terms Agreement (including the provisions of this Agreement) taken by the
Representatives jointly or by the Lead Underwriter will be binding upon all the Underwriters.
13.
Counterparts
. The Terms Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall together constitute one
and the same Agreement.
14.
Absence of Fiduciary Relationship
. The Company and the Guarantor severally acknowledge
and agree that:
(a) the Underwriters have been retained solely to act as underwriters in connection
with the sale of Offered Securities and that no fiduciary, advisory or agency relationship
between the Company and the Guarantor on the one hand and the Underwriters on the other has
been created in respect of any of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement incorporated by reference therein), irrespective
of whether the Underwriters have advised or is advising the Company or the Guarantor on
other matters;
(b) the price of the Offered Securities set forth in the Terms Agreement was
established by the Company and the Guarantor following discussions and arms-length
40
negotiations with the Representatives, and the Company and the Guarantor is capable of
evaluating and understanding and understands and accepts the terms, risks and conditions of
the transactions contemplated by the Terms Agreement;
(c) the Company and the Guarantor have been advised that the Underwriters and their
affiliates are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and the Guarantor and that the Underwriters have no
obligation to disclose such interests and transactions to the Company or the Guarantor by
virtue of any fiduciary, advisory or agency relationship; and
(d) the Company and the Guarantor waive, to the fullest extent permitted by law, any
claims it may have against the Underwriters for breach of fiduciary duty or alleged breach
of fiduciary duty and agree that the Underwriters shall have no liability (whether direct or
indirect) to the Company or the Guarantor in respect of such a fiduciary duty claim or to
any person asserting a fiduciary duty claim on behalf of or in right of the Company or the
Guarantor, including stockholders, employees or creditors of the Company or the Guarantor.
15.
Applicable Law
. This Agreement and the Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard to principles of
conflicts of laws.
16.
Submission to Jurisdiction
. The Company and the Guarantor hereby submit to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City
of New York in any suit or proceeding arising out of or relating to the Terms Agreement (including
the provisions of this Agreement) or the transactions contemplated thereby.
41
Schedule A
Guarantors Information
1.
|
|
The information in the Guarantor Statutory Prospectus (and corresponding information in the
Guarantor Prospectus) identified as Guarantors Information in Attachment A-1 hereto.
|
|
2.
|
|
The information in the Guarantor Registration Statement, other than information in the
Guarantor Statutory Prospectus, Guarantor Prospectus or Issuer Free Writing Prospectus marked
as (or corresponding to) Companys Information pursuant to Attachment B-1 or B-2 to Schedule B
hereto.
|
|
3.
|
|
The Guarantor Incorporated Documents.
|
|
4.
|
|
Any future filings made by the Guarantor with the Commission under Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act prior to the time the offering of the Offered Securities is
completed.
|
|
5.
|
|
The information in the Issuer Free Writing Prospectus(es) identified as Guarantors
Information in Attachment A-2 hereto.
|
|
6.
|
|
The information in any other free writing prospectus, as defined in Rule 405, that the
Guarantor agrees to identify as Guarantors Information.
|
Schedule B
Companys Information
1.
|
|
The information in the Company Statutory Prospectus (and the corresponding information in the
Company Prospectus) identified as Companys Information in Attachment B-1 hereto.
|
|
2.
|
|
The information in the Company Registration Statement, other than information in the Company
Statutory Prospectus, Company Prospectus or Issuer Free Writing Prospectus marked as (or
corresponding to) Guarantors Information pursuant to Attachment A-1 or A-2 to Schedule A
hereto.
|
|
3.
|
|
The Company Incorporated Documents.
|
|
4.
|
|
Any future filings made by the Company with the Commission under Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act prior to the time the offering of the Offered Securities is
completed.
|
|
5.
|
|
The information in the Issuer Free Writing Prospectus(es) identified as Companys Information
in Attachment B-2 hereto.
|
|
6.
|
|
The information in any other free writing prospectus, as defined in Rule 405, that the
Company agrees to identify as Companys Information.
|
EXHIBIT B
General Use Issuer Free Writing Prospectus
General Use Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Nos. 333-132716 and 333-154314
Pricing Term Sheet
October 21, 2008
BOTTLING GROUP, LLC
6.95% Senior Notes Due 2014
|
|
|
Issuer:
|
|
Bottling Group, LLC.
|
|
|
|
Guarantor:
|
|
PepsiCo, Inc.
|
|
|
|
Security:
|
|
6.95% Senior Notes Due 2014
|
|
|
|
Size:
|
|
$1,300,000,000
|
|
|
|
Maturity:
|
|
March 15, 2014
|
|
|
|
Coupon (Interest Rate):
|
|
6.95%
|
|
|
|
Yield to Maturity:
|
|
6.999%
|
|
|
|
Spread to Benchmark Treasury:
|
|
T + 435 basis points
|
|
|
|
Benchmark Treasury:
|
|
3.125% due September 30, 2013
|
|
|
|
Benchmark Treasury Yield:
|
|
2.649%
|
|
|
|
Interest Payment Dates:
|
|
March 15 and September 15 of each year,
beginning on March 15, 2009
|
|
|
|
Guarantee:
|
|
The Guarantor will be obligated to
unconditionally and irrevocably guarantee
the payment of principal of and interest and
premium, if any, on the 6.95% Senior Notes
Due 2014 on and after the guarantee
commencement date (as defined in the
prospectus),
except that, under the
circumstances described in the prospectus
under Description of the Notes and the
Guarantee Guarantee, such guarantee may
not become effective or may become effective
as to less than all of the principal of and
interest and premium, if any, on the
outstanding 6.95% Senior Notes Due 2014.
|
|
|
|
Optional Redemption:
|
|
Make-whole call at any time, with prior
consent of PepsiCo, Inc., at the greater of
100% of the principal amount of the notes
being redeemed or discounted present value
at Treasury rate plus 50 basis points.
|
|
|
|
Price to Public:
|
|
99.793% plus accrued interest, if any, from
October 24, 2008.
|
|
|
|
Settlement Date:
|
|
October 24, 2008
|
|
|
|
CUSIP Number:
|
|
10138M AH8
|
|
|
|
Joint Bookrunners:
|
|
Morgan Stanley & Co. Incorporated
Deutsche Bank Securities Inc.
HSBC Securities (USA) Inc.
J.P. Morgan Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
|
The Issuer and the Guarantor have each filed a Registration Statement (including a prospectus) with
the Securities and Exchange Commission for the Offering to which this communication relates.
Before you invest, you should read the prospectuses in those registration statements and other
documents the Issuer and the Guarantor have filed with the Securities and Exchange Commission for
more complete information about the Issuer, the Guarantor and this Offering. You may get these
documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Issuer,
the Guarantor, any underwriter or any dealer participating in the Offering will arrange to send you
the prospectuses if you so request by calling (1) Morgan Stanley & Co. Incorporated toll-free
1-866-718-1649, (2) Deutsche Bank Securities Inc. toll-free 1-800-503-4611, (3) HSBC Securities
(USA) Inc. toll-free 1-866-811-8049, (4) J.P. Morgan Securities Inc. 1-212-834-4533 or (5) Merrill
Lynch, Pierce, Fenner & Smith Incorporated toll-free 1-866-500-5408.
Any disclaimers or other notices that may appear below are not applicable to this communication and
should be disregarded. Such disclaimers or other notices were automatically generated as a result
of this communication being sent via Bloomberg or another email system.
Exhibit 4.2
BOTTLING GROUP, LLC
(as Obligor)
and
PEPSICO, INC.
(as Guarantor)
and
THE BANK OF NEW YORK MELLON
(as Trustee)
Indenture
Dated as
of October 24, 2008
SENIOR NOTES
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page
|
ARTICLE I
|
|
|
|
|
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
|
|
|
|
|
|
|
|
|
|
Section 1.01. Definitions
|
|
|
1
|
|
Section 1.02. Officers Certificates and Opinions
|
|
|
11
|
|
Section 1.03. Form of Documents Delivered to Trustee
|
|
|
12
|
|
Section 1.04. Acts of Holders
|
|
|
12
|
|
Section 1.05. Notices, Etc., to Trustee, Obligor and Guarantor
|
|
|
13
|
|
Section 1.06. Notice to Holders; Waiver
|
|
|
14
|
|
Section 1.07. Conflict with Trust Indenture Act
|
|
|
14
|
|
Section 1.08. Effect of Headings and Table of Contents
|
|
|
15
|
|
Section 1.09. Successors and Assigns
|
|
|
15
|
|
Section 1.10. Separability Clause
|
|
|
15
|
|
Section 1.11. Benefits of Indenture
|
|
|
15
|
|
Section 1.12. Governing Law
|
|
|
15
|
|
Section 1.13. Counterparts
|
|
|
15
|
|
Section 1.14. Legal Holidays
|
|
|
15
|
|
Section 1.15. Waiver of Jury Trial
|
|
|
15
|
|
Section 1.16. Force Majeure
|
|
|
15
|
|
|
|
|
|
|
ARTICLE II
|
|
|
|
|
THE NOTES
|
|
|
|
|
|
|
|
|
|
Section 2.01. Form and Dating
|
|
|
16
|
|
Section 2.02. Execution and Authentication
|
|
|
19
|
|
Section 2.03. Temporary Notes
|
|
|
21
|
|
Section 2.04. Registration, Transfer and Exchange
|
|
|
21
|
|
Section 2.05. Mutilated, Destroyed, Lost and Stolen Notes
|
|
|
24
|
|
Section 2.06. Payment of Interest; Interest Rights Preserved
|
|
|
24
|
|
Section 2.07. Persons Deemed Owners
|
|
|
26
|
|
Section 2.08. Cancellation
|
|
|
26
|
|
Section 2.09. Computation of Interest
|
|
|
26
|
|
Section 2.10. CUSIP Numbers
|
|
|
26
|
|
Section 2.11. Reduction or Withholding
|
|
|
27
|
|
|
|
|
|
|
ARTICLE III
|
|
|
|
|
DISCHARGE OF INDENTURE
|
|
|
|
|
|
|
|
|
|
Section 3.01. Discharge of Indenture
|
|
|
27
|
|
Section 3.02. Defeasance and Discharge of Covenants upon Deposit of Moneys, U.S.
Government Obligations
|
|
|
28
|
|
Section 3.03. Application of Trust Money
|
|
|
30
|
|
Section 3.04. Paying Agent to Repay Moneys Held
|
|
|
30
|
|
Section 3.05. Return of Unclaimed Amounts
|
|
|
30
|
|
Section 3.06. Reinstatement
|
|
|
30
|
|
i
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
Page
|
Section 3.07. Deposited Money and U.S. Government Obligations to Be Held in Trust;
Miscellaneous Provisions
|
|
|
31
|
|
|
|
|
|
|
ARTICLE IV
|
|
|
|
|
REMEDIES
|
|
|
|
|
|
|
|
|
|
Section 4.01. Events of Default
|
|
|
31
|
|
Section 4.02. Acceleration of Maturity; Rescission and Annulment
|
|
|
33
|
|
Section 4.03. Collection of Indebtedness and Suits for Enforcement
|
|
|
34
|
|
Section 4.04. Trustee May File Proofs of Claim
|
|
|
35
|
|
Section 4.05. Trustee May Enforce Claims without Possession of Notes
|
|
|
36
|
|
Section 4.06. Application of Money Collected
|
|
|
36
|
|
Section 4.07. Limitation on Suits
|
|
|
36
|
|
Section 4.08. Unconditional Right of Holders to Receive Payment of Principal,
Premium and Interest
|
|
|
37
|
|
Section 4.09. Restoration of Rights and Remedies
|
|
|
37
|
|
Section 4.10. Rights and Remedies Cumulative
|
|
|
37
|
|
Section 4.11. Delay or Omission Not Waiver
|
|
|
37
|
|
Section 4.12. Control by Holders
|
|
|
37
|
|
Section 4.13. Waiver of Past Defaults
|
|
|
38
|
|
Section 4.14. Undertaking for Costs
|
|
|
38
|
|
Section 4.15. Waiver of Stay or Extension Laws
|
|
|
38
|
|
|
|
|
|
|
ARTICLE V
|
|
|
|
|
THE TRUSTEE
|
|
|
|
|
|
|
|
|
|
Section 5.01. Certain Duties and Responsibilities of Trustee
|
|
|
39
|
|
Section 5.02. Notice of Defaults
|
|
|
40
|
|
Section 5.03. Certain Rights of Trustee
|
|
|
40
|
|
Section 5.04. Not Responsible for Recitals or Issuance of Notes
|
|
|
42
|
|
Section 5.05. May Hold Notes
|
|
|
42
|
|
Section 5.06. Money Held in Trust
|
|
|
42
|
|
Section 5.07. Compensation and Reimbursement
|
|
|
42
|
|
Section 5.08. Disqualification; Conflicting Interests
|
|
|
43
|
|
Section 5.09. Corporate Trustee Required; Eligibility
|
|
|
44
|
|
Section 5.10. Resignation and Removal; Appointment of Successor
|
|
|
44
|
|
Section 5.11. Acceptance of Appointment by Successor
|
|
|
45
|
|
Section 5.12. Merger, Conversion, Consolidation or Succession to Business
|
|
|
46
|
|
Section 5.13. Preferential Collection of Claims Against Obligor
|
|
|
47
|
|
Section 5.14. Appointment of Authenticating Agent
|
|
|
47
|
|
|
|
|
|
|
ARTICLE VI
|
|
|
|
|
HOLDERS LISTS AND REPORTS BY TRUSTEE, OBLIGOR AND GUARANTOR
|
|
|
|
|
|
|
|
|
|
Section 6.01. Obligor to Furnish Trustee Names and Addresses of Holders
|
|
|
48
|
|
Section 6.02. Preservation of Information; Communications to Holders
|
|
|
49
|
|
ii
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
Page
|
Section 6.03. Reports by Trustee
|
|
|
49
|
|
Section 6.04. Reports by Obligor and Guarantor
|
|
|
49
|
|
|
|
|
|
|
ARTICLE VII
|
|
|
|
|
CONSOLIDATION, MERGER OR TRANSFER
|
|
|
|
|
|
|
|
|
|
Section 7.01. Obligor May Consolidate, Etc., Only on Certain Terms
|
|
|
50
|
|
Section 7.02. Guarantor May Consolidate, Etc., Only on Certain Terms
|
|
|
50
|
|
Section 7.03. Successor Entity Substituted
|
|
|
51
|
|
|
|
|
|
|
ARTICLE VIII
|
|
|
|
|
SUPPLEMENTAL INDENTURES
|
|
|
|
|
|
|
|
|
|
Section 8.01. Supplemental Indentures without Consent of Holders
|
|
|
51
|
|
Section 8.02. Supplemental Indentures with Consent of Holders
|
|
|
52
|
|
Section 8.03. Execution of Supplemental Indentures
|
|
|
53
|
|
Section 8.04. Effect of Supplemental Indentures
|
|
|
54
|
|
Section 8.05. Conformity with Trust Indenture Act
|
|
|
54
|
|
Section 8.06. Documents to Be Given to Trustee
|
|
|
54
|
|
Section 8.07. Notation on Notes in Respect of Supplemental Indentures
|
|
|
54
|
|
|
|
|
|
|
ARTICLE IX
|
|
|
|
|
COVENANTS
|
|
|
|
|
|
|
|
|
|
Section 9.01. Payment of Principal, Premium and Interest
|
|
|
54
|
|
Section 9.02. Maintenance of Office or Agency
|
|
|
55
|
|
Section 9.03. Money for Note Payments to be Held in Trust
|
|
|
55
|
|
Section 9.04. Certificate to Trustee
|
|
|
56
|
|
Section 9.05. Existence
|
|
|
56
|
|
Section 9.06. Limitation on Liens
|
|
|
56
|
|
Section 9.07. Limitation on Sale-Leaseback Transactions
|
|
|
58
|
|
|
|
|
|
|
ARTICLE X
|
|
|
|
|
REDEMPTION OF NOTES
|
|
|
|
|
|
|
|
|
|
Section 10.01. Election to Redeem; Notice to Trustee
|
|
|
59
|
|
Section 10.02. Selection by Trustee of the Notes to Be Redeemed
|
|
|
59
|
|
Section 10.03. Notice of Redemption
|
|
|
60
|
|
Section 10.04. Deposit of Redemption Price
|
|
|
61
|
|
Section 10.05. Notes Payable on Redemption Date
|
|
|
61
|
|
Section 10.06. Notes Redeemed in Part
|
|
|
61
|
|
Section 10.07. Optional Redemption
|
|
|
61
|
|
Section 10.08. Mandatory Redemption
|
|
|
62
|
|
Section 10.09. Guarantors Consent
|
|
|
62
|
|
|
|
|
|
|
ARTICLE XI
|
|
|
|
|
GUARANTEE
|
|
|
|
|
|
|
|
|
|
Section 11.01. Guarantee
|
|
|
62
|
|
iii
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
Page
|
Section 11.02. Execution and Delivery of the Guarantee
|
|
|
66
|
|
Section 11.03. Limitation of the Guarantors Liability
|
|
|
66
|
|
Section 11.04. Subrogation
|
|
|
67
|
|
Section 11.05. Notice to Guarantor
|
|
|
67
|
|
EXHIBIT A: Guarantee
|
|
|
A-1
|
|
iv
THIS INDENTURE, among Bottling Group, LLC, a Delaware limited liability company (the
Obligor
), having its principal office at One Pepsi Way, Somers, New York 10589, PepsiCo,
Inc., a North Carolina corporation, as guarantor (the
Guarantor
), having its principal
office at 700 Anderson Hill Road, Purchase, NY 10577, and The Bank of New York Mellon, a New York
banking corporation, as trustee (the
Trustee
), is
made and entered into as of this 24th
day of October, 2008.
RECITALS OF THE OBLIGOR AND THE GUARANTOR
WHEREAS, the Obligor has duly authorized the issuance from time to time of its Senior Notes in
one or more series (the
Notes
) up to such principal amount or amounts as may from time to
time be authorized in accordance with the terms of this Indenture and to provide, among other
things, for the authentication, delivery and administration thereof, the Obligor has duly
authorized the execution and delivery of this Indenture;
WHEREAS, this Indenture provides for the issuance of a Guarantee of the Notes to be endorsed
on the Notes as provided herein;
WHEREAS, the Guarantor wishes to guarantee the Notes as provided herein;
WHEREAS, the Guarantee shall become effective on the Guarantee Commencement Date (as
hereinafter defined), except that under certain circumstances described below the Guarantee may not
become effective or may only be a partial guarantee of the principal of and interest and premium,
if any on the Notes; and
WHEREAS, all things necessary to make this Indenture a valid agreement of the Obligor and the
Guarantor, in accordance with its terms, have been done.
NOW, THEREFORE:
In consideration of the premises and the purchases of the Notes by the Holders (as hereinafter
defined) thereof, the Obligor, the Guarantor and the Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective Holders from time to time of the Notes or any
series thereof as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01.
Definitions
. For all purposes of this Indenture, and of any indenture
supplemental hereto, except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;
1
(2) all other terms used herein which are defined in the Trust Indenture Act (as
hereinafter defined), either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with U.S. GAAP; and
(4) all references in this instrument to designated Articles, Sections and other
subdivisions are to the designated Articles, Sections and other subdivisions of this
instrument as originally executed. The words herein, hereof, and hereunder and other
words of similar import refer to this Indenture as a whole and not to any particular
Article, Section, or other subdivision.
Act
, when used with respect to any Holder, has the meaning specified in Section
1.04.
Affiliate
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified Person.
For the purposes of this definition, control when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract, or otherwise; and the terms
controlling and controlled have meanings correlative to the foregoing.
Attributable Debt
for a lease means the aggregate of present values (discounted at a
rate per annum equal to the weighted average interest rate borne by all Outstanding Notes and
compounded semi-annually) of the obligations of the Obligor or any Restricted Subsidiary of the
Obligor for net rental payments during the remaining term of such lease (including any period for
which such lease has been extended or may, at the option of the lessor, be extended). The term
net rental payments under any lease of any period shall mean the sum of the rental and other
payments required to be paid in such period by the lessee thereunder, not including, however, any
amounts required to be paid by such lessee on account of maintenance and repairs, reconstruction,
insurance, taxes, assessments, water rates or similar charges required to be paid by such lessee
thereunder or any amounts required to be paid by such lessee thereunder contingent upon the amount
of sales, maintenance and repairs, reconstruction, insurance, taxes, assessments, water rates or
similar charges. Attributable Debt may be reduced by the present value of the rental obligations,
calculated on the same basis, that any sublessee has for all or part of the leased property.
Authenticating Agent
means any Person authorized by the Trustee to authenticate
Notes under Section 5.14.
Authentication Order
has the meaning specified in Section 2.02(1).
Bankruptcy Code
means title 11, U.S. Code, as amended, or any similar state or
federal law for the relief of debtors.
Benefitted Party
has the meaning specified in Section 11.01.
2
Board of Directors
means, with respect to the Guarantor, (a) the board of directors
of the Guarantor, (b) any duly authorized committee of that board, or (c) any officer, director, or
authorized representative of the Guarantor, in each case duly authorized by such Board to act
hereunder.
Board Resolution
means, with respect to the Guarantor, a copy of a resolution of the
Board of Directors certified by the Secretary or an Assistant Secretary of the Guarantor to have
been duly adopted by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
Business Day
means any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in New York City are authorized or required by law,
regulation or executive order to be closed.
Commission
means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now assigned to it under the
Trust Indenture Act, then the body performing such duties on such date.
Company Request
or
Company Order
means (a) with respect to the Obligor, a
written request or order, respectively, signed in the name of the Obligor by any Officer thereof
and delivered to the Trustee and (b) with respect to the Guarantor, a written request or order,
respectively, signed in the name of the Guarantor by any Officer thereof and delivered to the
Trustee.
Comparable Treasury Issue
means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to
be redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such Notes.
Comparable Treasury Price
means, with respect to any Redemption Date for the Notes
of any series, (a) the average of four Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (b) if
the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.
Consolidated Net Tangible Assets
means, with respect to any Person, the total book
value of assets of such Person and its Subsidiaries minus (a) all applicable depreciation,
amortization, and other valuation reserves, (b) the book value of assets resulting from write-ups
of capital assets of such Person and its Subsidiaries (except write-ups in connection with
accounting for acquisitions in accordance with U.S. GAAP), (c) all current liabilities of such
Person and its Subsidiaries (excluding any intercompany liabilities) and (d) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like intangibles, as
set forth on the latest quarterly or annual consolidated balance sheet of such Person and its
Subsidiaries prepared in accordance with U.S. GAAP.
3
Corporate Trust Office
means the office of the Trustee in the City of New York at
which at any particular time its corporate trust business shall be principally administered, which
office at the date hereof is located at 101 Barclay Street, New York, New York 10286, Attention:
Corporate Trust Administration, or such other address as the Trustee may designate from time to
time by notice to the Holders and the Obligor, or the principal corporate trust office of any
successor Trustee (or such other address as such successor Trustee may designate from time to time
by notice to the Holders and the Obligor).
Covenant Defeasance
has the meaning specified in Section 3.02.
Custodian
means the Person appointed by the Obligor to act as custodian for the
Depositary, which Person shall be the Trustee unless and until a successor Person is appointed by
the Obligor.
Debt
means, (a) with respect to the Obligor, any indebtedness of the Obligor for
borrowed money, capitalized lease obligations and purchase money obligations, or any guarantee of
such debt, in any such case which would appear on the consolidated balance sheet of the Obligor as
a liability, and, (b) with respect to the Guarantor, any indebtedness of the Guarantor for borrowed
money.
Defaulted Interest
has the meaning specified in Section 2.06.
Definitive Note
means a certificated Note registered in the name of the Holder
thereof and issued in accordance with this Indenture.
Depositary
means with respect to the Notes of any series issuable or issued in whole
or in part in global form, the Person designated as Depositary for such series by the Obligor
pursuant to Section 2.01 or 2.04, unless and until a successor Depositary for such series shall
have become such pursuant to the applicable provisions of this Indenture, and thereafter
Depositary with respect to the Notes of a series shall mean or include each Person who is then a
Depositary hereunder with respect to such series.
Discharged
has the meaning specified in Section 3.02.
DTC
has the meaning specified in Section 2.04(2).
Entity
means any corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust or unincorporated organization.
Event of Default
has the meaning specified in Section 4.01.
Exchange Act
means the U.S. Securities Exchange Act of 1934 (or any successor Act),
as amended, and the rules and regulations of the Commission promulgated thereunder.
Exempted Debt
means the sum, without duplication, of the following items outstanding
as of the date Exempted Debt is being determined: (a) Debt incurred after the date of this
Indenture and secured by Liens created or assumed or permitted to exist on any Principal
4
Property (as such term is defined with respect to the Obligor) or on any shares of stock of
any Restricted Subsidiary of the Obligor, other than Debt secured by Liens described in clauses (i)
through (vii) of Section 9.06(1) and (b) Attributable Debt of the Obligor and its Restricted
Subsidiaries in respect of all sale and lease-back transactions with regard to any Principal
Property (as such term is defined with respect to the Obligor) entered into pursuant to Section
9.07(2).
Funded Debt
means all Debt having a maturity of more than one year from the date of
its creation or having a maturity of less than one year but by its terms being renewable or
extendible, at the option of the obligor in respect thereof, beyond one year from its creation.
Global Note
means each note in global form issued in accordance with this Indenture
and bearing the Global Note Legend.
Global Note Legend
means the legend set forth in Section 2.01, which is required to
be placed on all Global Notes issued pursuant to this Indenture.
Guarantee
means the guarantee of the Obligors obligations under this Indenture and
the Notes by the Guarantor pursuant to Article XI.
Guarantee Commencement Date
means, if the Guarantee becomes effective pursuant to
Article XI hereof, the date that is one Business Day prior to the 2009 Notes Payment Date.
Guarantor
means PepsiCo, Inc., a North Carolina corporation, unless and until a
successor Entity or assign shall have assumed the obligations of the Guarantor under this Indenture
and the Guarantee and thereafter
Guarantor
shall mean such successor Entity or assign.
Holder
and
Holder of Notes
means a Person in whose name a Note is
registered in the Security Register.
Indenture
or
this Indenture
means this Indenture, as amended or
supplemented from time to time, including the Exhibits hereto.
Independent Investment Banker
means one of the Reference Treasury Dealers appointed
by the Obligor.
Interest Payment Date
, when used with respect to any Note, means the date specified
in such Note on which an installment of interest on such Note is scheduled to be paid.
Issue Date
of any Note (or portion thereof) means the earlier of (a) the date of
such Note or (b) the date of any Note (or portion thereof) for which such Note was issued (directly
or indirectly) on registration of transfer, exchange or substitution.
Legal Defeasance
has the meaning specified in Section 3.02.
Lien
has the meaning specified in Section 9.06(1).
5
Managing Director-Delegatee
means the Managing Director-Delegatee of the Obligor.
Managing Directors
means (a) the Managing Directors of the Obligor or (b) any duly
authorized committee of the Managing Directors of the Obligor.
Managing Directors Resolution
means, with respect to the Obligor, a copy of a
resolution of the Managing Directors certified by a Managing Director or a Managing
Director-Delegatee of the Obligor to have been duly adopted by the Managing Directors and to be in
full force and effect on the date of such certification, and delivered to the Trustee.
Maturity
, when used with respect to any Note, means the date on which all or a
portion of the principal amount outstanding under such Note becomes due and payable, whether on the
Maturity Date or by declaration of acceleration, call for redemption, or otherwise.
Maturity Date
, when used with respect to any Note or any installment of principal
thereof means the date specified in such Note as the fixed date on which the principal of such Note
or such installment of principal becomes due and payable.
Notes
has the meaning specified in the Recitals of the Obligor on the first page of
this Indenture, including any replacement Notes issued therefor in accordance with this Indenture.
Obligor
means Bottling Group, LLC, a Delaware limited liability company, unless and
until a successor Entity or assign shall have assumed the obligations of the Obligor under this
Indenture and the Notes and thereafter Obligor shall mean such successor Entity or assign.
Officer
means, (a) with respect to the Obligor, a Managing Director, a Managing
Director-Delegatee, the principal financial officer or any other officer or officers of the Obligor
designated pursuant to an applicable Managing Directors Resolution or (b) with respect to the
Guarantor, the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the
Executive Vice President, any Vice President, the Treasurer, the Assistant Treasurer or any other
officer or officers of the Guarantor designated pursuant to an applicable Board Resolution.
Officers Certificate
means, with respect to any Person, a certificate signed on
behalf of such Person by any one or two Officers of such Person that meets the applicable requirements of
this Indenture.
Opinion of Counsel
means, with respect to the Obligor or the Guarantor, a written
opinion of counsel to the Obligor or the Guarantor, as the case may be, which counsel may be an
employee of the Obligor or the Guarantor.
Outstanding
, when used with respect to the Notes or any series of Notes means, as of
the date of determination, all Notes or all Notes of such series, as the case may be, theretofore
authenticated and delivered under this Indenture, except:
6
(a) such Notes or such Notes of such series, as the case may be, theretofore cancelled
by the Trustee or delivered to the Trustee for cancellation;
(b) such Notes or such Notes of such series, as the case may be, or portions thereof,
for whose payment or redemption money in the necessary amount has been theretofore deposited
in trust with the Trustee or with any Paying Agent other than the Obligor, or, if the
Obligor shall act as its own Paying Agent, has been set aside and segregated in trust by the
Obligor; provided, in any case, that if such Notes or such Notes of such series, as the case
may be, are to be redeemed prior to their Maturity Date, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made;
(c) such Notes or such Notes of such series, as the case may be, in exchange for or in
lieu of which other Notes or other Notes of such series, as the case may be, have been
authenticated and delivered pursuant to this Indenture, or which shall have been paid, in
each case, pursuant to the terms of Section 2.05 (except with respect to any such Note or
any such Note of such series, as the case may be, as to which proof satisfactory to the
Trustee is presented that such Note or such Note of such series, as the case may be, is held
by a person in whose hands such Notes or such Notes of such series, as the case may be, is a
legal, valid, and binding obligation of the Obligor); and
(d) solely to the extent provided in Article III, Notes or Notes of such series, as the
case may be, which are subject to Legal Defeasance or Covenant Defeasance as provided in
Section 3.02. In determining whether the Holders of the requisite principal amount of such
Notes or Notes of such series, as the case may be, Outstanding have given a direction
concerning the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or concerning the exercise of any trust or power conferred upon the Trustee
under this Indenture, or concerning a consent on behalf of the Holders of the Notes or the
Holders of the Notes of such series, as the case may be, to the waiver of any past default
and its consequences, Notes or the Notes of such series, as the case may be, owned by the
Obligor, any other obligor upon the Notes or Notes of such series, as the case may be, or
any Affiliate of the Obligor or such other obligor shall be disregarded and deemed not to be
Outstanding. In determining whether the Trustee shall be protected in relying upon any
request, demand, authorization, direction, notice, consent, or waiver hereunder, only Notes
or Notes of such series, as the case may be, which a Responsible Officer assigned to the
corporate trust department of the Trustee actually knows to be owned by the Obligor or any
other obligor upon the Notes or the Notes of such series, as the case may be, or any
Affiliate of the Obligor or such other obligor shall be so disregarded. Notes or Notes of
such series, as the case may be, so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgees right to act as owner with respect to such Notes or Notes of such series, as the
case may be, and that the pledgee is not the Obligor or any other obligor upon the Notes or
the Notes of such series, as the case may be, or any Affiliate of the Obligor or such other
obligor.
Partial Guarantee Percentage
means a fraction (expressed as a percentage), (a) the
numerator of which is (i) the aggregate principal amount of the Notes Outstanding on the
7
2009 Notes Payment Date
minus
(ii) the principal amount of the 2009 Notes that the
Guarantor has determined in good faith that the Guarantor is likely to have to pay on the 2009
Notes on the 2009 Notes Payment Date under the 2009 Notes Guarantee and that is specified in the
Partial Payment Notice and (b) the denominator of which is the aggregate principal amount of the
Notes Outstanding on the 2009 Notes Payment Date.
Partial Payment Notice
has the meaning specified in Section 11.01.
Paying Agent
means any Person appointed by the Obligor to distribute amounts payable
by the Obligor on the Notes. The Obligor may act as its own Paying Agent. As of the date of this
Indenture, the Obligor has appointed The Bank of New York Mellon as Paying Agent with respect to
all Notes issuable hereunder.
PBG
means The Pepsi Bottling Group, Inc., a Delaware corporation.
Person
means any individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust, unincorporated organization, or government,
or any agency or political subdivision thereof.
Place of Payment
means the place specified pursuant to Section 9.02.
Predecessor Notes
of any particular Note means every previous Note evidencing all or
a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.05 in lieu of a lost, destroyed,
mutilated, or stolen Note shall be deemed to evidence the same debt as the lost, destroyed,
mutilated, or stolen Note.
Principal Property
means, (a) with respect to the Obligor, any single manufacturing
or processing plant, office building, or warehouse owned or leased by the Obligor or a Subsidiary
of the Obligor, in each case, located in the 50 states of the United States of America, the
District of Columbia or Puerto Rico, other than a plant, warehouse, office building, or portion
thereof which, in the opinion of the Managing Directors evidenced by a Managing Directors
Resolution, is not of material importance to the business conducted by the Obligor and its
Subsidiaries taken as an entirety and, (b) with respect to the Guarantor, any single manufacturing
or processing plant, office building, or warehouse owned or leased by the Guarantor or a Restricted
Subsidiary of the Guarantor, in each case, located in the 50 states of the United States of
America, the District of Columbia or Puerto Rico, other than a plant, warehouse, office building,
or portion thereof which, in the opinion of the Guarantors Board of Directors evidenced by a Board
Resolution, is not of material importance to the business conducted by the Guarantor and its
Restricted Subsidiaries taken as an entirety.
Record Date
means any date as of which the Holder of a Note of any series will be
determined for any purpose described herein, such determination to be made as of the close of
business on such date by reference to the Security Register, and in relation to a determination of
a payment of an installment of interest on the Notes of any series, shall have the meaning
specified in such series of Notes.
8
Redemption Date
when used with respect to any Notes to be redeemed, means the date
fixed for such redemption in any notice of redemption issued pursuant to this Indenture.
Redemption Price
when used with respect to any Notes to be redeemed, means the price
specified in Section 10.07.
Reference Treasury Dealer
means five primary U.S. Government securities dealers in
New York City (each, a Primary Treasury Dealer), either named in the prospectus supplement
relating to a series of Notes or appointed by the Obligor; provided, however, that if any of the
foregoing shall cease to be a Primary Treasury Dealer, the Obligor shall substitute therefor
another Primary Treasury Dealer.
Reference Treasury Dealer Quotations
means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Registrar
means the Person who maintains the Security Register, which Person shall
be the Trustee unless and until a successor Registrar is appointed by the Obligor.
Responsible Officer
, when used with respect to the Trustee, means any officer within
the corporate trust department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the Persons who at the
time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of such persons knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Indenture.
Restricted Subsidiary
means, (a) with respect to the Obligor or PBG, any current or
future Subsidiary of the Obligor or PBG, as the case may be, (i) substantially all of the property
of which is located, or substantially all of the business of which is carried on, within the 50
states of the United States of America, the District of Columbia or Puerto Rico and which is not a
foreign corporation, and (ii) which owns or leases any Principal Property or, (b) with respect to
the Guarantor, at any time, any Subsidiary of the Guarantor which is at the time not an
Unrestricted Subsidiary.
Scheduled Guarantee Commencement Date
means the date that is one Business Day prior
to the 2009 Notes Payment Date.
Securities Act
means the U.S. Securities Act of 1933 (or any successor Act), as
amended, and the rules and regulations of the Commission promulgated thereunder.
Security Register
has the meaning specified in Section 2.04.
Special Record Date
for the payment of any Defaulted Interest means a date fixed by
the Trustee pursuant to Section 2.06.
9
Subsidiary
of any specified Person means any Person at least a majority of whose
outstanding Voting Stock shall at the time be owned, directly or indirectly, by the specified
Person or by one or more of its Subsidiaries, or both.
Treasury Rate
means, with respect to any Redemption Date for the Notes: (i) the
yield, under the heading which represents the average for the immediately preceding week, appearing
in the most recently published statistical release designated H.15(519) or any successor
publication which is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption Treasury Constant Maturities, for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or after the remaining term
of the Notes to be redeemed, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue shall be calculated, and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the nearest month); or (ii) if
such statistical release (or any successor statistical release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.
Trust Indenture Act
or
TIA
means the Trust Indenture Act of 1939, as
amended, as in force as of the date hereof; provided that, with respect to every supplemental
indenture executed pursuant to this Indenture,
Trust Indenture Act
or
TIA
shall
mean the Trust Indenture Act of 1939, as then in effect.
Trustee
means the Person named as the
Trustee
in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter
Trustee
shall mean, or include each Person
who is then a Trustee hereunder, and if at any time there is more than one such Person, Trustee
as used with respect to the Notes of any series shall mean the Trustee with respect to the Notes of
that series.
2009
Notes
means the Obligors outstanding $1,300,000,000 5
5
/
8
% Senior Notes due 2009
guaranteed by the Guarantor.
2009 Notes Guarantee
means the Guarantors unconditional and irrevocable guarantee
of the 2009 Notes.
2009 Notes Payment Date
means February 17, 2009 or, if earlier, the date scheduled
for payment of (a) the redemption price (in the event of a redemption in whole) or (b) the
principal of and interest and premium, if any (in the event of acceleration), in each case, on the
2009 Notes.
2009 Notes Payment Deposit Date
means the date that is two Business Days prior to
the 2009 Notes Payment Date.
10
2009 Notes Trustee
means The Bank of New York Mellon, in its capacity as the trustee
under the indenture relating to the 2009 Notes, or its successor thereunder.
Unrestricted Subsidiary
means, with respect to the Guarantor, any Subsidiary of the
Guarantor (not at the time designated a Restricted Subsidiary of the Guarantor) (a) the major part
of whose business consists of finance, banking, credit, leasing, insurance, financial services, or
other similar operations, or any combination thereof, (b) substantially all the assets of which
consist of the capital stock of one or more Subsidiaries engaged in the operations referenced in
the preceding clause (a), (c) substantially all of the property of which is located, or
substantially all of the business of which is carried on, outside the 50 states of the United
States of America, the District of Columbia and Puerto Rico, (d) that is a foreign corporation or
(e) designated as such by the Guarantors Board of Directors. Any Subsidiary of the Guarantor
designated as a Restricted Subsidiary may be designated as an Unrestricted Subsidiary.
U.S. GAAP
means accounting principles as are generally accepted in the United States
of America at the date of any computation required or permitted under this Indenture.
U.S. Government Obligations
means (a) securities that are direct obligations of the
United States of America, the payment of which is unconditionally guaranteed by the full faith and
credit of the United States of America, and (b) securities that are obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed by the full faith and credit of the
United States of America, and also includes depository receipts issued by a bank or trust company
as custodian with respect to any of the securities described in the preceding clauses (a) and (b),
and any payment of interest or principal payable under any of the securities described in the
preceding clauses (a) and (b) that is held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository receipt, or from any
amount received by the custodian in respect of such securities, or from any specific payment of
interest or principal payable under the securities evidenced by such depository receipt.
Vice President
means, with respect to any Person, any vice president of that Person,
whether or not designated by a number or a word or words added before or after the title vice
president.
Voting Stock
means, as applied to any Person, capital stock (or other interests,
including partnership or membership interests) of any class or classes (however designated), the
outstanding shares (or other interests) of which have, by the terms thereof, ordinary voting power
to elect a majority of the members of the board of directors (or other governing body) of such
Person, other than stock (or other interests) having such power only by reason of the happening of
a contingency.
SECTION 1.02.
Officers Certificates and Opinions
. Every Officers Certificate,
Opinion of Counsel and other certificate or opinion to be delivered to the Trustee
11
under this Indenture with respect to any action to be taken by the Trustee shall include the
following:
(1) a statement that each individual signing such certificate or opinion has read all
covenants and conditions of this Indenture relating to such proposed action, including the
definitions of all applicable capitalized terms;
(2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.
SECTION 1.03.
Form of Documents Delivered to Trustee
.
(1) In any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified or covered
by only one document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to the other matters, and any such Person
may certify or give an opinion as to such matters in one or several documents.
(2) Any certificate or opinion of an officer of the Obligor may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations by, legal
counsel, unless such officer knows that any such certificate, opinion, or representation is
erroneous. Any opinion of counsel for the Obligor may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Obligor, unless such counsel knows that any such certificate, opinion, or
representation is erroneous.
(3) Where any Person is required to make, give, or execute two or more applications,
requests, consents, certificates, statements, opinions, or other instruments under this
Indenture, such instruments may, but need not, be consolidated and form a single instrument.
SECTION 1.04.
Acts of Holders
.
(1) Any request, demand, authorization, direction, notice, consent, waiver, or other
action provided by this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
12
otherwise expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee and (if expressly required by the applicable
terms of this Indenture) to the Obligor. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the Act of the
Holders signing such instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 5.01) conclusive in favor of the Trustee and the Obligor,
if made in the manner provided in this Section 1.04.
(2) The fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness to such execution or by the certificate of any
notary public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by an officer of a corporation or a member of a
partnership, on behalf of such corporation or partnership, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.
(3) The ownership of Notes shall for all purposes be determined by reference to the
Security Register, as such register shall exist as of the applicable Record Date.
(4) If the Obligor shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other action, the Obligor may, at its option, by
Managing Directors Resolution fix in advance a Record Date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice, consent, waiver or
other action, but the Obligor shall have no obligation to do so. If such Record Date is
fixed, such request, demand, authorization, direction, notice, consent, waiver or other
action may be given before or after such Record Date, but only the Holders of record at the
close of business on such Record Date shall be deemed to be Holders for the purpose of
determining whether Holders of the requisite proportion of Notes Outstanding have authorized
or agreed or consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Notes Outstanding shall be computed as of
such Record Date; provided that no such authorization, agreement or consent by the Holders
on such Record Date shall be deemed effective unless it shall become effective pursuant to
the provisions of this Indenture not later than six months after such Record Date.
(5) Any request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Note shall bind each subsequent Holder of such Note, and each
Holder of any Note issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof, with respect to anything done or suffered to be done by the Trustee or
the Obligor in reliance upon such action, whether or not notation of such action is made
upon such Note.
SECTION 1.05.
Notices, Etc., to Trustee, Obligor and Guarantor
. Any request, order,
authorization, direction, consent, waiver or other action to be taken by the
13
Trustee, the Obligor, the Guarantor or the Holders hereunder (including any Authentication
Order), and any notice to be given to the Trustee, the Obligor or the Guarantor with respect to any
action taken or to be taken by the Trustee, the Obligor, the Guarantor or the Holders hereunder,
shall be sufficient if made in writing and
(1) if to be furnished or delivered to or filed with the Trustee by the Obligor, the
Guarantor or any Holder, delivered to the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Administration, or
(2) if to be furnished or delivered to the Obligor by the Trustee or any Holder, and
except as otherwise provided in Section 4.01(1)(iii), mailed to the Obligor, first-class
postage prepaid, at the following address: c/o The Pepsi Bottling Group, Inc., One Pepsi
Way, Somers, New York 10589, Attention: Treasurer, or at any other address hereafter
furnished in writing by the Obligor to the Trustee, or
(3) if to be furnished or delivered to the Guarantor by the Obligor, the Trustee or any
Holder and except as otherwise provided in Section 4.01(2)(i), sent via facsimile
transmission to facsimile no: 914-253-3123, Attention: Treasurer and mailed to the
Guarantor, first-class postage prepaid at PepsiCo, Inc. 700 Anderson Hill Road, Purchase,
New York 10577, Attention: Treasurer, or at any other address hereafter furnished in
writing by the Guarantor to the Trustee.
SECTION 1.06.
Notice to Holders; Waiver
. Where this Indenture or any Note provides
for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise
expressly provided herein or in such Note) if in writing and mailed, first-class postage prepaid,
to each Holder affected by such event, at his or her address as it appears in the Security Register
as of the applicable Record Date, if any, not later than the latest date or earlier than the
earliest date prescribed by this Indenture or such Note for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such notice nor any defect in
any notice so mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture or any Note provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of
regular mail service as a result of a strike, work stoppage or otherwise, it shall be impractical
to mail notice of any event to any Holder when such notice is required to be given pursuant to any
provision of this Indenture or the applicable Note, then any method of notification as shall be
satisfactory to the Trustee and the Obligor shall be deemed to be sufficient for the giving of such
notice.
SECTION 1.07.
Conflict with Trust Indenture Act
. If any provision hereof limits,
qualifies or conflicts with another provision hereof which is required to be included in this
Indenture by any of the provisions of the TIA, such required provision shall control.
14
SECTION 1.08.
Effect of Headings and Table of Contents
. The Article and Section
headings herein and the Table of Contents hereof are for convenience only and shall not affect the
construction of any provision of this Indenture.
SECTION 1.09.
Successors and Assigns
. All covenants and agreements in this Indenture
by the Obligor and the Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 1.10.
Separability Clause
. In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11.
Benefits of Indenture
. Nothing in this Indenture or in any Notes,
express or implied, shall give to any Person, other than the parties hereto, their successors
hereunder, the Authenticating Agent, the Registrar, any Paying Agent, and the Holders of Notes (or
such of them as may be affected thereby), any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 1.12.
Governing Law
. This Indenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to rules governing the
conflict of laws.
SECTION 1.13.
Counterparts
. This instrument may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original, but all of which
shall together constitute but one and the same instrument.
SECTION 1.14.
Legal Holidays
. In any case where any Interest Payment Date or
Redemption Date or Maturity Date shall not be a Business Day, then (notwithstanding any other
provisions of this Indenture or of the Notes) payment of interest or principal (and premium, if
any) need not be made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, the Redemption Date or Maturity
Date, provided that no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Maturity Date, as the case may be.
SECTION 1.15.
Waiver of Jury Trial
. EACH OF THE OBLIGOR, THE GUARANTOR AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 1.16.
Force Majeure.
In no event shall the Trustee be responsible or liable
for any failure or delay in the performance of its obligations hereunder arising out of or caused
by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications
or computer (software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
15
ARTICLE II
THE NOTES
SECTION 2.01.
Form and Dating
.
(1)
General
.
(i) The Notes of each series shall be substantially in such form (not inconsistent with
this Indenture) as shall be established by or pursuant to a Managing Directors Resolution of
the Obligor and a Board Resolution of the Guarantor or in one or more indentures
supplemental hereto (which shall be executed by or on behalf of the Obligor and the
Guarantor), in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the provisions of
this Indenture, as may be required to comply with any law, stock exchange rule or DTC rule
or usage or with any rules or regulations pursuant thereto, all as may, consistently
herewith, be determined by the Officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note. Each Note shall be
dated the date of its authentication. The Obligor shall furnish any such legends to the
Trustee in writing. Except as otherwise provided in Section 11.01(2) and in the immediately
following proviso, each Note shall have an executed Guarantee from the Guarantor
substantially in the form of Exhibit A hereto endorsed thereon;
provided
,
however
, that any Note issued under this Indenture on and after the date which the
Guarantor provides a notice to the Trustee pursuant to Section 11.01(3) that the Guarantee
shall not become effective and the Guarantee Commencement Date shall not occur shall not
have an executed Guarantee from the Guarantor endorsed thereon; and
provided
,
further
, that any such Note, when issued, authenticated and delivered in accordance
with this Indenture, shall be treated as a single class of securities with other Outstanding
Notes of the same series which have the Guarantee endorsed thereon.
(ii) The Definitive Notes, if any, shall be printed, lithographed or engraved or
produced by any combination of those methods on steel engraved borders or may be produced in
any other manner permitted by the rules of any securities exchange, all as determined by the
Officers executing such Notes, as evidenced by their execution of such Notes.
(iii) The terms and provisions contained in the Notes shall constitute, and are hereby
expressly made, a part of this Indenture and the Obligor, the Guarantor and the Trustee, by
their execution and delivery of this Indenture expressly agree to such terms and provisions
and to be bound thereby. Nothing in the preceding sentence shall, however, limit the effect
of Section 2.02(1). However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall govern and be
controlling. All Notes of any one series shall be substantially identical except as to
denomination and except as may otherwise be
16
provided in or pursuant to such resolution of the Managing Directors or in any such
indenture supplemental hereto.
(iv) No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Note a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual signature of
an authorized officer, and such certificate upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered hereunder.
(v) The aggregate principal amount of Notes which may be authenticated and delivered
under this Indenture is unlimited. The Notes may be issued in one or more series. There
shall be established in or pursuant to a resolution of the Managing Directors of the Obligor
and a Board Resolution of the Guarantor and set forth in an Officers Certificate of the
Obligor and an Officers Certificate of the Guarantor, or established in one or more
indentures supplemental hereto, prior to the issuance of Notes of any series:
(a) the title of the Notes of the series (which shall distinguish the Notes of
the series from all other Notes);
(b) any limit upon the aggregate principal amount of the Notes of the series
that may be authenticated and delivered under this Indenture (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Notes of the series pursuant to Section 2.03, 2.04, 2.05, 8.07 or
10.06);
(c) the date or dates on which the principal of the Notes of the series is
payable;
(d) the rate or rates at which the Notes of the series shall bear interest, if
any, or the method by which such rate shall be determined, the date or dates from
which such interest shall accrue, the Interest Payment Dates on which such interest
shall be payable and the Record Dates, if any, for the determination of Holders to
whom interest is payable;
(e) the place or places where the principal of and any premium and interest on
the Notes of the series shall be payable;
(f) if other than the principal amount thereof, the portion of the principal
amount of Notes of the series which shall be payable upon declaration of acceleration
of the Maturity thereof pursuant to Section 4.02;
(g) the issue date;
(h) the issue price (expressed as a percentage of the aggregate principal amount
of the Notes) at which the Notes will be issued;
17
(i) if the Notes of the series are issuable in whole or in part in the form of
Definitive Notes or as one or more Global Notes, and if so, the identity of the
Depositary for such Global Notes if other than DTC;
(j) any other terms of the series (which terms shall not be inconsistent with
the provisions of this Indenture);
(k) any Events of Default with respect to the Notes of a particular series if
not set forth herein; and
(l) any covenants of the Obligor or the Guarantor with respect to the Notes of a
particular series if not set forth herein. Notwithstanding Section 2.01(1)(v)(b) and
unless otherwise expressly provided with respect to a series of Notes, the aggregate
principal amount of a series of Notes may be increased and additional Notes of such
series may be issued up to the maximum aggregate principal amount authorized with
respect to such series as increased;
provided
that, any such additional Notes
shall have identical terms as the outstanding Notes of such series, other than with
respect to the date of issuance, issue price, first Interest Payment Date, interest
accrual date and amount of interest payable on the first Interest Payment Date
applicable thereto;
provided
,
further
, that any such additional Notes
shall be treated as a single class with the outstanding Notes of such series for all
purposes under this Indenture.
(2)
Global Notes
.
(i) If the Obligor shall establish pursuant to Section 2.01(1) above that the Notes of
a series or a portion thereof are to be issued in the form of one or more Global Notes, then
the Obligor shall execute and the Trustee shall authenticate and make available for delivery
one or more Global Notes that (a) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of all of the Notes of such series issued in such
form and not yet cancelled, (b) shall be registered, in the name of the Depositary
designated for such Global Note pursuant to Section 2.04, or in the name of a nominee of
such Depositary, (c) shall be deposited with the Trustee, as Custodian for the Depositary,
and (d) shall bear a legend substantially as follows (
Global Note Legend
):
THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREINAFTER.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE
OBLIGOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER
18
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
(ii) Each Depositary designated pursuant to Section 2.01 or 2.04 for a Global Note
must, at the time of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable statute or
regulation, provided that the Depositary is required to be so registered in order to act as
depositary.
(iii) Any Global Note may be represented by more than one certificate. The aggregate
principal amount of each Global Note may from time to time be increased or decreased by
adjustments made on the records of the Registrar, as provided in this Indenture.
(3)
Trustees Certificate of Authentication
.
The Trustees Certificate of Authentication shall be in substantially the following form:
This is one of the Notes referred to in the within-mentioned Indenture.
Dated:___
|
|
|
|
|
|
The Bank of New York Mellon
as Trustee
|
|
|
By:
|
|
|
|
|
Authorized Signatory
|
|
|
|
|
|
|
SECTION 2.02.
Execution and Authentication.
(1) At any time and from time to time after the execution and delivery of this
Indenture, the Obligor may deliver Notes of any series executed on behalf of the Obligor by
any two Officers to the Trustee for authentication, and the Trustee, upon receipt of a
written order of the Obligor signed by an Officer of the Obligor and acknowledged by an
19
Officer of the Guarantor (the
Authentication Order
) shall thereupon in
accordance with the procedures acceptable to the Trustee set forth in the Authentication
Order, and subject to the provisions hereof, authenticate and deliver such Notes to or upon
the written order of the Obligor, without any further action by the Obligor or the Guarantor
except as set forth in this Section 2.02. The signature of any of the Officers on the Notes
may be manual or facsimile. Typographical and other minor errors or defects in any such
signature shall not affect the validity or enforceability of any Note that has been duly
authenticated and delivered by the Trustee. In authenticating such Notes and accepting the
additional responsibilities under this Indenture in relation to such Notes, the Trustee
shall receive, and (subject to Section 5.01) shall be fully protected in relying upon:
(a) a copy of (i) the Managing Directors Resolution of the Obligor and (ii) the Board
Resolution of the Guarantor relating to such series;
(b) an executed supplemental indenture, if any, and the documentation required to be
delivered pursuant to Section 8.06;
(c) an Officers Certificate of each of the Obligor and the Guarantor setting forth the
form or forms and terms of the Notes of such series pursuant to Section 2.01(1)(v), and
prepared in accordance with Section 1.02;
(d) an Opinion of Counsel of the Obligor, prepared in accordance with Section 1.02, to
the effect that
(i) the form or forms and terms of such Notes have been established by or
pursuant to a Managing Directors Resolution of the Obligor and a Board Resolution of
the Guarantor or by a supplemental indenture as permitted by Section 2.01 in
conformity with the provisions of this Indenture; and
(ii) such Notes, when executed and issued by the Obligor, guaranteed by the
Guarantor and authenticated and delivered by the Trustee in the manner and subject
to any conditions specified in such Opinion of Counsel, will constitute legal, valid
and binding obligations of the Obligor and Guarantor enforceable against each of
them in accordance with their terms except as any rights thereunder may be limited
by bankruptcy, insolvency and other similar laws affecting the enforceability of
creditors rights generally and by general equity principles. The Trustee shall
have the right to decline to authenticate and deliver any Notes under this Section
2.02 if the Trustee, being advised by counsel, determines that such action may not
lawfully be taken by the Obligor or the Guarantor or if the Trustee in good faith by
its board of directors or board of trustees, executive committee, or a trust
committee of directors or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability. If the Obligor and the
Guarantor shall establish pursuant to Section 2.01(1) that the Notes of a series or
a portion thereof are to be issued in the form of one or more Global Notes, then the
Obligor and the Guarantor shall execute and the Trustee shall authenticate and make
available for delivery one or more Global Notes as provided in Section 2.01(2)(i).
20
(2) Notes bearing the manual or facsimile signatures of individuals who were at any
time on or after the date hereof the proper officers of the Obligor and the Guarantor shall
bind each of the Obligor and the Guarantor, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery of such Notes
or did not hold such offices at the date of such Notes.
(3) The Notes shall be in fully registered form, without coupons, in minimum
denominations of $2,000 and integral multiples of $1,000 in excess thereof.
SECTION 2.03.
Temporary Notes
. Until certificates representing Notes of a series are
ready for delivery, the Obligor may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate and deliver temporary Notes of such series. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the Obligor considers
appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Obligor shall prepare and the Trustee shall authenticate Definitive Notes
of a series in exchange for temporary Notes of such series. Holders of temporary Notes shall be
entitled to all of the benefits of this Indenture.
SECTION 2.04.
Registration, Transfer and Exchange
.
(1)
Securities Register
. The Trustee shall keep a register of the Notes (the
Security Register
) which shall provide for the registration of such Notes, and for
transfers of such Notes in accordance with information, if any, to be provided to the
Trustee by the Obligor, subject to such reasonable regulations as the Trustee may prescribe.
Such register shall be in written form or in any other form capable of being converted into
written form within a reasonable time. At all reasonable times the information contained in
such register or registers shall be available for inspection at the Corporate Trust Office
of the Trustee or at such other office or agency to be maintained by the Obligor pursuant to
Section 9.02.
Upon due presentation for registration of transfer of any Note at the Corporate Trust
Office of the Trustee or at any other office or agency maintained by the Obligor pursuant to
Section 9.02, the Obligor shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes of authorized
denominations, of a like aggregate principal amount, series and Maturity Date.
(2)
Transfer of Global Notes
. Any other provision of this Section 2.04
notwithstanding, unless and until it is exchanged in whole or in part for Definitive Notes,
a Global Note representing all or a portion of the Notes of a series may not be transferred
except as a whole by the Depositary to a nominee of such Depositary, or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary, or by such Depositary
or any such nominee to a successor Depositary or a nominee of such successor Depositary.
The Obligor initially appoints The Depository Trust Company (
DTC
) to act as
Depositary with respect to the Global Notes of each series.
21
(3)
Legends
.
Each Global Note shall bear the legend specified in clause (i) of Section 2.01(2) on
the face thereof.
(4)
Definitive Notes
.
(i) Notwithstanding any other provisions of this Indenture or the Notes, a Global Note
may be exchanged for Notes of the same series registered in the names of any Person
designated by the Depositary in the event that (a) the Depositary has notified the Obligor
that it is unwilling or unable to continue as Depositary for such Global Note or such
Depositary has ceased to be a clearing agency registered under the Exchange Act, at a time
when the Depositary is required to be so registered in order to act as depositary, and the
Obligor has not appointed a successor Depositary within 90 days of receiving such notice or
of becoming aware of such cessation, (b) an Event of Default has occurred and is continuing
with respect to the applicable Notes, or (c) the Obligor, in its sole discretion, determines
that the applicable Notes issued in the form of Global Notes shall no longer be represented
by such Global Notes as evidenced by a Company Order delivered to the Trustee. Any Global
Note exchanged pursuant to clause (a) or (c) above shall be so exchanged in whole and not in
part and any Global Note exchanged pursuant to clause (b) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Note issued in exchange for a
Global Note of the same series or any portion thereof shall be a Global Note, provided that
any such Note so issued that is registered in the name of a Person other than the Depositary
or a nominee thereof shall not be a Global Note.
(ii) If at any time the Depositary for the Notes of any series notifies the Obligor
that it is unwilling or unable to continue as Depositary for such Notes or if the Depositary
has ceased to be a clearing agency registered under the Exchange Act at a time when the
Depositary is required to be so registered in order to act as depositary, the Obligor may
within 90 days of receiving such notice or of becoming aware of such cessation appoint a
successor Depositary with respect to such Notes.
(iii) If, in accordance with this Section 2.04(4), Notes of any series in global form
will no longer be represented by Global Notes, the Obligor will execute, and the Trustee,
upon receipt of an Authentication Order, will authenticate and make available for delivery,
Definitive Notes of such series in an aggregate principal amount equal to the principal
amount of the Global Notes of such series, in exchange for such Global Notes.
(iv) If a Definitive Note is issued in exchange for any portion of a Global Note after
the close of business at the office or agency where such exchange occurs on any Record Date
for the payment of interest and before the opening of business at such office or agency on
the next succeeding Interest Payment Date, interest shall not be payable on such Interest
Payment Date in respect of such Definitive Notes, but shall be payable on such Interest
Payment Date only to the Person to whom interest in respect of such portion of such Global
Note is payable in accordance with the provisions of this Indenture.
22
(v) Definitive Notes issued in exchange for a Global Note pursuant to this Section
2.04(4) shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are so registered. To permit
registrations of transfers and exchanges, the Obligor shall execute and the Trustee (or an
Authenticating Agent appointed pursuant to this Indenture) shall authenticate and make
available for delivery Definitive Notes at the Registrars request, and upon direction of
the Obligor. No service charge shall be made for any registration of transfer or exchange,
but the Obligor or the Trustee may require payment of a sum sufficient to cover any transfer
tax or other governmental charge payable in connection with any registration of transfer or
exchange.
(vi) When Definitive Notes are presented to the Trustee with a request to register the
transfer of such Definitive Notes or to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized denominations of the same series,
the Trustee shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the Definitive Notes
surrendered for transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Obligor and the Trustee, duly
executed by the Holder thereof or his attorney duly authorized in writing.
(vii) At such time as all interests in Global Notes of any series have either been
exchanged for Definitive Notes of such series or cancelled, such Global Notes shall be
cancelled by the Trustee in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian. At any time prior to such cancellation,
if any interest in a Global Note of any series is exchanged for Definitive Notes of such
series or cancelled, the principal amount of such Global Note shall, in accordance with the
standing procedures and instructions existing between the Depositary and the Custodian, be
reduced and an endorsement shall be made on such Global Note, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction.
(5) Notwithstanding anything in this Indenture to the contrary, (i) all Notes issued
upon any registration of transfer or exchange of Notes shall be the valid obligations of the
Obligor, evidencing the same debt, and entitled to the same benefits under this Indenture,
as the Notes surrendered upon such registration of transfer or exchange, (ii) all transfers
and exchanges of the Notes may be made only in accordance with the procedures set forth in
this Indenture, and (iii) the transfer and exchange of a beneficial interest in a Global
Note may only be effected through the Depositary in accordance with the procedures
promulgated by the Depositary.
(6) The Obligor shall not be required to (i) issue, register the transfer of, or
exchange any Note during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Notes under Section 10.03 and ending at the
close of business on the date of such mailing or (ii) register the transfer of or exchange
any Note so selected for redemption in whole or in part, except, in the case of any Note to
be redeemed in part, the portion thereof not to be redeemed.
23
(7) The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note (including any
transfers between or among Depositary participants or beneficial owners of interests in any
Global Note) other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly required by the
terms of, this Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
None of the Trustee, Registrar, Paying Agent or any Authenticating Agent shall have any
responsibility for any actions taken or not taken by the Depositary.
SECTION 2.05.
Mutilated, Destroyed, Lost and Stolen Notes
.
(1) If (i) any mutilated Note is surrendered to the Trustee, or the Obligor and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note
and (ii) there is delivered to the Obligor and the Trustee such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of notice to the
Obligor or the Trustee that such Note has been acquired by a protected purchaser, the
Obligor may in its discretion execute and, upon request of the Obligor, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Note, a new Note of like tenor, series, Maturity Date, and principal amount,
bearing a number not contemporaneously outstanding.
(2) In case any such mutilated, destroyed, lost or stolen Note has become or is about
to become due and payable, the Obligor in its discretion may, instead of issuing a new Note,
pay such Note.
(3) Upon the issuance of any new Note under this Section 2.05, the Obligor may require
the payment by the Holder thereof of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.
(4) Every new Note issued pursuant to this Section 2.05 in lieu of any mutilated,
destroyed, lost or stolen Note shall constitute an original contractual obligation of the
Obligor, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
(5) The provisions of this Section 2.05 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 2.06.
Payment of Interest; Interest Rights Preserved
.
(1) Interest on any Note which is payable and is punctually paid or duly provided for
on any Interest Payment Date shall, if so provided in such Note, be paid to the Person in
whose name that Note (or one or more Predecessor Notes) is registered at
24
the close of business on the applicable Record Date, notwithstanding any transfer or
exchange of such Note subsequent to such Record Date and prior to such Interest Payment Date
(unless, if so provided in such Note, such Interest Payment Date is also the Maturity Date,
in which case such interest shall be payable to the Person to whom principal is payable).
(2) Any interest on any Note which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called Defaulted Interest) shall
forthwith cease to be payable to the registered Holder on the applicable Record Date by
virtue of his having been such Holder; and, except as hereinafter provided, such Defaulted
Interest may be paid by the Obligor, at its election in each case, as provided in clause (i)
or (ii) below:
(i) The Obligor may elect to make payment of any Defaulted Interest to the Persons in
whose names any such Notes (or their respective Predecessor Notes) are registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Obligor shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each such Note and the date of the
proposed payment, and at the same time the Obligor shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Obligor of such Special Record
Date and, in the name and at the expense of the Obligor, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to the Holder of each such Note at his address as it appears in
the Security Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Notes (or their respective Predecessor Notes) are registered on such Special
Record Date and shall no longer be payable pursuant to the following clause (ii).
(ii) The Obligor may make payment of any Defaulted Interest in any other lawful manner
if, after notice given by the Obligor to the Trustee of the proposed payment pursuant to
this clause (ii), such manner of payment shall be deemed practicable by the Trustee.
(3) If any installment of interest on any Note called for redemption pursuant to
Article X is due and payable on or prior to the Redemption Date and is not paid or duly
provided for on or prior to the Redemption Date in accordance with the foregoing provisions
of this Section 2.06, such interest shall be payable as part of the Redemption Price of such
Notes.
25
(4) Interest on Notes may be paid at the office or agency maintained by the Obligor in
New York City pursuant to Section 9.02 or, at the Obligors option, through DTC, to the
Person entitled thereto or by such other means as may be specified in the form of such Note.
(5) Subject to the foregoing provisions of this Section 2.06 and the provisions of
Section 2.04, each Note delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 2.07.
Persons Deemed Owners.
(1) Prior to due presentment of a Note for registration of transfer, the Obligor, the
Guarantor, the Trustee, and any agent of the Obligor, the Guarantor or the Trustee may treat
the Person in whose name any Note is registered on the Security Register as the owner of
such Note for the purpose of receiving payment of principal, premium, if any, and (subject
to Section 2.06) interest, and for all other purposes whatsoever, whether or not such Note
is overdue and neither the Obligor, the Guarantor, the Trustee, nor any agent of the
Obligor, the Guarantor or the Trustee shall be affected by notice to the contrary.
(2) None of the Obligor, the Guarantor, the Trustee, any Authenticating Agent, any
Paying Agent, the Registrar or any Co-Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests and each of them may act or refrain
from acting without liability on any information relating to such records provided by the
Depositary.
SECTION 2.08.
Cancellation
. All Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by it. The
Obligor may at any time deliver to the Trustee for cancellation any Notes previously authenticated
and delivered hereunder which the Obligor may have acquired in any manner whatsoever, and all Notes
so delivered shall be promptly cancelled by the Trustee. Acquisition of such Notes by the Obligor
shall not operate as a redemption or satisfaction of the indebtedness represented by such Notes
unless and until the same are delivered to the Trustee for cancellation. No Note shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 2.08,
except as expressly permitted by this Indenture. The Trustee shall dispose of all cancelled Notes
in accordance with its customary procedures and, upon written request, deliver a certificate of
such disposition to the Obligor.
SECTION 2.09.
Computation of Interest
. Interest on the Notes shall be calculated on
the basis of a 360-day year of twelve 30-day months.
SECTION 2.10.
CUSIP Numbers
. The Obligor in issuing the Notes may use CUSIP and
ISIN numbers (if then generally in use), and, if so, the Trustee shall use the
26
CUSIP or ISIN numbers, as the case may be, in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP or ISIN number, as the case may be, either as printed on the
Notes or as contained in any notice of a redemption and that reliance may be placed only on the
other identification numbers printed on the Notes. The Obligor will promptly notify the Trustee in
writing of any change in the CUSIP or ISIN number.
SECTION 2.11.
Reduction or Withholding
. Payments on the Notes shall be subject to
reduction or withholding, if and to the extent required by applicable law.
ARTICLE III
DISCHARGE OF INDENTURE
SECTION 3.01.
Discharge of Indenture
. This Indenture will be discharged with respect
to the Notes of a series and will cease to be of further effect as to all such Notes (except as to
any surviving rights of transfer or exchange of such Notes expressly provided for herein), and the
Trustee, on demand of and at the expense of the Obligor, shall execute proper instruments
acknowledging the discharge of this Indenture with respect to the Notes of such series, when
(1) either
(i) all Notes of such series theretofore authenticated and delivered (except (a)
mutilated, lost, stolen or destroyed Notes which have been replaced or paid, as provided in
Section 2.05, and (b) Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Obligor and thereafter repaid to the Obligor or
discharged from such trust, as provided in Section 3.05) have been delivered to the Trustee
cancelled or for cancellation; or
(ii) all such Notes of such series not theretofore delivered to the Trustee cancelled
or for cancellation
(a) have become due and payable, or
(b) will, in accordance with their Maturity Date, become due and payable within
one year, or
(c) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in
the name, and at the expense, of the Obligor, and, in any of the cases described in
(a) or (b) above or in this clause (c), the Obligor has deposited or caused to be
deposited with the Trustee, as trust funds in trust for the benefit of the Holders of
such Notes for that purpose, U.S. dollars or non-callable U.S. Government Obligations
or a combination thereof in such amounts sufficient to pay and discharge the entire
indebtedness on the Notes of such series not theretofore delivered to the Trustee
cancelled or for cancellation, for principal of and interest and premium, if any, on
the Notes of such series to the date of such deposit (in the
27
case of Notes of such series that have become due and payable), or to the
Maturity Date or the Redemption Date, as the case may be;
(2) the Obligor has paid or caused to be paid all other sums payable by it with respect
to the Notes of such series under this Indenture;
(3) in the event of a deposit and defeasence under Section 3.01(1)(ii), no Event of
Default or event which with notice or lapse of time would become an Event of Default has
occurred and is continuing with respect to the Notes of such series on the date of such
deposit; and
(4) the Obligor has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel each stating that all conditions precedent to the discharge of this Indenture with
respect to the Notes of such series have been complied with, and in the event of a deposit
and defeasance under Section 3.01(1)(ii), in the case of the Opinion of Counsel, stating:
(i) either that no requirement to register under the Investment Company Act of 1940, as
amended, will arise as a result of the Obligors exercise of its option under this Section
3.01 or that any such registration requirement has been complied with; and
(ii) such deposit and defeasance will not result in a material breach or violation of,
or constitute a default under, any material agreement or instrument to which the Obligor is
a party. Notwithstanding the discharge of this Indenture with respect to the Notes of such
series, the obligations of the Obligor under Section 3.01(1) and the obligations of the
Obligor to the Trustee under Section 5.07 and to any Authenticating Agent under Section 5.14
shall survive, and the obligations of the Trustee under Sections 3.03 and 3.05 shall
survive.
SECTION 3.02.
Defeasance and Discharge of Covenants upon Deposit of Moneys, U.S.
Government Obligations
. At the Obligors option, either (a) the Obligor shall be deemed to
have been Discharged (as defined below) from its obligations with respect to the Notes of any
series on the 123rd day after the applicable conditions set forth below have been satisfied
(
Legal Defeasance
) and/or (b) the Obligor and the Guarantor shall cease to be under any
obligation to comply with any term, provision or condition set forth in Sections 7.01, 7.02, 9.06
and 9.07 with respect to the Notes of such series at any time after the applicable conditions set
forth below have been satisfied (
Covenant Defeasance
):
(1) The Obligor or the Guarantor shall have deposited or caused to be deposited
irrevocably with the Trustee, as trust funds, in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of the Notes of such series, an
amount of money, in cash in U.S. dollars sufficient, or in non-callable U.S. Government
Obligations, the principal of and interest on which, when due, will be sufficient, or a
combination thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge the entire indebtedness on the Notes of such series with
respect to principal, premium, if any, and accrued and unpaid interest to
28
the date of such deposit (in the case of Notes of any series that have become due and
payable), or to the Maturity Date or Redemption Date, as the case may be;
(2) No Event of Default, or event which with notice or lapse of time would become an
Event of Default with respect to the Notes of such series, shall have occurred and be
continuing on the date of such deposit;
(3) The Obligor shall have delivered to the Trustee an Officers Certificate and an
Opinion of Counsel each stating that all conditions precedent to the defeasance and
discharge contemplated by this Section 3.02 have been complied with, and, in the case of the
Opinion of Counsel stating that:
(i) the deposit and defeasance contemplated by this Section 3.02 will not cause the
Holders of the Notes of such series to recognize income, gain or loss for Federal income tax
purposes as a result of the Obligors exercise of its option under this Section 3.02 and
such Holders will be subject to Federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had not been exercised,
which Opinion of Counsel (in the case of a Legal Defeasance) must be based upon a ruling of
the Internal Revenue Service to the same effect or a change in applicable Federal income tax
law or related treasury regulations after the date of this Indenture; and
(ii) either no requirement to register under the Investment Company Act of 1940, as
amended, will arise as a result of the Obligors exercise of its option under this Section
3.02 or any such registration requirement has been complied with; and
(4) with respect to a Legal Defeasance, 123 days shall have passed during which no
Event of Default under clause (iv) or (v) of Section 4.01(1) or under clause (ii) or (iii)
of Section 4.01(2) has occurred.
If in connection with the exercise by the Obligor of any option under this Section
3.02, any series of Notes is to be redeemed, either notice of such redemption shall have
been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee
shall have been made.
Notwithstanding the exercise by the Obligor of its option under Section 3.02(b) with
respect to Section 7.01, the obligation of any successor Entity to assume the obligations to
the Trustee under Section 5.07 shall not be discharged.
Discharged
means, as to any series of Notes, that the Obligor shall be deemed
to have paid and discharged the entire indebtedness represented by, and obligations under,
the Notes of such series and to have satisfied all the obligations under this Indenture
relating to such series of Notes (and the Trustee, at the expense of the Obligor, shall
execute proper instruments acknowledging the same), except (A) the rights of Holders of
Notes of such series to receive, from the trust fund described in clause (1) above, payment
of the principal of, premium, if any, and the interest, if any, on such series of Notes when
such payments are due; (B) the Obligors obligations with respect to such Notes under
Sections 2.04, 2.05, 3.02(1), 3.03, and 9.02 and its obligations under
29
Section 5.07; and (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder.
SECTION 3.03.
Application of Trust Money
. All money and U.S. Government Obligations
deposited with the Trustee pursuant to Section 3.01 or Section 3.02 and all proceeds of such U.S.
Government Obligations and the interest thereon shall be held in trust and applied by it, in
accordance with the provisions of this Indenture, to the payment, either directly or through any
Paying Agent (including the Obligor acting as its own Paying Agent), as the Trustee may determine,
to the Persons entitled thereto, of the principal, premium, if any, and interest, for whose payment
such money and U.S. Government Obligations have been deposited with the Trustee; but such money and
U.S. Government Obligations need not be segregated from other funds except to the extent required
by law.
SECTION 3.04.
Paying Agent to Repay Moneys Held
. Upon the discharge of this Indenture
or a Legal Defeasance, in each case, with respect to the Notes of a series, all moneys then held by
any Paying Agent under the provisions of this Indenture with respect to such Notes (other than the
Trustee) shall, upon demand of the Obligor, be repaid to it or paid to the Trustee, and thereupon
such Paying Agent shall be released from all further liability with respect to such moneys.
SECTION 3.05.
Return of Unclaimed Amounts
. Any amounts deposited with or paid to the
Trustee or any Paying Agent for payment of the principal of, premium, if any, or interest on any
series of Notes or then held by the Obligor, in trust for the payment of the principal of, premium,
if any, or interest on any series of Notes and not applied but remaining unclaimed by the Holders
of such series of Notes for two years after the date upon which the principal of, premium, if any,
or interest on such series of Notes, as the case may be, shall have become due and payable, shall
be repaid to the Obligor by the Trustee on demand or (if then held by the Obligor) shall be
discharged from such trust; and the Holder of any Notes of such series shall thereafter, as an
unsecured general creditor, look only to the Obligor for any payment which such Holder may be
entitled to collect (until such time as such unclaimed amounts shall escheat, if at all, to any
applicable jurisdiction) and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Obligor as trustee thereof, shall thereupon cease.
Notwithstanding the foregoing, the Trustee or Paying Agent, before being required to make any such
repayment, may at the expense of the Obligor cause to be published once a week for two successive
weeks (in each case on any day of the week) in a newspaper printed in the English language and
customarily published at least once a day at least five days in each calendar week and of general
circulation in the Borough of Manhattan, in the City and State of New York, a notice that said
amounts have not been so applied and that after a date named therein any unclaimed balance of said
amounts then remaining will be promptly returned to the Obligor.
SECTION 3.06.
Reinstatement
. If the Trustee or any Paying Agent is unable to apply
any money in accordance with Section 3.03 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Obligors obligations under this Indenture and the Holders
of Notes shall be revived and reinstated as though no deposit had occurred pursuant
30
to Section 3.01 until such time as the Trustee or such Paying Agent is permitted to apply all
such money in accordance with Section 3.03.
SECTION 3.07.
Deposited Money and U.S. Government Obligations to Be Held in Trust;
Miscellaneous Provisions
. The Obligor shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant
to Section 3.02 or the principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the Notes.
ARTICLE IV
REMEDIES
SECTION 4.01.
Events of Default
. Event of Default, wherever used herein, means with
respect to Notes of any series, any of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) on and after the date hereof:
(i) default in the payment of any principal of or premium, if any, on the Notes of such
series when due (whether at maturity, upon redemption or otherwise);
(ii) default in the payment of any interest on any Note of such series, when it becomes
due and payable, and continuance of such default for a period of 30 days (unless the
Guarantor shall have elected to make and shall have made such payment before the expiration
of such 30-day period);
(iii) default in the performance or breach of any covenant or warranty of the Obligor
under this Indenture in respect of the Notes of such series, and continuance of such default
or breach for a period of 90 days after there has been given, by registered or certified
mail, to the Obligor by the Trustee or to the Obligor and the Trustee by the Holders of at
least a majority in aggregate principal amount of the Outstanding Notes of such series, a
written notice specifying such default or breach and requiring it to be remedied and stating
that such notice is a Notice of Default hereunder;
(iv) the entry of an order for relief against the Obligor, PBG or any Restricted
Subsidiary of PBG under the Bankruptcy Code by a court having jurisdiction in the premises
or a decree or order by a court having jurisdiction in the premises adjudging the Obligor,
PBG or any Restricted Subsidiary of PBG as bankrupt or insolvent under any other applicable
Federal or state law, or the entry of a decree or order approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in respect of
the Obligor, PBG or any Restricted Subsidiary of PBG under the Bankruptcy Code or any other
applicable Federal or state law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Obligor, PBG or any Restricted Subsidiary of
PBG or of any substantial part of their respective properties,
31
or ordering the winding up or liquidation of their respective affairs, and the
continuance of any such decree or order unstayed and in effect for a period of 90
consecutive days;
(v) the consent by the Obligor, PBG or any Restricted Subsidiary of PBG to the
institution of bankruptcy or insolvency proceedings against any of them, or the filing by
the Obligor, PBG or any Restricted Subsidiary of PBG of a petition or answer or consent
seeking reorganization or relief under the Bankruptcy Code or any other applicable Federal
or state law, or the consent by the Obligor, PBG or any Restricted Subsidiary of PBG to the
filing of any such petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Obligor, PBG or any Restricted
Subsidiary of PBG or of any substantial part of their respective properties, or the making
by the Obligor, PBG or any Restricted Subsidiary of PBG of an assignment for the benefit of
creditors, or the admission by the Obligor, PBG or any Restricted Subsidiary of PBG in
writing of the Obligors, PBGs or any Restricted Subsidiary of PBGs inability to pay debts
generally as they become due, or the taking of corporate action by the Obligor, PBG or any
Restricted Subsidiary of PBG in furtherance of any such action; and
(vi) the maturity of any Debt of the Obligor, PBG or any Restricted Subsidiary of PBG
having a then outstanding principal amount in excess of $75 million shall have been
accelerated by any holder or holders thereof or any trustee or agent acting on behalf of
such holder or holders, in accordance with the provisions of any contract evidencing,
providing for the creation of or concerning such Debt or failure to pay at the stated
maturity (and the expiration of any grace period) any Debt of the Obligor, PBG or any
Restricted Subsidiary of PBG having a then outstanding principal amount in excess of $75
million; and
(2) on and after the Guarantee Commencement Date (in the event that the Guarantee
Commencement Date shall occur):
(i) default in the performance or breach of any covenant or warranty of the Guarantor
under this Indenture, and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Guarantor by the Trustee
or to the Guarantor and the Trustee by the Holders of at least a majority in aggregate
principal amount of the Outstanding Notes, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a Notice of Default
hereunder;
(ii) the entry of an order for relief against the Guarantor under the Bankruptcy Code
by a court having jurisdiction in the premises or a decree or order by a court having
jurisdiction in the premises adjudging the Guarantor as bankrupt or insolvent under any
other applicable Federal or state law, or the entry of a decree or order approving as
properly filed a petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Guarantor under the Bankruptcy Code or any other applicable Federal or
state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Guarantor or of any substantial part of its property, or
32
ordering the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 90 consecutive days;
(iii) the consent by the Guarantor to the institution of bankruptcy or insolvency
proceedings against the Guarantor, or the filing by the Guarantor of a petition or answer or
consent seeking reorganization or relief under the Bankruptcy Code or any other applicable
Federal or state law, or the consent by the Guarantor to the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Guarantor or of any substantial part of its property, or the making
by the Guarantor of an assignment for the benefit of creditors, or the admission by the
Guarantor in writing of the Guarantors inability to pay debts generally as they become due,
or the taking of corporate action by the Guarantor in furtherance of any such action; and
(iv) the Guarantee ceases to be in full force and effect, or the Guarantor denies or
disaffirms its obligations under the Guarantee, in each case, in accordance with Article XI.
No Event of Default with respect to a single series of Notes issued hereunder (and
under or pursuant to any supplemental indenture, Managing Directors Resolution or Board
Resolution) necessarily constitutes an Event of Default with respect to any other series of
Notes.
SECTION 4.02.
Acceleration of Maturity; Rescission and Annulment
.
(1) If any Event of Default (other than an Event of Default specified in clause (iv) or
(v) of Section 4.01(1)) with respect to the Notes of any series occurs and is continuing,
then either the Trustee or the Holders of a majority in aggregate principal amount of the
Outstanding Notes of such series may declare the principal of all Outstanding Notes of such
series, and the interest, if any, accrued thereon, to be immediately due and payable by
notice in writing to the Obligor (and to the Trustee if given by Holders). If an Event of
Default described in clause (iv) or (v) of Section 4.01(1) occurs, then the principal amount
of all the Notes then outstanding and interest accrued thereon, if any, will become and be
immediately due and payable without any declaration or other act on the part of the Trustee
or the Holders of the Notes, to the full extent permitted by applicable law.
(2) At any time after such a declaration of acceleration has been made with respect to
the Notes of any series and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article IV provided, the Holders of a
majority in aggregate principal amount of the Outstanding Notes of such series by written
notice to the Obligor and the Trustee, may rescind and annul such declaration or waive past
defaults and its consequences, except with respect to a default in respect of a covenant or
provision of this Indenture which cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected thereby, if:
33
(i) the Obligor or the Guarantor has paid or deposited with the Trustee a sum
sufficient to pay:
(a) all overdue installments of interest, if any, on such series of Notes,
(b) the principal of (and premium, if any, on) any such series of Notes which
have become due otherwise than by such declaration of acceleration, and interest
thereon at the rate prescribed therefor by the Notes of such series, to the extent
that payment of such interest is lawful,
(c) interest on overdue installments of interest at the rate prescribed therefor
by the Notes of such series to the extent that payment of such interest is lawful,
and
(d) the reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, and all other amounts due the Trustee under
Section 5.07; and
(ii) all Events of Default, other than the nonpayment of the principal of the Notes of
such series which have become due solely by such acceleration, have been cured or waived as
provided in Section 4.13.
(3) No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 4.03.
Collection of Indebtedness and Suits for Enforcement
.
(1) The Obligor covenants that if:
(i) default is made in the payment of any installment of interest on any Note of any
series when such interest becomes due and payable, or
(ii) default is made in the payment of (or premium, if any, on) the principal of any
Note of any series at the Maturity thereof, and
(iii) any such default continues for any period of grace provided in relation to such
default pursuant to Section 4.01,
then, with respect to such series of Notes, the Obligor will, upon demand of the Trustee, pay to
it, for the benefit of the Holders of the Notes of such series, the whole amount then due and
payable on all Notes of such series for principal (and premium, if any) and interest, together with
interest (to the extent that payment of such interest shall be legally enforceable) upon the
overdue principal (and premium, if any) and upon overdue installments of interest at the rate of
interest prescribed therefor by the Notes of such series; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel and all other amounts due the Trustee under Section 5.07.
34
(2) If the Obligor fails to pay such amounts forthwith upon such demand, the Trustee,
in its own name and as trustee of an express trust, may institute a judicial proceeding for
the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment
or final decree, and may enforce the same against the Obligor or any other obligor upon such
Notes and collect the money adjudged or decreed to be payable in the manner provided by law
out of the property of the Obligor or any other obligor upon such Notes, wherever situated.
(3) If an Event of Default occurs and is continuing with respect to any series of
Notes, the Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Holders of such series of Notes by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 4.04.
Trustee May File Proofs of Claim
.
(1) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition, or other judicial proceeding relative
to the Obligor or any obligor upon the Notes or the property of the Obligor or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Notes
shall then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Obligor for the
payment of overdue principal or interest) shall be entitled and empowered, by intervention
in such proceedings or otherwise,
(i) to file and prove a claim for the whole amount of principal, premium, if any, and
interest owing and unpaid in respect of the Notes, and to file such other papers or
documents as may be necessary and advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements, and advances
of the Trustee, its agents and counsel, and all other amounts due the Trustee under Section
5.07) and of the Holders allowed in such judicial proceedings, and
(ii) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and any receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee and its agent and counsel, and any other amounts due the Trustee
under Section 5.07.
(2) Nothing herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
35
SECTION 4.05.
Trustee May Enforce Claims without Possession of Notes
. All rights of
action and claims under this Indenture or the Notes of any series may be prosecuted and enforced by
the Trustee without the possession of any of the Notes of such series or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel, be for the ratable benefit of the Holders of the Notes of such series.
SECTION 4.06.
Application of Money Collected
.
(1) Any money collected by the Trustee from the Obligor pursuant to this Article IV
shall be applied in the following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such money on account of principal, premium, if any, or
interest, if any, upon presentation of the Notes of any series and the notation thereon of
the payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section 5.07.
Second: To the payment of the amounts then due and unpaid upon such series of Notes for
principal, premium, if any, and interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind.
(2) Any money collected by the Trustee from the Guarantor with respect to the Guarantee
pursuant to this Article IV shall only be applied to the payment of the amount then due and
unpaid upon the Notes of any series for principal, premium, if any, and interest, in respect
of which or for the payment of which such money has been collected, ratably, without
preference or priority of any kind, upon presentation of the Notes of such series and the
notation thereon of the payment, if only partially paid, and upon surrender thereof, if
fully paid, at the date or dates fixed by the Trustee.
SECTION 4.07.
Limitation on Suits
. No Holder of any Note of any series may institute
any action under this Indenture, unless and until:
(1) such Holder has given the Trustee written notice of a continuing Event of Default
with respect to the Notes of such series;
(2) the Holders of a majority in aggregate principal amount of the Outstanding Notes of
such series have requested the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder has or have offered the Trustee such indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request as the Trustee may
require;
(4) the Trustee has failed to institute any such proceeding for 60 days after its
receipt of such notice, request and offer of indemnity; and
36
(5) no inconsistent direction has been given to the Trustee during such 60-day period
by the Holders of a majority in aggregate principal amount of the Outstanding Notes of such
series; it being understood and intended that no one or more Holders of Notes of any series
shall have any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes
of such series, or to obtain or to seek to obtain priority or preference over any other such
Holders or to enforce any right under this Indenture, except in the manner herein provided
and for the equal and proportionate benefit of all the Holders of all Notes of such series.
SECTION 4.08.
Unconditional Right of Holders to Receive Payment of Principal, Premium and
Interest
. Notwithstanding any other provision in this Indenture, the Holder of any Note shall
have the right, which is absolute and unconditional, to receive payment of the principal, premium,
if any, and (subject to Section 2.06) interest on such Note on or after the Maturity Date (or, in
the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement
of any such payment on or after such respective date, and such right shall not be impaired or
affected without the consent of such Holder.
SECTION 4.09.
Restoration of Rights and Remedies
. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, then and in every such case the Obligor, the
Trustee and the Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 4.10.
Rights and Remedies Cumulative
. Except as provided in Section 2.05(5),
no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right or remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy.
SECTION 4.11.
Delay or Omission Not Waiver
. No delay or omission of the Trustee or of
any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article IV or by law to the Trustee or
to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 4.12.
Control by Holders
. The Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes of any series shall have the right to direct
the time, method, and place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee with respect to the Notes of such series
provided that:
37
(1) the Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, determines that the action so directed may not lawfully
be taken or would conflict with this Indenture or if the Trustee in good faith shall, by a
Responsible Officer, determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such direction, and
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 4.13.
Waiver of Past Defaults
. Subject to Section 4.02, the Holders of not
less than a majority in aggregate principal amount of the Outstanding Notes of any series may, on
behalf of the Holders of all Notes of such series, waive any past default hereunder with respect to
the Notes of such series, except a default not theretofore cured:
(1) in the payment of principal, premium, if any, or interest on any Notes of such
series, or
(2) in respect of a covenant or provision in this Indenture which, under Article VIII,
cannot be modified without the consent of the Holder of each Outstanding Note of such
series.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.
SECTION 4.14.
Undertaking for Costs
. All parties to this Indenture agree, and each
Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable attorneys fees,
against any party litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this Section 4.14 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the Outstanding Notes of any
series to which the suit relates, or to any suit instituted by any Holder pursuant to Section 4.08.
SECTION 4.15.
Waiver of Stay or Extension Laws
. Each of the Obligor and the Guarantor
covenants (to the extent that each may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension
law (other than any bankruptcy law) wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the Obligor and the
Guarantor (to the extent that each may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
38
impede the execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE V
THE TRUSTEE
SECTION 5.01.
Certain Duties and Responsibilities of Trustee
.
(1) Except during the continuance of an Event of Default with respect to a series of
Notes:
(i) the Trustee undertakes to perform such duties and only such duties with respect to
such series of Notes as are specifically set forth in this Indenture, and no implied
covenants or obligations with respect to such series of Notes shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the requirements of
this Indenture (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
(2) In case an Event of Default with respect to a series of Notes has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in it by this
Indenture with respect to such series of Notes, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(3) No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this Subsection shall not be construed to limit the effect of Section 5.01(1);
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes of any series relating to
the time, method, and place of conducting any proceeding for any remedy available to the
Trustee with respect to such series of Notes, or exercising any trust or
39
power conferred upon the Trustee, under this Indenture with respect to such series of
Notes; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(4) Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section 5.01.
SECTION 5.02.
Notice of Defaults
. Within 90 days after the occurrence of any default
hereunder with respect to any series of Notes, the Trustee shall transmit by mail to all Holders of
Notes of such series, as their names and addresses appear in the Security Register, notice of such
default hereunder known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the principal of or
interest or premium, if any, on any Note of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive committee or a
trust committee of directors, and/or Responsible Officers of the Trustee determine in good faith
that the withholding of such notice is in the interests of the Holders of the Outstanding Notes of
such series and; provided, further, that, in the case of any default of the character specified in
clause (iii) of Section 4.01(1) or in clause (i) of Section 4.01(2), no such notice to Holders of
Notes of such series shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section 5.02, the term
default
means any event which is, or after notice
or lapse of time or both would become, an Event of Default.
SECTION 5.03.
Certain Rights of Trustee
. Except as otherwise provided in Section
5.01:
(1) the Trustee may conclusively rely and shall be protected in acting or refraining
from acting in good faith upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(2) any request or direction of the Obligor described herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Managing Directors
may be sufficiently evidenced by a Managing Directors Resolution;
(3) any request or direction of the Guarantor described herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;
(4) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any
40
action hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, conclusively rely upon an Officers
Certificate;
(5) the Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(6) the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(7) the Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records and premises of
the Obligor, personally or by agent or attorney at the sole cost of the Obligor and shall
incur no liability or additional liability of any kind by reason of such inquiry or
investigation;
(8) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(9) the permissive rights of the Trustee enumerated herein shall not be construed as
duties;
(10) the Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(11) in no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood of such loss
or damage and regardless of the form of action;
(12) the Trustee shall not be deemed to have notice of any default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Notes and this
Indenture;
41
(13) the rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder; and
(14) the Trustee may request that each of the Obligor and the Guarantor deliver a
certificate setting forth the names of individuals and/or titles of officers authorized at
such time to take specified actions pursuant to this Indenture.
SECTION 5.04.
Not Responsible for Recitals or Issuance of Notes
. The recitals
contained herein and in the Notes, except the certificates of authentication, shall be taken as the
statements of the Obligor, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the Obligor of the Notes
or the proceeds thereof. The Trustee shall not be charged with notice or knowledge of any Event of
Default under clause (vi) of Section 4.01(1) or clause (iv) of Section 4.01(2) or of the identity
of a Restricted Subsidiary of the Obligor, PBG or the Guarantor unless either (i) a Responsible
Officer of the Trustee assigned to and working in its Corporate Trust Office shall have actual
knowledge thereof or (ii) notice thereof shall have been given to the Trustee in accordance with
Section 1.05 from the Obligor, the Guarantor or any Holder.
SECTION 5.05.
May Hold Notes
. The Trustee or any Paying Agent, Registrar, or other
agent of the Obligor or the Guarantor, in its individual or any other capacity, may become the
owner or pledgee of Notes and, subject to Sections 5.08 and 5.12, may otherwise deal with the
Obligor or the Guarantor with the same rights it would have if it were not Trustee, Paying Agent,
Registrar, or such other agent.
SECTION 5.06.
Money Held in Trust
. Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as otherwise agreed
with the Obligor.
SECTION 5.07.
Compensation and Reimbursement
. The Obligor covenants and agrees:
(1) to pay the Trustee from time to time, and the Trustee shall be entitled to, such
compensation for all services rendered by it hereunder as the Obligor and the Trustee shall
from time to time agree in writing (which compensation, to the fullest extent permitted by
applicable law, shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its negligence or
bad faith; and
42
(3) to indemnify each of the Trustee or any predecessor Trustee and their agents for,
and to hold them harmless against, any loss, liability or expense, including taxes (other
than taxes based upon, measured by or determined by the income of the Trustee), incurred
without negligence, misconduct or bad faith on their part, arising out of or in connection
with the acceptance or administration of this trust, including the reasonable costs and
expenses of defending themselves against any claim (whether asserted by the Obligor, the
Guarantor, any Holder or any other Person) or liability in connection with the exercise or
performance of any of their powers or duties hereunder or in connection with enforcing the
provisions of this Section 5.07.
The Trustee shall have a lien prior to the Notes upon all property and funds held by it
hereunder for any amount owing it or any retiring Trustee pursuant to this Section 5.07, except
with respect to funds held in trust for the benefit of the Holders of particular Notes.
Without prejudice to any other rights available to the Trustee under applicable law, when the
Trustee incurs expenses or renders services in connection with an Event of Default specified in
clause (iv) or (v) of Section 4.01(1) and clause (ii) or (iii) of Section 4.01(2), such expenses
(including the reasonable charges and expenses of its counsel) and compensation for such services
are intended to constitute expenses of administration under any applicable Federal or State
bankruptcy, insolvency, reorganization, or other similar law.
The provisions of this Section shall survive the termination of this Indenture and the
resignation or removal of the Trustee.
SECTION 5.08.
Disqualification; Conflicting Interests
. If the Trustee has or shall
acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either
eliminate such interest or resign as Trustee, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted
by such act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a
trustee under this Indenture with respect to Notes of more than one series or by virtue of being a
Trustee under:
(i) the Indenture, dated as of February 8, 1999, among Pepsi Bottling Holdings, Inc.,
the Guarantor, as guarantor, and the Trustee, as supplemented by the Supplemental Indenture,
dated as of February 9, 1999, among Pepsi Bottling Holdings, Inc., the Guarantor, as
guarantor, and the Obligor relating to the 2009 Notes,
(ii) the Indenture, dated as of March 8, 1999, among PBG, the Obligor, as guarantor,
and the Trustee relating to the Senior Notes due 2029 of PBG and the Series B Senior Notes
due 2029 of PBG,
(iii) the Indenture, dated as of November 15, 2002, among the Obligor, PepsiCo, Inc.,
as guarantor, and the Trustee relating to the Senior Notes due 2012 and the Series B Senior
Notes due 2012 of the Obligor,
(iv) the Indenture, dated as of June 10, 2003, between the Obligor and the Trustee
relating to the Senior Notes due 2015 of the Obligor and the Series B Senior Notes due 2015
of the Obligor,
43
(v) the Indenture, dated as of October 1, 2003, between the Obligor and the Trustee
relating to Senior Notes in one or more series of the Obligor, and
(vi) the Indenture, dated as of March 30, 2006, between the Obligor and the Trustee
relating to Senior Notes in one or more series of the Obligor.
SECTION 5.09.
Corporate Trustee Required; Eligibility
. There shall at all times be a
Trustee hereunder that shall be a corporation organized and doing business under the laws of the
United States of America or of any State or Territory thereof or of the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then for the purposes
of this Section 5.09, the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the provisions of this
Section 5.09, it shall resign immediately in the manner and with the effect hereinafter specified
in this Article V.
SECTION 5.10.
Resignation and Removal; Appointment of Successor
.
(1) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article V shall become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of Section 5.11.
(2) The Trustee may resign at any time with respect to the Notes of one or more series
by giving written notice thereof to the Obligor. If the instrument of acceptance by a
successor Trustee required by Section 5.11 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning Trustee may, at
the expense of the Obligor, petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Notes of such series.
(3) The Trustee may be removed at any time with respect to the Notes of any series by
Act of the Holders of 66 2/3% in aggregate principal amount of the Outstanding Notes of such
series, delivered to the Trustee and to the Obligor.
(4) If at any time:
(i) the Trustee shall fail to comply with Section 5.08 after written request therefor
by the Obligor or by any Holder who has been a bona fide Holder of a Note for at least six
months, or
(ii) the Trustee shall cease to be eligible under Section 5.09 and shall fail to resign
after written request therefor by the Obligor or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or
44
any public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such
case, (A) the Obligor by a Managing Directors Resolution and the Guarantor by a Board
Resolution may, acting jointly, remove the Trustee with respect to all Notes, or (B) subject
to Section 4.14, any Holder who has been a bona fide Holder of a Note for at least six
months may, on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all Notes and the
appointment of a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, with respect to the Notes of one
or more series, the Obligor, by a Managing Directors Resolution, and the Guarantor, by Board
Resolution, acting jointly, shall promptly appoint a successor Trustee or Trustees with
respect to the Notes of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Notes of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Notes of any particular
series) and shall comply with the applicable requirements of Section 5.11. If, within one
year after such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Notes of any series shall be appointed by Act of the
Holders of 66 2/3% in aggregate principal amount of the Outstanding Notes of such series
delivered to the Obligor and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the applicable
requirements of Section 5.11, become the successor Trustee with respect to the Notes of such
series and to that extent supersede the successor Trustee appointed by the Obligor. If no
successor Trustee with respect to the Notes of any series shall have been so appointed by
the Obligor or the Holders and accepted appointment in the manner required by Section 5.11,
any Holder who has been a bona fide Holder of a Note of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Notes of such
series.
(6) The Obligor shall give notice of each resignation and each removal of the Trustee
with respect to the Notes of any series and each appointment of a successor Trustee with
respect to the Notes of any series to all Holders of Notes of such series in the manner
provided in Section 1.06. Each notice shall include the name of the successor Trustee with
respect to the Notes of such series and the address of its Corporate Trust Office.
SECTION 5.11.
Acceptance of Appointment by Successor
. In case of the appointment
hereunder of a successor Trustee with respect to all Notes, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Obligor and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Obligor or the successor Trustee, such retiring Trustee shall,
upon payment of its reasonable charges and subject to its lien, if any, provided by Section 5.07,
execute and deliver an instrument transferring to such successor Trustee all the rights,
45
powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Notes of one
or more (but not all) series, the Obligor, the retiring Trustee and each successor Trustee with
respect to the Notes of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to
the Notes of that or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Notes of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to
or change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the
execution and delivery of such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Notes of that or those series to
which the appointment of such successor Trustee relates; but, on request of the Obligor or any
successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with respect to the Notes of
that or those series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Obligor shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article V.
SECTION 5.12.
Merger, Conversion, Consolidation or Succession to Business
. Any
corporation into which the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be otherwise qualified and eligible under this Article V, without the execution
or filing of any paper or any further act on the part of any of the parties hereto. In case any
Notes shall have been authenticated, but not delivered, by the Trustee then in office, any
successor Trustee by merger, conversion or consolidation to such authenticating
46
Trustee may adopt such authentication and deliver the Notes so authenticated with the same
effect as if such successor Trustee had itself authenticated such Notes.
SECTION 5.13.
Preferential Collection of Claims Against Obligor
. If and when the
Trustee shall be or shall become a creditor of the Obligor (or of any other obligor upon the
Notes), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Obligor (or against any such other obligor, as the case may be).
SECTION 5.14.
Appointment of Authenticating Agent
.
(1) At any time when any of the Notes remain Outstanding the Trustee, with the approval
of the Obligor, may appoint an Authenticating Agent or Agents with respect to one or more
series of Notes which shall be authorized to act on behalf of the Trustee to authenticate
Notes of such series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 2.05, and Notes so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Notes by the Trustee or the Trustees certificate of
authentication, such reference shall be deemed to include authentication and delivery on
behalf of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Obligor and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state thereof or the
District of Columbia, authorized under such laws to act as an Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and, if other than the Obligor
itself, subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the purposes of this
Section 5.14, the combined capital and surplus of such Authenticating Agent shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 5.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 5.14.
(2) Any corporation into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which such Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section 5.14, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
(3) An Authenticating Agent may resign at any time by giving written notice thereof to
the Trustee and, if other than the Obligor, to the Obligor. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
47
thereof to such Authenticating Agent and, if other than the Obligor, to the Obligor.
Upon receiving such a notice of resignation or upon such a termination, or in case at any
time such Authenticating Agent shall cease to be eligible in accordance with the provisions
of this Section 5.14, the Trustee, with the approval of the Obligor, may appoint a successor
Authenticating Agent which shall be acceptable to the Obligor and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of Notes of the
series with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section 5.14.
(4) The Obligor agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section 5.14.
(5) If an appointment is made pursuant to this Section 5.14, the Notes may have
endorsed thereon, in addition to the Trustees certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Notes referred to in the within-mentioned Indenture.
Dated:
|
|
|
|
|
|
The Bank of New York Mellon
as Trustee
|
|
|
By:
|
|
|
|
|
As Authenticating Agent
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Authorized Signatory
|
|
|
|
|
|
|
ARTICLE VI
HOLDERS LISTS AND REPORTS BY TRUSTEE, OBLIGOR AND GUARANTOR
SECTION 6.01.
Obligor to Furnish Trustee Names and Addresses of Holders
. The Obligor
will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not more than 15 days after the Record Date for the payment of
interest in respect of each series of Notes, in such form as the Trustee may
48
reasonably require, a list of the names and addresses of the Holders of such Notes as
of such date,
(2) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Obligor of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished,
provided
that, in the case of (1) and (2), if the Trustee shall be the Registrar, such list
shall not be required to be furnished.
SECTION 6.02.
Preservation of Information; Communications to Holders
.
(1) The Trustee shall preserve, in as current a form as is reasonably practicable, the
names and addresses of Holders of Notes of each series contained in the most recent list
furnished to the Trustee as provided in Section 6.01 and the names and addresses of Holders
of Notes received by the Trustee. The Trustee may destroy any list furnished to it as
provided in Section 6.01 upon receipt of a new list so furnished.
(2) Holders of Notes may communicate as provided in Section 312(b) of the Trust
Indenture Act with other Holders of Notes with respect to their rights under this Indenture
or under the Notes.
(3) Every Holder of Notes, by receiving and holding the same, agrees with the Obligor
that the Obligor shall not be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Notes in accordance with Section
6.02(2), regardless of the source from which such information was derived.
SECTION 6.03.
Reports by Trustee
.
(1) Within 60 days after May 15 of each year commencing with the first May 15 following
the date of the initial issuance of Notes under this Indenture, the Trustee shall transmit
by mail to the Holders of Notes as their names and addresses appear in the Security
Register, a brief report dated as of such May 15, to the extent required under Section
313(a) of the Trust Indenture Act.
(2) The Trustee shall comply with Sections 313(b) and 313(c) of the Trust Indenture
Act.
(3) A copy of each such report shall, at the time for such transmission to Holders of
Notes, be filed by the Trustee with the Obligor, with each stock exchange upon which any
Notes are listed (if so listed) and also with the Commission. The Obligor agrees to
promptly notify the Trustee when any Notes become listed on any stock exchange and of any
delisting thereof.
SECTION 6.04.
Reports by Obligor and Guarantor
.
The Obligor and the Guarantor shall comply with the provisions of Section 314(a) and 314(c) of
the TIA.
49
ARTICLE VII
CONSOLIDATION, MERGER OR TRANSFER
SECTION 7.01.
Obligor May Consolidate, Etc., Only on Certain Terms
. The Obligor may
consolidate or merge with or into, or transfer or lease all or substantially all of its assets to,
any Entity that is organized and validly existing under the laws of any state of the United States
of America or the District of Columbia, and may permit any such Entity to consolidate with or merge
into the Obligor or transfer or lease all or substantially all of its assets to the Obligor,
provided that:
(1) the Obligor will be the surviving Entity or, if not, that the successor Entity will
expressly assume by a supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of and premium,
if any, and interest on all the Notes and the performance of every covenant of the Indenture
to be performed or observed by the Obligor;
(2) immediately after giving effect to such transaction, no Event of Default, and no
default or other event which, after notice or lapse of time, or both, would become an Event
of Default, will have happened and be continuing; and
(3)
the Obligor shall have delivered to the Trustee an Officers Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and any
such assumption involving the Obligor complies with the provisions of this Article VII.
SECTION 7.02.
Guarantor May Consolidate, Etc., Only on Certain Terms
. The Guarantor
may consolidate or merge with or into, or transfer or lease all or substantially all of its assets
to, any Entity,
provided
that:
(1) the Guarantor will be the surviving Entity or, if not, that the successor Entity
formed by such consolidation or into which the Guarantor is merged or the Entity which
acquires by transfer or lease all or substantially all of the properties and assets of the
Guarantor will be an Entity organized and existing under the laws of any state of the United
States of America or the District of Columbia, and will expressly assume, by a supplemental
indenture hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all of the obligations of the Guarantor under this Indenture and the Guarantee;
(2) immediately after giving effect to such transaction, no Event of Default, and no
default or other event which, after notice or lapse of time, or both, would become an Event
of Default, will have happened and be continuing; and
(3) the Guarantor shall have delivered to the Trustee an Officers Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and any
such assumption involving the Guarantor complies with the provisions of this Article VII.
50
In the event that the Guarantee shall not become effective and the Guarantee Commencement Date
shall not occur in accordance with the provisions of Section 11.01(3), the provisions of this
Section 7.02 shall not be applicable to the Guarantor.
SECTION 7.03.
Successor Entity Substituted
. Upon any consolidation or merger, or any
transfer or lease of all or substantially all of the properties and assets of the Obligor, or the
Guarantor, as the case may be, in accordance with Section 7.01 or Section 7.02, as the case may be,
the successor Entity will succeed to and be substituted for the Obligor or the Guarantor, as the
case may be, as Obligor or Guarantor, as the case may be, on the Notes or on the Guarantee, as the
case may be, with the same effect as if it had been named in this Indenture as the Obligor or as
the Guarantor, as the case may be, and the Obligor or the Guarantor, as the case may be, shall
thereupon, except in the case of a lease, be released from all obligations hereunder and under the
Notes and the Guarantee, as applicable. Such successor to the Obligor may cause to be signed, and
may issue either in its own name or in the name of the Obligor prior to such succession any or all
of the Notes issuable hereunder which theretofore shall not have been signed by the Obligor and
delivered to the Trustee; and, upon the order of such successor Entity instead of the Obligor and
subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee,
pursuant to the terms hereof, shall authenticate and shall deliver any Notes which previously shall
have been signed and delivered by the Officers of the Obligor to the Trustee for authentication,
and any Notes which such successor to the Obligor thereafter shall cause to be signed and delivered
to the Trustee for that purpose. All of the Notes so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.01.
Supplemental Indentures without Consent of Holders
. Without the consent
of the Holders of any Notes, the Obligor, the Guarantor and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto (which shall conform to the
provisions of the TIA as in force at the date of execution thereof), in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Entity to the Obligor or the Guarantor, or
successive successions, and the assumption by any such successor of the covenants,
agreements and obligations of the Obligor or the Guarantor pursuant to Article VII; or
(2) to add to the covenants of the Obligor or the Guarantor such further covenants,
restrictions or conditions for the protection of the Holders of the Notes as the Obligor,
the Guarantor and the Trustee shall consider to be for the protection of the Holders of the
Notes (and if such covenants are to be for the benefit of less than all series of Notes,
stating that such covenants are expressly being included solely for the benefit of such
series); or
51
(3) to evidence the surrender of any right or power of the Obligor or the Guarantor; or
(4) to cure any defect or ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein or in any supplemental indenture,
or to make any other provisions with respect to matters or questions arising under this
Indenture; or
(5) to add to this Indenture such provisions as may be expressly permitted by the TIA
as in effect at the date as of which this instrument is executed or any corresponding
provision in any similar federal statute hereafter enacted; or
(6) to comply with any requirements of the Commission in connection with qualifying, or
maintaining the qualification of, this Indenture under the TIA; or
(7) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Notes of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 5.11; or
(8) to add to the rights of the Holders of the Notes; or
(9) to provide for the issuance of and establish the form or forms and terms and
conditions of Notes of any series as permitted by this Indenture; or
(10) to add any additional Events of Default for the benefit of the Holders of all or
any series of Notes (and if such additional Events of Default are to be for the benefit of
less than all series of Notes, stating that such additional Events of Default are expressly
being included solely for the benefit of such series); or
(11) to conform this Indenture to the section entitled Description of Debt Securities
in the prospectus of the Obligor dated March 24, 2006 filed with
the Commission or the section entitled Description of Guarantees of
Debt Securities in the prospectus of the Guarantor dated
October 15, 2008 filed with the Commission, or the section
entitled Description of the Notes and the Guarantee in
the prospectus supplement to
such prospectuses dated October 21, 2008 filed with the
Commission, or any corresponding section of such prospectuses or
prospectus supplements pursuant to which any additional series of Notes is issued under this
Indenture, except as restricted under the TIA.
No supplemental indenture for the purposes identified in clause (2), (3), (4), (8) or (10)
above may be entered into if to do so would adversely affect the interest of the Holders of Notes.
Any such supplemental indenture authorized by the provisions of this Section 8.01 may be
executed without the consent of the Holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 8.02.
SECTION 8.02.
Supplemental Indentures with Consent of Holders
. With the consent of
the Holders of not less than a majority in aggregate principal amount of the
52
Outstanding Notes of all series affected by such supplemental indenture (voting as one class),
the Obligor, when authorized by a Managing Directors Resolution, the Guarantor, when authorized by
a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or
of modifying in any manner the rights of the Holders of the Notes of each such series under this
Indenture; provided, however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(1) change the Maturity Date or the stated payment date of any payment of premium or
interest payable on such Note, or reduce the principal amount thereof, or any amount of
interest payable thereon, or change the method of computing the amount of interest payable
thereon on any date, or change any Place of Payment where, or the coin or currency in which,
any such Note or any payment of principal, premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after the same
shall become due and payable, whether at Maturity or, in the case of redemption, on or after
the Redemption Date; or
(2) reduce the percentage in principal amount of the Outstanding Notes of the relevant
series, the consent of whose Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver of certain defaults hereunder and their
consequences, provided for in this Indenture; or
(3) modify any of the provisions of this Section 8.02, Section 4.08 or Section 4.13,
except to increase any such percentage set forth in this Section 8.02 or Section 4.13 or to
provide that certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby, provided, however, that
this clause shall not be deemed to require the consent of any Holder with respect to changes
in the references to the Trustee and concomitant changes in this Section, or the deletion
of this proviso, in accordance with the requirements of Sections 5.11 and 8.01(7).
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Notes, or which modifies the rights of the Holders of Notes of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Notes of any other series.
It shall not be necessary for any Act of Holders under this Section 8.02 to approve the
particular form of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.
SECTION 8.03.
Execution of Supplemental Indentures
. In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this Article VIII or the
modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 5.01) shall be fully protected in relying upon, in addition to the
documents required by Section 1.02, an Opinion of Counsel stating that the
53
execution of such supplemental indenture is authorized or permitted by this Indenture. Upon
request of the Obligor and the Guarantor and, in the case of Section 8.02, upon filing with the Trustee of evidence
of an Act of Holders as aforementioned, the Trustee shall join with the
Obligor and the Guarantor
in the execution of such supplemental indenture unless such supplemental indenture affects the
Trustees own rights, powers, trusts, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
SECTION 8.04.
Effect of Supplemental Indentures
. Upon the execution of any
supplemental indenture under this Article VIII, this Indenture shall be and be deemed to be
modified and amended in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and the respective rights, limitation of rights, duties, powers,
trusts and immunities under this Indenture of the Trustee, the Obligor, the Guarantor and every
Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be
determined, exercised and enforced thereunder to the extent provided therein.
SECTION 8.05.
Conformity with Trust Indenture Act
. Every supplemental indenture
executed pursuant to this Article VIII shall conform to the requirements of the TIA as then in
effect.
SECTION 8.06.
Documents to Be Given to Trustee
. The Trustee, subject to the
provisions of Section 5.01, may receive an Officers Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this Article VIII complies
with the applicable provisions of this Indenture.
SECTION 8.07.
Notation on Notes in Respect of Supplemental Indentures
. Notes of any
series authenticated and delivered after the execution of any supplemental indenture pursuant to
the provisions of this Article may bear a notation in form approved by the Trustee for such series
as to any matter provided for by such supplemental indenture. If the Obligor or the Trustee shall
so determine, new Notes of any series so modified as to conform, in the opinion of the Trustee and
the Managing Directors, to any modification of this Indenture contained in any such supplemental
indenture may be prepared by the Obligor, authenticated by the Trustee and delivered in exchange
for the Notes of such series then Outstanding.
ARTICLE IX
COVENANTS
SECTION 9.01.
Payment of Principal, Premium and Interest
. The Obligor covenants and
agrees for the benefit of each series of Notes that it will duly and punctually pay or cause to be
paid the principal, premium, if any, and interest on such series of Notes on the dates and in the
manner provided in such series of Notes, and will duly comply with all the other terms, agreements
and conditions contained in this Indenture for the benefit of such series of Notes.
The Obligor shall pay interest (including post-petition interest in any proceeding under any
Federal or state bankruptcy, insolvency, reorganization, or other similar law) on
54
overdue principal and premium, if any, from time to time on demand at the applicable rate of
interest determined from time to time in the manner provided for in each series of Notes; it shall
pay interest (including post-petition interest in any proceeding under any Federal or state
bankruptcy, insolvency, reorganization, or other similar law) on overdue installments of interest
and (without regard to any applicable grace periods) from time to time on demand at the same rates
to the extent lawful.
SECTION 9.02.
Maintenance of Office or Agency
. So long as any of the Notes remain
outstanding, the Obligor will maintain an office or agency in the City of New York where Notes may
be presented or surrendered for payment, where Notes may be surrendered for transfer or exchange,
and where notices and demands to or upon the Obligor in respect of the Notes and this Indenture may
be served. The Obligor will give prompt written notice to the Trustee of the location, and of any
change in the location, of such office or agency. If at any time the Obligor shall fail to
maintain such office or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office
of the Trustee, and the Obligor hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
The Obligor may also from time to time designate one or more other offices or agencies where
one or more series of Notes may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Obligor of its obligation to maintain an office or
agency in the City of New York for such purposes. The Obligor shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 9.03.
Money for Note Payments to be Held in Trust
. If the Obligor shall at
any time act as its own Paying Agent, it will, on or before each due date of the principal,
premium, if any, or interest on any series of Notes, segregate and hold in trust for the benefit of
the Holders of such series of Notes a sum sufficient to pay such principal, premium or interest so
becoming due until such sums shall be paid to such Holders of the Notes of such series or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Obligor shall have one or more Paying Agents, it will, on or prior to each due
date of the principal, premium, if any, or interest, on any series of Notes, deposit with a Paying
Agent a sum sufficient to pay such principal, premium, or interest so becoming due, such sum to be
held in trust for the benefit of the Holders of the Notes of such series entitled to the same and
(unless such Paying Agent is the Trustee) the Obligor will promptly notify the Trustee of its
action or failure so to act.
The Obligor will cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section 9.03, that such Paying Agent will:
(1) hold all sums held by it for the payment of principal, premium, if any, or
interest, on Notes of any series in trust for the benefit of the Holders of the Notes of
such
55
series entitled thereto until such sums shall be paid to such Holders or otherwise
disposed of as herein provided;
(2) give the Trustee prompt notice of any default by the Obligor (or any other obligor
upon the Notes of such series) in the making of any such payment of principal, premium, if
any, or interest, on such Notes; and
(3) at any time during the continuance of any such default, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Obligor may, at any time, for the purpose of obtaining the discharge of this Indenture or
for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Obligor or such Paying Agent or, if for any other purpose, all sums so
held in trust by the Obligor or such Paying Agent in respect of all series of Notes, such sums to
be held by the Trustee upon the same trusts as those upon which such sums were held by the Obligor
or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
SECTION 9.04.
Certificate to Trustee
.
(1) The Obligor will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Obligor ending after the initial issuance of Notes under this Indenture,
an Officers Certificate that complies with TIA Section 314(a)(4) stating that in the course
of the performance by the signers of their duties as officers of the Obligor, they would
normally have knowledge of any default by the Obligor in the performance of any of its
covenants or agreements contained herein, stating whether or not they have knowledge of any
such default and, if so, specifying each such default of which the signers have knowledge
and the nature thereof.
(2) The Guarantor will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Guarantor ending after the initial issuance of Notes under this
Indenture, an Officers Certificate that complies with TIA Section 314(a)(4) stating that in
the course of the performance by the signers of their duties as officers of the Guarantor,
they would normally have knowledge of any default by the Guarantor in the performance of any
of its covenants or agreements contained herein, stating whether or not they have knowledge
of any such default and, if so, specifying each such default of which the signers have
knowledge and the nature thereof.
SECTION 9.05.
Existence
. Subject to Article VII, (1) the Obligor will do or cause to
be done all things necessary to preserve and keep in full force and effect its limited liability
company existence and (2) the Guarantor will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.
SECTION 9.06.
Limitation on Liens
.
56
(1)
Limitation on Liens with Respect to the Obligor
: So long as any of the
Notes shall be Outstanding, neither the Obligor nor any Restricted Subsidiary of the Obligor
will incur, suffer to exist or guarantee any Debt, secured by a mortgage, pledge or lien (a
Lien
) on any Principal Property (as such term is defined with respect to the
Obligor) or on any shares of stock of (or other interests in) any Restricted Subsidiary of
the Obligor unless the Obligor or such first mentioned Restricted Subsidiary secures or the
Obligor causes such Restricted Subsidiary to secure the Notes (and any other Debt of the
Obligor or such Restricted Subsidiary, at the option of the Obligor or such Restricted
Subsidiary, as the case may be, not subordinate to the Notes), equally and ratably with (or
prior to) such secured Debt, for so long as such secured Debt shall be so secured. This
restriction will not, however, apply to Debt secured by:
(i) Liens existing prior to the initial issuance of Notes hereunder;
(ii) Liens on property of or shares of stock of (or other interests in) any Entity
existing at the time such Entity becomes a Restricted Subsidiary of the Obligor;
(iii) Liens on property of or shares of stock of (or other interests in) any Entity
existing at the time of acquisition thereof (including acquisition through merger or
consolidation);
(iv) Liens securing indebtedness incurred to finance all or any part of the purchase
price of property or the cost of construction of such property (or additions, substantial
repairs, alterations or substantial improvements thereto), provided that such Lien and the
indebtedness secured thereby are incurred within 365 days after the later of (a) acquisition
of such property or the completion of construction (or addition, repair, alteration or
improvement) thereon and (b) the commencement of full operation thereof;
(v) Liens in favor of the Obligor or any of its Restricted Subsidiaries;
(vi) Liens in favor of, or required by contracts with, governmental entities; or
(vii) any extension, renewal, or refunding referred to in any of the preceding clauses
(i) through (vi), provided that in the case of a Lien permitted under clause (i), (ii),
(iii), (iv) or (v), the Debt secured is not increased nor the Lien extended to any
additional assets.
Notwithstanding the foregoing, the Obligor or any of its Restricted Subsidiaries may incur,
suffer to exist or guarantee any Debt secured by a Lien on any Principal Property (as such term is
defined with respect to the Obligor) or on any shares of stock of (or other interests in) any
Restricted Subsidiary of the Obligor if, after giving effect thereto, the aggregate amount of
Exempted Debt does not exceed 15% of Consolidated Net Tangible Assets of the Obligor.
(2)
Limitation on Liens with Respect to the Guarantor
. On and after the
Guarantee Commencement Date (in the event that the Guarantee Commencement Date shall occur)
and so long as any of the Notes shall be Outstanding, neither the Guarantor nor any
Restricted Subsidiary of the Guarantor will incur, suffer to exist or guarantee any Debt,
secured by a Lien on any Principal Property (as such term is defined with respect to
57
the Guarantor) or on any shares of stock of (or other interests in) any Restricted
Subsidiary of the Guarantor unless the Guarantor or such first mentioned Restricted
Subsidiary secures or the Guarantor causes such Restricted Subsidiary to secure the
Guarantee (and any other Debt of the Guarantor or such Restricted Subsidiary, at the option
of the Guarantor or such Restricted Subsidiary, as the case may be, not subordinate to the
Guarantee), equally and ratably with (or prior to) such secured Debt, for so long as such
secured Debt shall be so secured. This restriction will not, however, apply to Debt secured
by:
(i) Liens existing prior to the Guarantee Commencement Date;
(ii) Liens on property of or shares of stock of (or other interests in) any Entity
existing at the time such Entity becomes a Restricted Subsidiary of the Guarantor;
(iii) Liens on property or shares of stock of (or other interests in) any Entity
existing at the time of acquisition thereof (including acquisition through merger or
consolidation) or to secure the payment of all or part of the purchase price thereof or
construction or improvements on such property or to secure any Debt incurred prior to, at
the time of, or within 365 days after the later of the acquisition, the completion of
construction, or the commencement of full operation of such property, or within 365 days
after the acquisition of such shares (or other interests) for the purpose of financing all
or any part of the purchase price of such shares (or other interests);
(iv) Liens in favor of the Guarantor or any of its Restricted Subsidiaries;
(v) Liens in favor of, or required by contracts with, governmental entities; and
(vi) any extension, renewal, or refunding referred to in any of the preceding clauses
(i) through (v).
Notwithstanding the foregoing, the Guarantor or any of its Restricted Subsidiaries may incur,
suffer to exist or guarantee any Debt secured by a Lien on any Principal Property (as such term is
defined with respect to the Guarantor) or on any shares of stock of (or other interests in) any
Restricted Subsidiary of the Guarantor if, after giving effect thereto, the aggregate amount of
such Debt does not exceed 15% of Consolidated Net Tangible Assets of the Guarantor.
The transfer of a Principal Property by the Guarantor to an Unrestricted Subsidiary of the
Guarantor or the change in designation by the Guarantor of a Subsidiary which owns a Principal
Property from Restricted Subsidiary to Unrestricted Subsidiary shall not be restricted.
SECTION 9.07.
Limitation on Sale-Leaseback Transactions
.
(1) The Obligor will not, and will not permit any of its Restricted Subsidiaries to,
sell or transfer, directly or indirectly, except to the Obligor or a Restricted Subsidiary
of the Obligor, any Principal Property (as such term is defined with respect to the Obligor)
as an entirety, or any substantial portion thereof, with the intention of taking
58
back a lease of all or part of such property, except a lease for a period of three
years or less at the end of which it is intended that the use of such property by the lessee
will be discontinued; provided that, notwithstanding the foregoing, the Obligor or any of
its Restricted Subsidiaries may sell a Principal Property (as such term is defined with
respect to the Obligor) and lease it back for a period longer than three years (i) if the
Obligor or such Restricted Subsidiary would be entitled, pursuant to Section 9.06(1), to
create a Lien on the property to be leased securing Debt in an amount equal to the
Attributable Debt with respect to the sale and lease-back transaction without equally and
ratably securing the Outstanding Notes or (ii) if (A) the Obligor promptly informs the
Trustee of such transactions, (B) the net proceeds of such transactions are at least equal
to the fair value (as determined by a Managing Directors Resolution) of such property and
(C) the Obligor causes an amount equal to the net proceeds of the sale to be applied either
(x) to the retirement (whether by redemption, cancellation after open-market purchases, or
otherwise), within 365 days after receipt of such proceeds, of Funded Debt having an
outstanding principal amount equal to such net proceeds or (y) to the purchase or
acquisition (or in the case of property, the construction) of property or assets used in the
business of the Obligor or any Restricted Subsidiary, within 365 days after receipt of such
proceeds.
(2) Notwithstanding Section 9.07(1), the Obligor or any Restricted Subsidiary of the
Obligor may enter into sale and lease-back transactions in addition to those permitted by
Section 9.07(1), and without any obligation to retire any outstanding Funded Debt or to
purchase property or assets, provided that at the time of entering into such sale and
lease-back transactions and after giving effect thereto, Exempted Debt does not exceed 15%
of Consolidated Net Tangible Assets of the Obligor.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01.
Election to Redeem; Notice to Trustee
. If the Obligor elects to redeem
any series of Notes pursuant to the optional redemption provisions of Section 10.07 or any other
optional redemption provision provided for with respect to such series of Notes, it shall furnish
to the Trustee, at least 45 days but not more than 60 days
before the Redemption Date, an Officers
Certificate setting forth (1) the Redemption Date, and (2) the CUSIP and/or ISIN numbers of the
series of Notes to be redeemed.
SECTION 10.02.
Selection by Trustee of the Notes to Be Redeemed
. If fewer than all
the Notes of any series are to be redeemed, the particular Notes of such series to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the
Outstanding Notes of such series not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate. The portions of the principal of Notes of such series so
selected for partial redemption shall be equal to $2,000, or an integral multiple of $1,000 in
excess thereof, and the principal amount which remains Outstanding shall not be less than $2,000.
59
The Trustee shall promptly notify the Obligor in writing of the Notes selected for redemption
and, in the case of any Notes selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Notes shall relate, in the case of any Note redeemed or to be
redeemed only in part, to the portion of the principal of such Note which has been or is to be
redeemed.
SECTION 10.03.
Notice of Redemption
.
(1) Notice of redemption to the Holders of Notes to be redeemed as a whole or in part
at the option of the Obligor shall be given by first-class mail, postage prepaid, mailed not
fewer than 30 nor more than 60 days prior to the Redemption Date, to each such Holder at
such Holders last address appearing in the Security Register.
(2) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price, or if not then ascertainable, the manner of calculating the
Redemption Price;
(iii) if fewer than all Outstanding Notes of any series are to be redeemed, the
identification (and, in the case of partial redemption, the respective principal amounts) of
the Notes of such series to be redeemed from the Holder to whom the notice is given and that
on and after the Redemption Date, upon surrender of such Note, a new Note or Notes of such
series in the aggregate principal amount equal to the unredeemed portion thereof will be
issued in accordance with Section 10.06;
(iv) that on the Redemption Date the Redemption Price will become due and payable upon
each Note of such series called for redemption, and that interest, if any, thereon shall
cease to accrue from and after said date;
(v) the place where Notes of such series called for redemption are to be surrendered
for payment of the Redemption Price, which shall be the office or agency maintained by the
Obligor pursuant to Section 9.02;
(vi) the name and address of the Paying Agent;
(vii) that the Notes called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price; and
(viii) the CUSIP and/or ISIN number, and that no representation is made as to the
correctness or accuracy of the CUSIP and/or ISIN number, if any, listed in such notice or
printed on the series of Notes.
60
(3) Notice of redemption of Notes shall be given by the Obligor or, at the Obligors
request, delivered at least 10 days prior to the date such notice is to be given to the
Holders (unless a shorter period shall be acceptable to the Trustee), by the Trustee in the
name and at the expense of the Obligor.
SECTION 10.04.
Deposit of Redemption Price
. On or prior to 10 a.m., New York City
time, on any Redemption Date, the Obligor shall deposit with the Trustee or with a Paying Agent
(or, if the Obligor is acting as its own Paying Agent, segregate and hold in trust as provided in
Section 9.03) an amount of money sufficient to pay the Redemption Price of all the Notes of such
series which are to be redeemed on that date.
SECTION 10.05.
Notes Payable on Redemption Date
.
(1) Notice of redemption having been given as aforesaid, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price therein
specified and from and after such date (unless the Obligor shall default in the payment of
the Redemption Price) such Notes shall cease to bear interest. Upon surrender of such Notes
for redemption in accordance with the notice, such Notes shall be paid by the Obligor at the
Redemption Price. Any installment of interest due and payable on or prior to the Redemption
Date shall be payable to the Holders of such Notes registered as such on the relevant Record
Date according to the terms and the provisions of Section 2.06.
(2) If any Note called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid, bear interest from the Redemption Date at the
rate prescribed therefor by the Note.
SECTION 10.06.
Notes Redeemed in Part
. Any Note that is to be redeemed only in part
shall be surrendered at the office or agency maintained by the Obligor pursuant to Section 9.02
(with, if the Obligor or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Obligor and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing) and the Obligor shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge and at the expense of
the Obligor, a new Note or Notes of the same series, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of
the principal of such Note so surrendered.
SECTION 10.07.
Optional Redemption
. The Notes of any series will be redeemable at any
time in whole or from time to time in part at the option of the Obligor, regardless of whether the
Notes of any other series are to be redeemed, at the Redemption Price equal to the greater of:
(1) 100% of the principal amount of the Notes being redeemed, or
(2) as determined by an Independent Investment Banker, the sum of the present values of
the remaining scheduled payments of principal and interest on the Notes being redeemed (not
including any portion of such payments of interest on the Notes accrued to the Redemption
Date) from the Redemption Date to the Maturity Date
61
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at a discount rate equal to the Treasury Rate plus the
number of basis points, if any, provided for with respect to such series of Notes being
redeemed; plus, for (1) or (2) above, whichever is applicable, accrued and unpaid interest
on the Notes to be redeemed to, but not including, the Redemption Date. The Treasury Rate
shall be calculated on the third Business Day preceding the Redemption Date and notice
thereof shall promptly be given by the Obligor to the Trustee.
Any redemption pursuant to this Section 10.07 shall be made pursuant to the provisions of
Section 10.01 through 10.06.
Notwithstanding anything in this Section 10.07 to the contrary, the Obligor may provide
pursuant to Section 2.01(1)(v)(j) for optional redemption provisions with respect to a series of
Notes in addition to, or in substitution of, the provision contained in this Section 10.07 and may
provide with respect to a series of Notes for an optional redemption provision identical to the
provision contained in this Section 10.07 but providing for different definitions of the terms
Comparable Treasury Issue, Comparable Treasury Price, Reference Treasury Dealer, Reference
Treasury Dealer Quotations and Treasury Rate.
SECTION 10.08.
Mandatory Redemption
. Unless otherwise provided pursuant to Section
2.01(1)(v)(j), the Obligor shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes of any series.
SECTION 10.09.
Guarantors Consent
. Notwithstanding any other provision of this
Indenture, the Obligor may not redeem any Note without the prior written consent of the Guarantor.
ARTICLE XI
GUARANTEE
SECTION 11.01.
Guarantee
.
(1)
Provisions Relating to a Full Guarantee
.
(a) Subject to the provisions of this Article XI, in the event that:
(A) the Obligor has deposited irrevocably with the 2009 Notes Trustee, prior to the
2009 Notes Payment Deposit Date, sufficient cash in immediately available funds to pay in
full the principal of and interest and premium, if any, that will become due and payable on
the 2009 Notes on the 2009 Notes Payment Date; or
(B) (x) the Obligor has not deposited irrevocably with the 2009 Notes Trustee, prior to
the 2009 Notes Payment Deposit Date, sufficient cash in immediately available funds to pay
in full the principal of and interest and premium, if any, that will become due and payable
on the 2009 Notes on the 2009 Notes Payment Date and (y) the Guarantor has not delivered to
the Obligor and the Trustee an Officers Certificate by 5:00 p.m., New York City time, on
the 2009 Notes Payment Deposit Date, stating that the
62
Guarantor has determined in good faith that the Guarantor is likely to have to pay some
or all of the principal amount of the 2009 Notes (and the interest and premium, if any, with
respect thereto) due and payable on the 2009 Notes Payment Date under the 2009 Notes
Guarantee; then,
beginning on the Guarantee Commencement Date, the Guarantor unconditionally and irrevocably
guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, that: (a) the principal of, premium, if any, and
interest on the Notes will be duly and punctually paid in full when due, whether at stated
maturity, by acceleration, redemption or otherwise, together with interest on overdue
principal, and premium, if any, and (to the extent permitted by law) interest on any
interest, if any, on the Notes and all other monetary obligations of the Obligor to the
Holders hereunder or under the Notes will be promptly paid in full, all in accordance with
the terms hereof; and (b) in case of any extension of time of payment or renewal of any of
the Notes or any of such other monetary obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration, redemption or otherwise.
(b) In the event of the foregoing, on or promptly after the 2009 Notes Payment Deposit
Date, the Guarantor shall notify the Trustee of the Guarantee Commencement Date and of the
Guarantors full Guarantee.
(2)
Provisions Relating to a Partial Guarantee
.
(a) Subject to the provisions of this Article XI, in the event that:
(A) the Obligor has not deposited irrevocably with the 2009 Notes Trustee, prior to the
2009 Notes Payment Deposit Date, sufficient cash in immediately available funds to pay in
full the principal of and interest and premium, if any, that will become due and payable on
the 2009 Notes on the 2009 Notes Payment Date; and
(B) the Guarantor has delivered to the Obligor and the Trustee an Officers Certificate
by 5:00 p.m., New York City time, on the 2009 Notes Payment Deposit Date, stating that the
Guarantor has determined in good faith that the Guarantor is likely to have to pay some but
not all of the principal amount of the 2009 Notes (and the interest and premium, if any,
with respect thereto) due and payable on the 2009 Notes Payment Date under the 2009 Notes
Guarantee (the
Partial Payment Notice
); then,
beginning on the Guarantee Commencement Date, the Guarantor unconditionally and irrevocably
guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, that (x) the Partial Guarantee Percentage of each of
the principal of, premium, if any, and interest on the Notes will be duly and punctually
paid in full when due, whether at stated maturity, by acceleration, redemption or otherwise,
together with interest on the Partial Guarantee Percentage of such overdue principal, and
premium, if any, and (to the extent permitted by law) interest, if any, on the Notes and the
Partial Guarantee Percentage of all other monetary
63
obligations of the Obligor to the Holders hereunder or under the Notes, all in accordance
with the terms hereof; and (y) in case of any extension of time of payment or renewal of any
of the Notes or any of such other monetary obligations, the amount set forth in clause (x)
above will be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration, redemption or
otherwise.
(b) In the event of the foregoing, on or promptly after the 2009 Notes Payment Deposit
Date, the Guarantor shall notify the Trustee as to the Guarantee Commencement Date, of the
Guarantors partial Guarantee and of the Partial Guarantee Percentage.
(c) In the event that (a) the Obligor defaults in the payment of principal of and
interest and premium, if any, on the Outstanding Notes upon the Maturity Date, the
Redemption Date or by acceleration or otherwise, in each case, on and after the Guarantee
Commencement Date (in the event that the Guarantee Commencement Date shall occur), and (b)
the Guarantor makes the payment of the Partial Guarantee Percentage of each of the principal
of and interest and premium, if any, on the Outstanding Notes under the Guarantors partial
Guarantee, a replacement Note in the principal amount equal to the principal of the Note
that was not paid or redeemed will be issued in the name of the Holder of the Note upon
cancellation of the original Note, and upon request of the Obligor, the Trustee shall
authenticate and deliver such replacement Note. Any such replacement Note shall not have an
executed Guarantee endorsed thereon and shall accrue interest from the most recent date to
which interest has been paid or duly provided for or, if no interest has been paid, from the
Issue Date. The issuance of such replacement Note shall be deemed to be a replacement of
the cancelled Note and not the incurrence of new or additional indebtedness under this
Indenture.
(3)
Provisions Relating to the Absence of a Guarantee
:
(a) In the event that:
(A) prior to the Scheduled Guarantee Commencement Date, there occurs an Event of
Default or any default or other event which, with the giving of notice or passage of time,
would constitute an Event of Default under this Indenture or the Notes; or
(B) (x) the Obligor has not deposited irrevocably with the 2009 Notes Trustee, prior to
the 2009 Notes Payment Deposit Date, sufficient cash in immediately available funds to pay
in full the principal of and interest and premium, if any, that will become due and payable
on the 2009 Notes on the 2009 Notes Payment Date and (y) the Guarantor has delivered to the
Obligor and the Trustee an Officers Certificate by 5:00 p.m., New York City time, on the
2009 Notes Payment Deposit Date, stating that the Guarantor has determined in good faith
that the Guarantor is likely to have to pay all of the principal amount of the 2009 Notes
(and the interest and premium, if any, with respect thereto) due and payable on the 2009
Notes Payment Date under the 2009 Notes Guarantee; then
64
the Guarantee shall not become effective, the Guarantee Commencement Date shall not occur,
and the Guarantor shall not have any obligations under the Guarantee,
the Notes or this Indenture.
(b) Promptly upon the occurrence of any event described in clause (A) or (B) of Section
11.01(3)(a) of which an Officer of the Guarantor has actual knowledge, the Guarantor shall notify the Trustee that the Guarantee shall not become
effective and that the Guarantee Commencement Date shall not occur.
(4) In accordance with the terms of this Article XI and the Guarantee, failing payment
when due of any amount so guaranteed, or failing performance of any other monetary
obligation of the Obligor to the Holders, for whatever reason, the Guarantor will be
obligated to pay, or to perform or to cause the performance of, such amount so guaranteed
immediately. An Event of Default under this Indenture or the Notes shall constitute an
event of default under the Guarantee, and shall entitle the Holders of the Notes to
accelerate the obligations of the Guarantor under the Guarantee in the same manner and to
the same extent as the obligations of the Obligor.
(5) In accordance with the terms of this Article XI and the Guarantee, the Guarantor
hereby agrees that its obligations under the Guarantee shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any thereof, the entry of any judgment against the Obligor, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Guarantor. The Guarantor hereby waives and relinquishes: (i)
any right to require the Trustee, the Holders or the Obligor (each, a
Benefitted
Party
) to proceed against the Obligor or any other Person or to proceed against or
exhaust any security held by a Benefitted Party at any time or to pursue any other remedy in
any secured partys power before proceeding against the Guarantor; (ii) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any other
Person or Persons or the failure of a Benefitted Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any other Person or
Persons; (iii) demand, protest and notice of any kind (except as expressly required by this
Indenture), including but not limited to notice of any action or non-action on the part of
the Guarantor, the Obligor, any Benefitted Party, any creditor of the Guarantor, the Obligor
or on the part of any other Person whomsoever in connection with any obligations the
performance of which are guaranteed under the Guarantee; (iv) any defense based upon an
election of remedies by a Benefitted Party, including but not limited to an election to
proceed against the Guarantor for reimbursement; (v) any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; and (vi) any defense based
on any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code.
The Guarantor hereby covenants that the Guarantee will not be discharged except (a) in the
event the Guarantee Commencement Date shall occur, (x) by payment in full of all principal,
premium, if any, and interest on the Notes and all other monetary obligations to the Holders
to the extent provided for under this Indenture by the Obligor or (y) by payment in full of
all of or the Partial Guarantee Percentage of (as the case may be) the principal, premium,
if any, and
65
interest on the Notes and all other monetary obligations to the Holders to the extent
provided for under this Indenture by the Guarantor, (b) before the Scheduled Guarantee
Commencement Date, by the payment in full of all of the principal, premium, if any, and
interest on the Notes and all other monetary obligations to the Holders to the extent
provided for under this Indenture, (c) upon the occurrence of any event described in clause
(a) of Section 11.01(3), (d) upon satisfaction and discharge of this Indenture in accordance
with Section 3.01 or (e) upon the occurrence of Legal Defeasance in accordance with Section
3.02(a). This is a Guarantee of payment and not of collectibility.
(6) If any Holder or the Trustee is required by any court or otherwise to return to
either the Obligor or the Guarantor, or any trustee or similar official acting in relation
to either the Obligor or the Guarantor, any amount paid by the Obligor or the Guarantor to
the Trustee or such Holder, the Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Guarantor agrees that, as between it, on the one
hand, and the Holders of the Notes and the Trustee, on the other hand, (i) the maturity of
the obligations guaranteed under the Guarantee may be accelerated as provided in Article IV
for the purposes hereof, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby, and (ii) in
the event of any acceleration of such obligations as provided in Article IV, such
obligations so guaranteed under the Guarantee (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purpose of the Guarantee.
SECTION 11.02.
Execution and Delivery of the Guarantee
.
(1) To evidence the Guarantee set forth in Section 11.01, the Guarantor agrees that a
notation of the Guarantee substantially in the form included in Exhibit A hereto shall be
endorsed on each Note authenticated and delivered by the Trustee (except as otherwise
provided in Sections 2.01(1) and 11.01(2)(c)) and executed on behalf of the Guarantor by one
of the Officers of the Guarantor by manual or facsimile signature. The Guarantor agrees
that the Guarantee set forth in this Article XI will remain in full force and effect and
apply to all the Notes, notwithstanding any failure to endorse on each Note a notation of
the Guarantee (except as otherwise provided in Section 11.01(2)(c)).
(2) If an Officer of the Guarantor whose manual or facsimile signature is on a
Guarantee no longer holds that office at the time the Trustee authenticates the Note on
which the Guarantee is endorsed, the Guarantee shall be valid nevertheless.
(3) The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantee endorsed on such Note on behalf of
the Guarantor.
SECTION 11.03.
Limitation of the Guarantors Liability
.
The Guarantor, and by its acceptance hereof, each Holder, hereby confirms that it is the
intention of both parties that the Guarantee not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
66
Uniform Fraudulent Transfer Act or any similar Federal or State law. To effectuate the
foregoing intention, the Holders and the Guarantor hereby irrevocably agree that the obligations of
the Guarantor under this Article XI shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of the Guarantor, result in the obligations of
the Guarantor under the Guarantee not constituting a fraudulent transfer or conveyance under
federal or state law.
SECTION 11.04.
Subrogation
.
Upon making any payment with respect to any obligation of the Obligor under this Article, the
Indenture or the Notes, the Guarantor will be subrogated to the rights of the payee against the
Obligor with respect to such obligation,
provided
that the Guarantor may not enforce any right of
subrogation with respect to such payment so long as any amount payable by the Obligor hereunder or
under the Notes remains unpaid.
SECTION 11.05.
Notice to Guarantor
.
(1) The Obligor shall use reasonable best efforts to give written notice to the Guarantor, no
earlier than 15 and no later than five Business Days prior to the 2009 Notes Payment Deposit Date,
indicating its intention (or, if applicable, stating its lack of such an intention) to deposit
irrevocably with the 2009 Notes Trustee, prior to the 2009 Notes Payment Deposit Date, sufficient
cash in immediately available funds to pay in full the principal of and interest and premium, if
any, that will become due and payable on the 2009 Notes on the 2009 Notes Payment Date; and such
notice shall specify the amount of cash to be irrevocably deposited for such purpose with the 2009
Notes Trustee.
(2) The Obligor shall promptly notify the Guarantor of any failure of the Obligor to comply
with any of its payment obligations under this Indenture.
(3) The Trustee shall promptly notify the Guarantor of any failure of the Obligor to comply
with its obligations under Section 9.01.
67
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.
|
|
|
|
|
|
BOTTLING GROUP, LLC,
as Obligor
|
|
|
By:
|
/s/
Brian Newman
|
|
|
|
Name:
|
Brian Newman
|
|
|
|
Title:
|
Managing Director-Delegatee
|
|
|
|
PEPSICO, INC.,
as Guarantor
|
|
|
By:
|
/s/
Lionel L. Nowell III
|
|
|
|
Name:
|
Lionel L. Nowell III
|
|
|
|
Title:
|
Senior Vice President and Treasurer
|
|
|
|
THE BANK OF NEW YORK MELLON,
as Trustee
|
|
|
By:
|
/s/
Francine Kincaid
|
|
|
|
Name:
|
Francine Kincaid
|
|
|
|
Title:
|
Vice President
|
|
|
68
EXHIBIT A
GUARANTEE
PepsiCo, Inc., a North Carolina corporation (hereinafter referred to as the
Guarantor
), which term includes any successor or assign under the Indenture, dated as of
October 24, 2008 (the Indenture), among Bottling Group, LLC, a Delaware limited liability company or any successor
thereto (the
Obligor
), the Guarantor and The Bank of New York Mellon, as trustee (the
Trustee
), hereby irrevocably and unconditionally guarantees to the Holders of the Notes
and the Trustee that: (i) (A) in the event of a full guarantee as described in Section 11.01(1) of
the Indenture, the principal of, premium, if any, and interest on the Notes will be duly and
punctually paid in full when due, whether at stated maturity, by acceleration, redemption or
otherwise, together with interest on overdue principal, and premium, if any, and (to the extent
permitted by law) interest on any interest, if any, on the Notes and all other monetary obligations
of the Obligor to the Holders under the Indenture or the Notes will be promptly paid in full, all
in accordance with the terms hereof or (B) in the event of a partial guarantee as described in
Section 11.01(2) of the Indenture, the Partial Guarantee Percentage of the principal of, premium,
if any, and interest on the Notes will be duly and punctually paid in full when due, whether at
stated maturity, by acceleration, redemption or otherwise, together with interest on the Partial
Guarantee Percentage of such overdue principal, and premium, if any, and (to the extent permitted
by law) interest, if any, on the Notes and the Partial Guarantee Percentage of all other monetary
obligations of the Obligor to the Holders under the Indenture or the Notes, all in accordance with
the terms hereof; and (ii) in case of any extension of time of payment or renewal of any of the
Notes or any of such other monetary obligations, the amount set forth in clause (A) or (B) above,
whichever is applicable, will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration, redemption or
otherwise.
The obligations of the Guarantor to the Holders and to the Trustee pursuant to this Guarantee
and the Indenture are expressly set forth in Article XI of the Indenture and reference is hereby
made to such Indenture for the precise terms of this Guarantee.
No stockholder, officer, director or incorporator, as such, past, present or future of the
Guarantor shall have any liability under this Guarantee by reason of his, her or its status as such
stockholder, officer, director or incorporator.
This
is a continuing Guarantee and such Guarantee shall remain in full force and effect from and including
the Guarantee Commencement Date (in the event that the Guarantee Commencement Date shall occur) and
shall, in accordance with the terms of the Guarantee and the Indenture, be binding upon the
Guarantor and its successors and assigns until (a) full and final payment and performance of all
other monetary obligations of the Obligor to the Holders under the Indenture or the Notes or (b)
full and final payment by the Guarantor of the same to the extent specified in clause (i)(A) or
(i)(B) above, and shall inure to the benefit of the successors and assigns of the Trustee and the
Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall automatically
A-1
extend to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. This is a Guarantee of payment and not of collectibility.
This Guarantee shall not be valid or obligatory for any purpose until the certificate of
authentication on the Note upon which this Guarantee is endorsed shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers.
ANYTHING
TO THE CONTRARY HEREIN NOTWITHSTANDING, THIS GUARANTEE SHALL NOT
BECOME EFFECTIVE AND SHALL NOT BIND THE GUARANTOR UNLESS AND UNTIL
THE GUARANTEE COMMENCEMENT DATE SHALL OCCUR. IF THE GUARANTEE COMMENCEMENT DATE SHALL NOT OCCUR, THIS GUARANTEE SHALL NOT BECOME EFFECTIVE,
AND THE GUARANTOR SHALL NOT HAVE ANY OBLIGATIONS UNDER THIS
GUARANTEE, THE NOTES OR THE INDENTURE.
THE TERMS OF ARTICLE XI OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.
A-2
Capitalized terms used herein have the same meanings given in the Indenture unless otherwise
indicated.
Dated:
|
|
|
|
|
|
PEPSICO, INC.
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
A-3