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.

     The Underwritten Securities and the offering thereof shall have the following additional terms:

Terms of the Underwritten Securities and the Offering

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

     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.

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 Moody’s Investors Service, Inc and A+ (Stable) by Standard & Poor’s 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

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 Moody’s and Standard & Poor’s. 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 Company’s 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 Company’s 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 Company’s securities, including the Underwritten Securities, by either Moody’s Investors Service, Inc. or Standard & Poor’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 party’s 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
Att’n: 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 arm’s-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 COMPANY’S 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

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 Company’s 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 COMPANY’S 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

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 Company’s 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 COMPANY’S 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 counsel’s 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 counsel’s 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 counsel’s 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 COMPANY’S 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

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 Company’s special North Carolina counsel, we have reviewed the Company’s 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 SECRETARY’S 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 Company’s 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 Company’s 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.

     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___.

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 Company’s 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:

     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.

     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,

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,

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 Company’s and the Guarantor’s 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

reference therein, shall be deemed to refer to, apply to, cover or include the Guarantor’s 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 Guarantor’s 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 Guarantor’s 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

and in conformity with (i) the Guarantor’s 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

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 Guarantor’s 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 ”).

     (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

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 holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

     (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 Company’s 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

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

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 Company’s 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 management’s 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 management’s 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.

     (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 Treasury’s 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

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 Company’s 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 Company’s 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.

     (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 Company’s 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 Company’s 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.

     (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) Guarantor’s 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 ”).

     (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 Guarantor’s 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 Guarantor’s last periodic report filed with the Commission under the Exchange Act and

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 Guarantor’s 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.

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

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 Underwriter’s 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

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

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 Company’s 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

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 Guarantor’s 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

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 Company’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records of the Company and its subsidiaries and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

All of the Company’s financial statements and schedules included in material incorporated by reference into the Company Registration Statement, the Company

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

(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 Guarantor’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records of the 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 Guarantor’s 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

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 Moody’s Investors Service (“Moody’s”) or Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies (“S&P”), or any public announcement that Moody’s 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,

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 counsel’s 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.

(x) To such counsel’s 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 counsel’s 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 counsel’s 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 counsel’s 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

that such counsel has not been called to pass upon, and expresses no view regarding the Guarantor’s 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 counsel’s knowledge, free and clear of all liens, encumbrances, equities, or claims.

(iii) The Company is not (A) in violation of its certificate of formation or limited liability company agreement or (B) in default in the performance or observance of any agreement 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 counsel’s knowledge

after due inquiry, of any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any of its subsidiaries.

(v) No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by 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 counsel’s knowledge after due inquiry, contemplated, no statute or regulation, and no agreement, instrument or other document to which, in any case, the Company is a party, or by which, in any case, any of the properties of the Company is bound, that is required to be described in the 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

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 counsel’s 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 counsel’s 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.

(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 counsel’s 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 counsel’s 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 counsel’s 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 counsel’s 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

          (ii) nothing has come to counsel’s 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 Company’s 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 counsel’s 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.

     (ii) To counsel’s 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 counsel’s 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;

(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 Guarantor’s 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

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 Guarantor’s Information consists only of the information set forth on Schedule A hereto (such information is referred to herein as the “ Guarantor’s 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 Company’s 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 Company’s Information consists only of the information set forth on Schedule B hereto (such information is referred to herein as the “ Company’s 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

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

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.

     (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),

(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

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.

Schedule A

Guarantor’s Information

1.		The information in the Guarantor Statutory Prospectus (and corresponding information in the Guarantor Prospectus) identified as Guarantor’s 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) Company’s 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 Guarantor’s 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 Guarantor’s Information.

Schedule B

Company’s Information

1.		The information in the Company Statutory Prospectus (and the corresponding information in the Company Prospectus) identified as Company’s 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) Guarantor’s 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 Company’s 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 Company’s Information.

EXHIBIT B

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.