Document:

EX-10.1

 

EXHIBIT 10.1

April 27, 2007

Ms. Robin Marino

[Address]

Re:     Modification of employment arrangement and grant of restricted stock.

Dear Robin:

In recognition of your ongoing efforts and accomplishments in connection with strategically
diversifying the merchandising business, the Compensation Committee of the Board of Directors of
Martha Stewart Living Omnimedia, Inc. (the “Company”) has approved a second modification (this
“Second Modification”) to your original employment letter, which was filed with the Securities and
Exchange Commission as an exhibit to the Company’s Current Report on Form 8-K dated June 10, 2005
(the “Original Agreement”), as modified by a letter dated October 24, 2006, which letter was filed
with the Securities and Exchange Commission as an exhibit to the Company’s Current Report on Form
8-K dated October 25, 2006.

Pursuant to this Second Modification, the Company has agreed to amend Section 5 of the Original
Agreement, raising your target bonus from 70% to 80% of your base salary.

In addition, the Compensation Committee has approved a one-time grant of 20,000 shares of
restricted stock to you pursuant to the Company’s 1999 Stock Incentive Plan (the “Plan”) , which
shares will vest ratably over three years on the terms set forth in your stock grant agreement and
the Plan.

Please indicate your acceptance of and agreement to the terms and conditions herein by signing and
returning the enclosed copy of this letter.

 

Very truly yours,

/s/  Howard Hochhauser

Howard Hochhauser

Chief Financial Officer

Agreed to and Accepted:

 

/s/  Robin Marino
            

Robin MarinoEX-10.1

 

Exhibit 10.1

EXECUTION VERSION

 

 

PRIVATE LIMITED COMPANY AGREEMENT

OF

PR BEVERAGES LIMITED

MARCH 1, 2007

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 

	 	ARTICLE I	 	 	 	 
	 

	 	DEFINITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.01

	 	Defined Terms
	 	 	2	 
	Section 1.02

	 	Interpretation
	 	 	9	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II	 	 	 	 
	 

	 	FORMATION OF THE COMPANY	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.01

	 	Formation
	 	 	9	 
	Section 2.02

	 	Registered Office
	 	 	10	 
	Section 2.03

	 	Name
	 	 	10	 
	Section 2.04

	 	Purpose and Character of Business
	 	 	10	 
	Section 2.05

	 	Duration
	 	 	10	 
	Section 2.06

	 	Filings, Reports and Formalities
	 	 	10	 
	Section 2.07

	 	Closing
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III	 	 	 	 
	 

	 	CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.01

	 	Share Capital Accounts/Subscription to Shares
	 	 	11	 
	Section 3.02

	 	Capital Contribution by PBG Ireland
	 	 	12	 
	Section 3.03

	 	Obligation of PepsiCo Ireland
	 	 	12	 
	Section 3.04

	 	Return of Contributions
	 	 	12	 
	Section 3.05

	 	Additional Issuance of Shares; Additional Classes of Shares
	 	 	12	 
	Section 3.06

	 	Liability of Members; Ability to Bind the Company
	 	 	13	 
	Section 3.07

	 	Establishment of Capital Accounts
	 	 	13	 
	Section 3.08

	 	Maintenance of Capital Accounts
	 	 	13	 
	Section 3.09

	 	Revaluation of Capital Accounts
	 	 	14	 

ii 

 

	 	 	 	 	 	 	 
	 

	 	ARTICLE IV	 	 	 	 
	 

	 	PROFITS AND LOSSES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.01

	 	Determination of Profits and Losses
	 	 	15	 
	Section 4.02

	 	Allocations
	 	 	15	 
	Section 4.03

	 	Allocations for US Federal Income Tax Purposes
	 	 	17	 
	Section 4.04

	 	Partial Year Allocations
	 	 	17	 
	Section 4.05

	 	Adjustment of Allocations
	 	 	17	 
	Section 4.06

	 	Excess Nonrecourse Liabilities
	 	 	17	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE V	 	 	 	 
	 

	 	DISTRIBUTIONS; WITHHOLDING	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.01

	 	Distributions to the Members
	 	 	18	 
	Section 5.02

	 	Withholding
	 	 	19	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VI	 	 	 	 
	 

	 	BOARD OF DIRECTORS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01

	 	Number of Directors
	 	 	19	 
	Section 6.02

	 	Board Composition / Term
	 	 	20	 
	Section 6.03

	 	Chairman
	 	 	20	 
	Section 6.04

	 	Meetings
	 	 	20	 
	Section 6.05

	 	Duties
	 	 	20	 
	Section 6.06

	 	Procedures Following Board Deadlock or Deadlock of Members under Section 6.05
	 	 	23	 

iii 

 

	 	 	 	 	 	 	 
	 

	 	ARTICLE VII	 	 	 	 
	 

	 	GOVERNANCE OF COMPANY AND BUSINESS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01

	 	Governance Principles
	 	 	24	 
	Section 7.02

	 	Management Team
	 	 	25	 
	Section 7.03

	 	Business Reviews
	 	 	26	 
	Section 7.04

	 	Conflicts
	 	 	27	 
	Section 7.05

	 	Authorized Signatories / Related Party Agreements
	 	 	27	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VIII	 	 	 	 
	 

	 	RECORDS, ACCOUNTING MATTERS, TAX MATTERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.01

	 	Maintenance & Review of Records and Financial Controls
	 	 	28	 
	Section 8.02

	 	Audit / Preparation of Financial Reports
	 	 	28	 
	Section 8.03

	 	Accounting Method
	 	 	29	 
	Section 8.04

	 	Tax Matters
	 	 	29	 
	Section 8.05

	 	Confidentiality
	 	 	32	 
	Section 8.06

	 	Services Agreement
	 	 	33	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IX	 	 	 	 
	 

	 	RESTRICTIONS ON TRANSFER	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.01

	 	Restrictions on Transfers
	 	 	33	 
	Section 9.02

	 	Transfers to Affiliates
	 	 	33	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE X	 	 	 	 
	 

	 	DISSOLUTION AND TERMINATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.01

	 	Events of Dissolution
	 	 	34	 
	Section 10.02

	 	Dissolution Process
	 	 	34	 

iv 

 

	 	 	 	 	 	 	 
	 

	 	ARTICLE XI	 	 	 	 
	 

	 	REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.01

	 	Representations and Warranties of Members
	 	 	37	 
	Section 11.02

	 	Representations and Warranties of PBG Ireland
	 	 	38	 
	Section 11.03

	 	Non-Competition Covenants
	 	 	39	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE XII	 	 	 	 
	 

	 	MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.01

	 	Partial Invalidity
	 	 	40	 
	Section 12.02

	 	Notices
	 	 	40	 
	Section 12.03

	 	Amendment
	 	 	41	 
	Section 12.04

	 	Consents; Waivers
	 	 	41	 
	Section 12.05

	 	Choice of Law and Forum
	 	 	41	 
	Section 12.06

	 	Multiple Counterparts
	 	 	41	 
	Section 12.07

	 	Entire Agreement
	 	 	41	 
	Section 12.08

	 	Binding Effect; Assignment
	 	 	42	 
	Section 12.09

	 	No Third-Party Beneficiaries
	 	 	42	 
	Section 12.10

	 	Expenses
	 	 	42	 
	Section 12.11

	 	Press Releases
	 	 	42	 

v 

 

SCHEDULE A  —  Percentage Interests

SCHEDULE B —  Initial Board of Directors

 

EXHIBIT A  —  PBG Ireland Contribution Agreement

EXHIBIT B1 and B2  —  The Notes

EXHIBIT C  —  Concentrate Sub-License

EXHIBIT D  —  Contract Manufacturing Agreement

EXHIBIT E1 and E2  —  Services Agreements

EXHIBIT F1, F2, F3 and F4  —  International Master Bottling Agreements

EXHIBIT G1 and G2 – Belarus Temporary Distribution Authorizations

vi 

 

PRIVATE LIMITED COMPANY AGREEMENT

of

PR BEVERAGES LIMITED

 
 

     This Private Limited Company Agreement (the “Agreement”) is concluded this 1st day of
March 2007 between PBG Beverages Ireland Limited (“PBG Ireland”) and PepsiCo (Ireland), Limited
(“PepsiCo Ireland”) (each a “Member” and, collectively, the “Members”) and PR
Beverages Limited (“the Company”).

PRELIMINARY STATEMENT

     WHEREAS, PepsiCo and its Affiliates have licensed (i) PBG to make, sell and deliver within the
Russian Federation certain beverages under PepsiCo’s trademarks and (ii) PBG Affiliates to sell and
deliver within the Russian Federation snack foods under their trademarks;

     WHEREAS, PBG Ireland and PepsiCo Ireland desire to establish a joint venture for the purposes
set out in this Agreement;

     WHEREAS, the Company has been incorporated in accordance with the laws of the Republic of
Ireland;

     WHEREAS the Members intend hereby to participate in the Company in accordance with this
Agreement and the Companies Acts, 
1963 – 2006 of the Republic of Ireland as amended from time to
time (the “Acts”);

     WHEREAS, the Members desire to enter into this Agreement and to cause the Company to become a
party into all those other agreements and instruments annexed hereto and incorporated herein; and

1

 

     WHEREAS, the Members desire to provide for the operation and management of the Company for the
purposes and in accordance with the provisions stated herein;

     NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements contained
herein, the parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

     Section 1.01 Defined Terms. As used in this Agreement and unless the context
otherwise requires, the following terms shall have the respective meanings set forth below:

     “Acts” have the meaning set forth in the fourth Whereas clause of this Agreement.

     “Adjusted Capital Account Deficit” means, for U.S. income tax purposes as determined
with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the
end of the relevant Fiscal Year, after giving effect to the following adjustments:

          (i) credit to such Capital Account any amounts that such Member is deemed obligated to
restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and
1.704-2(i)(5); and

          (ii) debit to such Capital Account the items described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

     The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Affiliate” means, with respect to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is under common
Control with, such Person.

     “Agreement” has the meaning set forth in the introductory paragraph hereof.

2

 

     “Annual Operating Plan” or “AOP” means the operating plan for the Business for
the first Year of the Strategic Plan. Such plan shall set forth in reasonable detail satisfactory
to each Member, the advertising and marketing plans (including key marketing initiatives,
brand/package strategies, channel strategies, pricing and CDA strategies), management plans
(including training programs and operational and human resources initiatives), and restructuring
plans, if any, of the Company with respect to the Business. The Annual Operating Plan shall also
include a financial plan setting forth the projected profit and loss accounts, cash flows and
balance sheet items (including capitalization plans, capital expenditures, debt levels and methods
of financing the operations of the Company) of the Company for such Year.

     “Appraiser” means any internationally recognized, independent business appraisal firm.

     “Auditors” means the Irish statutory external auditors of the Company that may be
appointed by the Company from time to time.

     “Board of Directors” or “Board” means the Board of Directors of the Company as
described in Article VI.

     “Business” means any commercial activity undertaken by the Company from time to time.

     “Capex” shall have the meaning ascribed to it in section 11.02(c).

     “Capital Account” means the account maintained with respect to a Member in order to
facilitate the application of U.S. income tax principles and determined in accordance with the
provisions of Sections 3.07, 3.08 and 3.09 hereof.

     “CDA” means a Customer Development Agreement.

     “Closing” means the date this Agreement is concluded, as set forth in the introductory
paragraph to this Agreement.

     “CMCI” means The Concentrate Manufacturing Company of Ireland.

3

 

     “Code” means the United States Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     “Company” means PR Beverages Limited.

     “Company Articles” means articles of association of the Company which are to be
adopted by the Company on or before Closing.

     “Concentrate” means concentrate for the manufacture of the Pepsi Products.

     “Concentrate Sub-License” means the agreement between PepsiCo Ireland and the Company
and attached hereto as Exhibit C.

     “Contract Manufacturing Agreement” means the agreement between the Company and CMCI
and attached hereto as Exhibit D.

     “Contributed Companies” means all those companies the ownership of which is treated as
a capital contribution to the Company not in exchange for shares pursuant to the Contribution
Agreement and such predecessor companies, including, but not limited to, PepsiCo Holdings OOO,
Pepsi-Cola Soft Drink Factory of Sochi, Pepsi International Bottlers (Samara) LLC, Pepsi
International Bottlers (Ekaterinburg) LLC, Pepsi Bottling Group (St. Petersburg) LLC, Pepsi
Bottling Group GmbH and Tanglewood Finance, Sarl.

     “Contribution Agreement” means the agreement between PBG Ireland and the Company
reflecting PBG Ireland’s capital contribution to the Company not in exchange for Shares and
attached hereto as Exhibit A.

     “Controls,” “is Controlled by” or “under common Control with” means
(i) the direct or indirect ownership of more than fifty percent (50%) of the equity interests (or
interests convertible into or otherwise exchangeable for equity interests) in a Person, or (ii)
possession of the direct or indirect right to vote in excess of fifty percent (50%) of the voting
securities or elect in excess of fifty percent (50%) of the Board of Directors or other governing
body of a Person (whether by securities, ownership, contract or otherwise).

     “Director” means an individual serving as a member of the Board.

4

 

     “Dissolution Value” shall have the meaning set forth in Section 10.02(a).

     “Encumber” shall have the meaning set forth in Section 9.01.

     “Escalation Process” means the Members’ good faith attempts over a period of one month
to resolve any matter, which was the subject of a tied vote of the Board, through discussions
between the PBG CFO and PI CFO and, if they are unable to resolve the matter, then through
discussions between the PBG CEO and PI CEO; provided, however, that the Members shall ensure that
such Escalation Process shall be shortened if (a) the disputed matter concerns a potential
acquisition by the Company, a Member, or an Affiliate of a Member of a business some of the assets
of which are within the Russian Federation and (b) the potential purchaser believes in good faith
that it will be prejudiced in the associated bidding process if the Escalation Process is not
shortened to less than one month.

     “Final Determination” means (a) a decision, judgment, decree or other order by any
court of competent jurisdiction which has become final and is either no longer subject to appeal or
for which a determination not to appeal has been made, or (b) any written disposition or agreement
issued by, or entered into with, a taxing authority, as the case may be, relating to any tax matter
which is final and prohibits such taxing authority, the Company or the Contributed Companies from
seeking any further legal or administrative remedies with respect to such tax matter.

     “Fiscal Year” means, except as otherwise required by the Code, the 12-month (or
shorter) period ending on the last day of December of each year.

     “Indebtedness” shall have that meaning ascribed to it in section 11.02(c).

     “Ineffective Transfers” shall have the meaning set forth in Section 9.01.

     “Insolvent” means the Company is unable to pay its debts within the meaning of Section
213(e) of the Companies Acts, 1963.

     “Irish GAAP” means the generally accepted accounting principles of the Republic of
Ireland.

     “Management Team” means the individuals described in Section 7.02.

5

 

     “Master Bottling Agreements” means the bottling agreements issued by PepsiCo or its
Affiliates to the Company authorizing the Company through its Affiliates in Russia to manufacture,
sell or distribute within the Russian Federation any beverage under any trademark belonging to
PepsiCo or its Affiliates. The Master Bottling Agreements to be executed at Closing are attached
hereto as Exhibits F.

     “Marketing Team” shall have the meaning set forth in Section 7.02(c).

     “Member” has the meaning set forth in the introductory paragraph to this Agreement.

     “Net Income” and “Net Loss” are defined for U.S. Federal income tax purposes
and mean for a Fiscal Year (i) the taxable income or taxable loss of the Company for such Fiscal
Year for U.S. Federal income tax purposes (taking into account any separately stated items), (ii)
increased by the amount of any tax-exempt income of the Company for such Fiscal Year (including
income of the Company not recognized pursuant to Code Section 959), (iii) decreased by the amount
of any Code Section 705(a)(2)(B) expenditures (within the
meaning of Treasury Regulation Section
1.704-1(b)(2)(iv)(b)) of the Company for such Fiscal Year, and (iv) including, upon a distribution
by the Company of assets in kind, the amount of gain or loss that would have been realized had such
assets been sold at their fair market value (as determined by the Tax Matters Member) for the
Fiscal Year in which such distribution is made, except that depreciation, depletion, amortization,
income and gain (or loss) with respect to Company assets shall be computed with reference to their
fair market value at the time of contribution to the Company or a Revaluation under Section 3.09
rather than with respect to their adjusted basis in the Company (as permitted by Treasury
Regulation Section 1.704-1(b)(2)(iv)(g)). Net Income or Net Loss shall also include any
Revaluation Gain or Revaluation Loss.

     “Notes” means those promissory notes issued by PepsiCo Ireland to the Company or to
its Affiliate, PBG Beverages International Limited, and attached hereto as Exhibits B1 and B2.

     “Ordinary Course” means the Company’s business in the Russian Federation of making,
marketing, selling and distributing Pepsi Products and other beverage products being distributed by
the Company in Russia from time to time.

     “PBG” means The Pepsi Bottling Group, Inc.

6

 

     “PBG CEO” means the Chief Executive Officer of PBG.

     “PBG CFO” means the Chief Financial Officer of PBG.

     “PBG Ireland” has the meaning set forth in the introductory paragraph to this
Agreement.

     “PBG Tie Breaker” means PBG’s right under Section 6.06(b).

     “PepsiCo International” or “PI” means PepsiCo International, a division of
PepsiCo, Inc.

     “PepsiCo” means PepsiCo, Inc.

     “PepsiCo Ireland” has the meaning set forth in the introductory paragraph to this
Agreement.

     “Pepsi Products” means any beverage products manufactured, sold or delivered (from
time to time) by the Russian Affiliates under the authority of PepsiCo or its Affiliates.

     “Percentage Interest” means, with respect to any Member as of any date, the percentage
of interests of the Company held by such Member as set forth in Schedule A attached hereto, as may
be amended from time to time by the Members.

     “Person” means a natural person, partnership (whether general or limited), limited
liability company, trust, estate, association, corporation, custodian, nominee or any other
individual or entity in its own or any representative capacity.

     “PI CEO” means the Chief Executive Officer of PepsiCo International or such other
PepsiCo senior executive of equivalent seniority chosen by PepsiCo if PepsiCo International ceases
to be a division of PepsiCo.

     “PI CFO” means the Chief Financial Officer of PepsiCo International or such other
PepsiCo senior executive in the event PepsiCo International is no longer a division of PepsiCo.

     “PI Veto Rights” means PepsiCo’s right under section 6.06(c).

     “Post-JV Financial Terms” shall have the meaning ascribed to it in Section 10.02(c).

7

 

     “Post-JV MBA Terms” shall have the meaning ascribed to it in Section 10.02(c).

     “Pre-Closing NOLs” means an amount equal to 366,548,000 Russian roubles.

     “Pre-Closing Tax Period” means any tax period or portion thereof ending on or before
the Closing Date.

     “Revaluation” has the meaning set forth in Section 3.09(a).

     “Revaluation Gain” and “Revaluation Loss” have the meanings set forth in
Section 3.09(c).

     “Russia GM” means the General Manager of the Company’s business in the Russian
Federation and head of the Management Team.

     “Russian Beverage Business” means any business (or that part of any business) engaged
in the manufacture, sale, marketing or distribution of beverages in the Russian Federation.

     “Securities Act” means the United States Securities Act of 1933, as amended.

     “Section 704(c) Property” means for U.S. income tax purposes any property that is
contributed to the Company at a time when its adjusted tax basis differs from its fair market value
and any Company property that, immediately after a Revaluation under Section 3.09, has an adjusted
tax basis that differs from its fair market value.

     “Shares” means any share in the authorized share capital of the Company (whether
ordinary or otherwise), conferring on the holder thereof all those rights and obligations set out
herein, in the Company Articles and in the Acts.

     “Strategic Plan” means a three-Year business plan, the first Year of which constitutes
the Annual Operating Plan. The business plan for the last two Years of the Strategic Plan shall
reflect projections of sales, marketing and advertising plans and capital expenditures relating
thereto for such Years. The Strategic Plan shall be made so that each Year (or at such other times
as the Board may agree) the Strategic Plan shall contain updated projections.

8

 

     “Tax Matters Member” means PBG which shall act as the “tax matters partner” of the
Company within the meaning of Section 6231(a)(7) of the Code and in any similar capacity under
applicable state, local or foreign tax law.

     “Third Appraiser” is defined in Section 10.02(a).

     “Transfer” shall have the meaning set forth in Section 9.01.

     “Treasury Regulations” means the regulations issued under the Code.

     “US GAAP” means generally accepted accounting principles of the United States.

     “Year” means each Fiscal Year of the Company.

     Section 1.02 Interpretation. Each definition in this Agreement includes the singular
and the plural, and reference to the neuter gender includes the masculine and feminine where
appropriate. References to (i) any statute or regulations means such statute or regulations as
amended at the time and include any successor legislation or regulations and (ii) any agreement
means such agreement as amended at the time. The words “include” or “including” shall mean
including without limitation based on the item or items listed. The headings to the Articles and
Sections are for convenience of reference and shall not affect the meaning or interpretation of
this Agreement. Except as otherwise stated, reference to Articles, Sections, Schedules, and
Exhibits mean the Articles, Sections, Schedules, and Exhibits of this Agreement. The Schedules and
Exhibits are hereby incorporated by reference into and shall be deemed a part of this Agreement.

ARTICLE II

FORMATION OF THE COMPANY 

     Section 2.01 Formation. The parties hereby acknowledge that PBG has caused the Company to be incorporated in
anticipation of the execution of this Agreement.

9

 

     Section 2.02 Registered Office. The registered office of the Company shall be:

Kilnagleary, Carrigaline, Co.

Cork, Ireland

     Section 2.03 Name. The name of the Company shall be PR Beverages Limited. The Company
Articles shall be adopted as the articles of association of the Company.

     Section 2.04 Purpose and Character of Business. The general purposes of the Company
are (i) conducting the Business in accordance with this Agreement, and all applicable laws, with a
particular view to maximizing the sales in the Russian Federation of Pepsi Products and snack foods
(while and only if the Company is the exclusive distributor of PepsiCo snack foods in the Russian
Federation) by enhancing the production, distribution and marketing thereof, and (ii) increasing
the profitability and value of the Business. The Members shall ensure that the Business shall be
operated in the best interests of the Company.

     Section 2.05 Duration. The Company shall continue in perpetuity, unless it is sooner
dissolved pursuant to Section 10.01.

     Section 2.06 Filings, Reports and Formalities. The Members shall procure that the
Board shall cause the Company to make all filings and to submit all reports required to be filed or
submitted under the Acts with respect to the Company, and shall cause the Company to make such
filings or take such other actions required under the laws of any jurisdiction where the Company
conducts business. Throughout the term of the Company, the Company shall comply with all
requirements necessary to maintain the private limited liability status of the Company and the
limited liability of the Members under the laws of the Republic of Ireland and of each other
jurisdiction in which the Company does business.

     Section 2.07 Closing. This Agreement shall become effective as of the Closing. At
Closing, the Members shall take or cause to be taken the following steps, which shall be approved
by resolutions of the Board of Directors or Members (as the case may be):

	 	(i)	 	adoption of the Company Articles and amendment of memorandum of
association;

10

 

	 	(ii)	 	appointment of the Directors of the Company; and
	 
	 	(iii)	 	appointment of KPMG-Ireland as the Auditors.

     At Closing, the Members or their respective Affiliates shall execute the following documents
with the Company and/or shall cause the Company to execute them (as appropriate) and each shall be
effective as of the Closing:

	 	1.	 	PBG Ireland Contribution Agreement.
	 
	 	2.	 	Concentrate Sub-Licence.
	 
	 	3.	 	Contract Manufacturing Agreement.
	 
	 	4.	 	Services Agreements.
	 
	 	5.	 	The Master Bottling Agreements.
	 
	 	6.	 	The Notes.
	 
	 	7.	 	Belarus Temporary Distribution Authorizations.

ARTICLE III

CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS

     Section 3.01 Share Capital Accounts / Subscription to Shares.
The authorized share capital of the Company is €100 divided into 100 ordinary shares,
having all those rights and obligations attaching thereto as set out in the Company Articles. The
initial issued share capital of the Company shall be held as follows:

	 	 	 	 	 
	Shareholder	 	Number of Shares	 	Amount Credited as Paid Up
	 
	PepsiCo Ireland

	 	40 Ordinary Shares
	 	€40
	 
	 	 	 	 
	PBG Ireland

	 	60 Ordinary Shares
	 	€60

11

 

     Section 3.02 Capital Contribution by PBG Ireland. PBG Ireland shall make a capital
contribution to the Company, not in exchange for shares, pursuant to the Contribution Agreement
attached hereto as Exhibit A, which PBG Ireland shall enter into with the Company at the Closing.

     Section 3.03 Obligation of PepsiCo Ireland. PepsiCo Ireland shall issue the Notes to
the Company or to its Affiliate, PBG Beverages International Limited (not in exchange for shares),
and execute the Concentrate Sub-License with the Company (not in exchange for shares) at Closing.
PepsiCo Ireland shall procure (not in exchange for shares) that the Concentrate Manufacturing
Company of Ireland shall execute the Contract Manufacturing Agreement with the Company at Closing.

     Section 3.04 Return of Contributions. No interest shall accrue on any share capital
or capital contributions of the Company. No Member shall have the right to withdraw or to be
repaid any share capital or capital contribution made by such Member.

     Section 3.05 Additional Issuance of Shares; Additional Classes of Shares.

          (a) In order to raise additional capital, acquire assets, redeem or retire debt of the Company
or for any other purpose, the Company may, by unanimous consent of the Members, issue Shares in
addition to those initially issued pursuant to Section 3.01 to any Member or redeem or transfer
Shares.

          (b) If the Company issues new Shares in accordance with Section 3.05(a), the Members may
unanimously determine that such Shares be issued from time to time in one or more classes thereof,
or one or more series of such classes of Shares, which classes or series shall have, subject to the
provisions of applicable law, such designations, preferences and relative, participating, optional
or other special rights as shall be approved by the unanimous consent of the Members including,
without limitation, with respect to: (i) the allocation of Percentage Interests to each such class
or series; (ii) the right of each such class or series to share in distributions; (iii) the rights
of each such class or series upon dissolution and liquidation of the Company; (iv) the price at
which, and the terms and conditions upon which, each such class or series may be redeemed by the
Company, if any such class or series is so redeemable; (v) the rate

12

 

at which, and the terms and
conditions upon which, each such class or series may be converted into another class or series of
Shares; and (vi) the right of each such class or series to vote on Company matters, including
matters relating to the relative rights, preferences and privileges of such class or series, if any
such class or series is granted any voting rights.

          (c) If the Company issues new Shares or redeems or transfers existing Shares in accordance
with this Section 3.05, the Members shall adjust each Member’s Percentage Interest accordingly, by
amendment to Schedule A, attached hereto.

     Section 3.06 Liability of Members; Ability to Bind the Company.

          (a) No Member shall be personally liable for the debts, obligations or liabilities of the
Company or any Affiliate of the Company solely by reason of being a Member of the Company.
Notwithstanding any provision herein to the contrary, in no event shall the liability of any Member
for the debts, obligations or liabilities of the Company exceed such Member’s share capital, which
shall be irrevocable, unconditional, and non-repayable.

          (b) A Share shall be personal property for all purposes. All property owned by the Company
shall be deemed to be owned by the Company as an entity, and no Member shall be deemed to own any
such property or any portion thereof.

          (c) Unless otherwise provided herein, no Member in its capacity as such, shall have the right
to act for or on behalf of or otherwise bind the Company.

     Section 3.07 Establishment of Capital Accounts. In order to facilitate the
application of U.S. income tax principles, there shall be established for each Member on the books
of the Company a capital account (a “Capital Account”). Capital Accounts shall be maintained in
accordance with Section 3.08 hereof and adjusted as provided in Section 3.09 and Article IV hereof.
For U.S. income tax purposes, the Capital Account balance of each Member immediately after the
Closing shall be established and acknowledged by all Members immediately after Closing.

     Section 3.08 Maintenance of Capital Accounts. In order to facilitate the application
of U.S. income tax principles, Capital Accounts shall be maintained as set forth in this Section
3.08.

13

 

          (a) The Capital Account of each Member shall be increased by (i) the amount of all cash
contributed by such Member to the Company; (ii) the fair market value of any property contributed
by such Member to the Company (net of any liabilities secured by such property that the Company is
considered to assume or take subject to under Section 752 of the Code); and (iii) the amount of any
Net Income (or items of gross income) allocated to such Member under Article IV hereof. The
Capital Account of PepsiCo Ireland shall not be increased by reason of its issuance of the Notes to
the Company, and shall be increased from time to time by the amount of principal paid by PepsiCo
Ireland on the Notes.

          (b) The Capital Account of each Member shall be decreased by (i) the amount of any cash
distributed to such Member by the Company; (ii) the fair market value of any property distributed
to such Member by the Company (net of any liabilities secured by such property that such Member is
considered to assume or take subject to under Section 752 of the Code); and (iii) the amount of any
Net Loss (or items of loss or deduction) allocated to such Member under Article IV hereof.

          (c) The provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to apply the concepts of Treasury Regulations under Section 704(b) of the Code and, to the
extent not inconsistent with other provisions of this Agreement, shall be interpreted and applied
in a manner consistent with such Treasury Regulations.

     Section 3.09 Revaluation of Capital Accounts. In order to facilitate the application
of U.S. income tax principles, a revaluation of the Capital Accounts shall occur as set forth in
this Section 3.09.

          (a) Upon the occurrence of an event described in Treasury Regulation Section
1.704-1(b)(2)(iv)(f), if determined by the Tax Matters Member to be advisable after consulting with
the other Member, the Capital Accounts of all the Members shall be revalued based on the fair
market value of all the assets of the Company as of the time of such event (a “Revaluation”). Upon
a Revaluation, for purposes of Section 3.07, 3.08 and Article IV of this Agreement, the Company
shall be deemed to sell all its assets in a single transaction for an aggregate amount realized
equal to their fair market value. Such deemed sale price shall be apportioned among the assets
based on their relative fair market values. The fair market value of all the Company’s

14

 

assets, and
the apportionment of the deemed sale price among those assets, in connection with a Revaluation
shall be determined by the Tax Matters Member after consultation with the other Member.

          (b) The Company shall engage in a Revaluation immediately before its dissolution, liquidation
or termination.

          (c) The gains and losses that would result from the deemed sale of the Company’s assets
pursuant to a Revaluation shall be treated as a Revaluation Gain or Revaluation Loss.

ARTICLE IV

PROFITS AND LOSSES

     Section 4.01 Determination of Profits and Losses. The profits and losses of the
Company shall be determined (a) for Irish statutory purposes, in accordance with the Acts and
Irish GAAP (provided it does not conflict with the Acts) and (b) for all other purposes, in
accordance with the Acts and U.S. GAAP (provided it does not conflict with the Acts).

     Section 4.02 Allocations. For each Fiscal Year of the Company, and in order to
facilitate the application of U.S. income tax principles, there shall be allocated among the
Members the following amounts:

          (a) Net Income and Net Loss. Except as provided in Sections 4.02(b), (c) or (d)
below, for each Fiscal Year, there shall be allocated to each Member an amount of Net Income or Net
Loss equal to (i) Net Income or Net Loss times (ii) the Member’s Percentage Interest.

          (b) Limitation on Net Loss Allocations. No allocation of Net Loss shall be made under
Sections 4.02(a) to the extent such allocation would cause the Capital Account of any Member to
have an Adjusted Capital Account Deficit. Instead, such Net Loss shall be allocated as follows:

               (i) Such Net Loss shall first be allocated to those Members that do not

15

 

have an Adjusted
Capital Account Deficit in proportion to their respective Percentage Interest until any further
allocation of Net Loss will cause any other Member to have an Adjusted Capital Account Deficit.

               (ii) If any further allocation of Net Loss under paragraph 4.02(b)(i) will cause any Member to
have an Adjusted Capital Account Deficit, such Net Loss shall be allocated to those Members that do
not have Adjusted Capital Account Deficits in proportion to their respective Percentage Interests.
This paragraph 4.02(b)(ii) shall continue to be applied in a like manner until any further
allocations of Net Loss cause all such Members to have an Adjusted Capital Account Deficit.

               (iii) Any remaining Net Loss shall next be allocated to the Members in proportion to their
respective Percentage Interests.

          (c) Regulatory Allocations.

               (i) If the Company recognizes any nonrecourse deductions (within the meaning of Treasury
Regulation Section 1.704-2(c)), partner nonrecourse deductions (within the
meaning of Treasury Regulation Section 1.704-2(i)(2)), partnership minimum gain (within the
meaning of Treasury Regulation Section 1.704-2(d)), or partner nonrecourse debt minimum gain
(within the meaning of Treasury Regulation Section 1.704-2(i)(3)), the Company shall allocate such
items among the Members in accordance with the provisions of Treasury
Regulation Section 1.704-2.

               (ii) The Company shall specially allocate items of income and gain when and to the extent
required to satisfy the “qualified income offset” requirement within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).

               (iii) If any Member would have an Adjusted Capital Account Deficit at the end of any Fiscal
Year after all other allocations under this Section 4.02 have been tentatively made, then such
Member shall be allocated items of gross income for such Fiscal Year to eliminate such deficit as
quickly as possible.

          (d) Allocations in Final Period. In the period ending with the dissolution and

16

 

termination of the Company as provided in Article X, the Net Income or Net Loss of the Company (or
items thereof) shall be allocated so that, to the extent possible, the balance in the Capital
Account of each Member immediately before such dissolution and termination is equal to the amount
to be distributed to such Member pursuant to Section 10.02(d) hereof.

     Section 4.03 Allocations for U.S. Federal Income Tax Purposes. The Company’s ordinary
income and losses, capital gains and losses and other items as determined for U.S. Federal income
tax purposes (and each item of income, gain, loss or deduction entering into the computation
thereof) shall be allocated among the Members in the same proportions as the corresponding “book”
items are allocated under Section 4.02. Notwithstanding the foregoing sentence, U.S. Federal
income tax items relating to any Section 704(c) Property shall be allocated among the Members in
accordance with Section 704(c) of the Code, using the traditional method described in Treasury
Regulation Section 1.704-3(b), to take into account the difference between the fair market value
and the tax basis of such Section 704(c) Property as of the date of its contribution to the Company
or Revaluation under Section 3.09, as applicable. Items described in this Section 4.03 shall
neither be credited nor charged to the Capital Accounts of the Members.

     Section 4.04 Partial Year Allocations. Partial year allocations shall be made on a
“book closing” or “daily proration” or “weighted average” or other appropriate basis as determined
by the Tax Matters Member, after consultation with the other Member, when required by a short
Fiscal Year of the Company, the entry or withdrawal of a Member, the transfer of any Shares by or
to a Member or for any other reason determined by the Tax Matters Member.

     Section 4.05 Adjustment of Allocations. In order to facilitate the application of
U.S. income tax principles, with respect to the allocations required under Sections 4.02, 4.03 and
4.04, the Tax Matters Member after consulting with the other Member shall have the power to adjust
such allocations as may be necessary to maintain substantial economic effect, or to insure that
such allocations are in accordance with the interests of the Member, in each case within the
meaning of the Code and the Treasury Regulations. All matters concerning allocations for U.S.
Federal, state and local and foreign income tax purposes, including accounting procedures, not

17

 

expressly provided for by the terms of this Agreement shall be determined by the Tax Matters
Member, after consultation with the other Member.

     Section 4.06 Excess Nonrecourse Liabilities. For purposes of allocating excess
nonrecourse liabilities consistent with Treasury Regulation Section 1.752-3(a)(3), each Member
shall have an interest in partnership profits equal to its Percentage Interest.

ARTICLE V

DISTRIBUTIONS; WITHHOLDING

     Section 5.01 Distributions to the Members. Other than distributions made upon the
Company’s dissolution, which shall be made in accordance with Section 10.02, all other
distributions shall be made as follows:

          (a) Dividends.

               (i) The Members shall procure, subject as provided in sub-clause (iii) below and in the
absence of agreement to the contrary, that in respect of each Year:

                    (A) 100 per cent of the profits of the Company (available for distribution within the meaning
of the Acts) shall be distributed by way of cash dividends by the Company within three (3) months
after the end of that Year, and in pursuance thereof an interim dividend shall be declared and paid
during the last three (3) months of that Year and a final dividend shall be declared and paid not
later than three (3) months after the end of that Year and such interim dividend shall be not less
than seventy five (75) per cent of the total amount estimated by the Board to be required to be
distributed under this section;

                    (B) the Affiliates of the Company shall declare and pay to the Company sufficient and timely
dividends to ensure the Company’s compliance with this section;

               (ii) In deciding whether in respect of any Year the Company has profits available for
distribution the parties hereto shall procure that the Auditors shall certify in advance whether
such profits are available or not and the amount thereof (if any). In giving such

18

 

certificate the
Auditors shall act as experts and not arbitrators and their determination shall be binding on the
parties hereto.

               (iii) No dividend shall be declared and/or paid by the Company:

                    (A) which is prohibited by any legal commitment binding upon the Company from time to time;

                    (B) which would render the Company unable to pay its debts as and when they fall due;

                    (C) the amount of which is reasonably required to be retained as prudent and proper reserves
including an allowance for future working capital and capital investments required by the
prevailing AOP and Strategic Plan, such sum to be determined by the Board within three (3) months
after the end of the relevant Year; and

                    (D) the amount of which should be retained as proper provision for corporate tax or other tax
liabilities or for other actual liabilities of the Company as determined by the Board.

               (iv) Any distribution under this Section 5.01(a) shall be made to the Members in accordance
with their Percentage Interests.

          (b) Other Distributions. Except as otherwise provided in this Section 5.01, any
distribution must be approved in accordance with Article VI.

     Section 5.02 Withholding. All amounts withheld pursuant to any applicable tax law
with respect to any payment or distribution to a Member shall be treated as amounts distributed to
such Member.

ARTICLE VI

BOARD OF DIRECTORS

     Section 6.01. Number of Directors. The Company shall maintain a Board of Directors, as
required under the Acts, which shall have eight (8) Directors. Each Director shall have one

19

 

vote on each matter with respect to which the Board of Directors holds a vote. Any action shall be
effective only upon the affirmative vote of a majority of the Directors in attendance at a duly
held meeting of the Board (or in accordance with Section 6.06) or the unanimous written consent of
all Directors.

     Section 6.02. Board Composition / Term.

          (a) At least two Directors shall be Irish residents. Each Member shall appoint one such
Director. The Irish resident Directors initially appointed by PBG Ireland and PepsiCo Ireland are
identified on Schedule B to this Agreement.

          (b) Each of PBG Ireland and PepsiCo Ireland shall appoint three other Directors. The Directors
initially appointed by PBG Ireland and PepsiCo Ireland are identified on Schedule B to this
Agreement.

          (c) Each Director shall serve until his or her successor is appointed by PBG Ireland or
PepsiCo Ireland, as applicable. Each Member shall, subject to Section 6.02(a), have the right to
remove and replace their respective appointees in their respective discretion and to fill any
vacancy caused by the removal, resignation or death of their respective appointees; provided,
however, that each Member shall ensure that at least three of their respective appointees shall be
senior executives of their respective European operations. Directors shall not be compensated for
their services by the Company, but shall be reimbursed by the appointing Member for their expenses
associated with being a Director.

     Section 6.03 Chairman. The Chairman of the Board shall be appointed by PBG Ireland
and shall initially be the President of PBG Europe.

     Section 6.04. Meetings. The Board shall meet at least quarterly in Ireland at a time
and place as mutually agreed by the Members provided that at least four Directors (two each
appointed by different Members) attend such meetings in person or by telephone from within Ireland.
Additional meetings shall be convened at the written request of either Member with the consent of
the other Member, which consent shall not be unreasonably withheld. At each meeting of the Board,
a quorum shall exist if at least four Directors are present (in person or by telephone) with at
least two of such Directors having been appointed by each member.

20

 

     Section 6.05. Duties. The Board shall have all such duties, obligations and
authority as set out in the Company Articles and the Acts and that are required of a board of
directors under the Acts or under Irish company law generally. In addition, the Board shall have
the duties, obligations and authority set out in the subsections of this Section 6.05. The Board
shall have no other duty, obligation or authority except as provided under this Section 6.05 the
Company Articles, the Acts or under Irish Company law.

          (a) Generally. The Board shall establish the overall direction and strategy of the
Company and the Business and shall oversee the annual and quarterly performance of the Business,
and shall evaluate the progress of the Business against certain key performance indicators as the
Board may determine from time to time.

          (b) Strategic Plan and AOP. By November of each year (commencing in 2007) the Board
shall, with the input and/or participation of senior management of PBG and PI and the Management
Team, meet to discuss and approve the Strategic Plan and the Annual Operating Plan for the upcoming
Year. PBG and PI have agreed on the AOP for 2007 and the Strategic Plan for 2007 to 2009
(inclusive) prior to the Closing. The Board shall also have the authority to approve any material
change to the AOP within a given Year.

          (c) Other Responsibilities. The Company shall not undertake any of the following
activities without the prior written approval of the Board or, in the case of a tie vote of the
Board, following completion of those procedures set out in Section 6.06:

               (i) The adoption or material modification of an AOP; including, without limitation, the
assumption of material liabilities greater than those provided for in the AOP;

               (ii) Entering into any contract, commitment or arrangement which is materially inconsistent
with the applicable AOP;

               (iii) Making or committing to make any capital expenditure or capital investment (or series of
related expenditures or investments) in excess of US$1,500,000, unless such higher amount is
specifically approved as part of the AOP;

21

 

               (iv) Incurring any indebtedness for borrowed money or creating any encumbrance or security
over the assets of the Company which (in each case) is inconsistent with the applicable AOP;

               (v) Making any loans which in aggregate exceed $100,000 to any person or grant any guarantee
or indemnity, in any case other than in the ordinary course of business;

               (vi) The sale or transfer of all or a material part of the assets of the Company;

               (vii) Entering into, amending or terminating any transactions between the Company and any
Member;

               (viii) Introducing any new products to the Business (in the case of products to be sold under
any trademark belonging to PepsiCo or its Affiliates, such introduction shall require the written
assent of the PepsiCo Ireland Directors)

               (ix) Changing the Company’s:

                    (A) Auditors (with approval of the Members);

                    (B) Accounting reference date; or

                    (C) Business name (with approval of the Members);

               (x) Commencing any litigation or arbitration other than in the ordinary course of business.

          (d) Members’ Reservation of Powers. The Members specifically reserve to themselves and
do not delegate to the Board any power to:

               (i) amend this Agreement (including the dividend policy);

               (ii) permit any Member to transfer, assign, pledge or otherwise hypothecate all or part of its
Shares in the Company;

               (iii) alter or amend the Company Articles or memorandum of

22

 

association from the form adopted pursuant to Section 2;

               (iv) enter into voluntary liquidation while the Company is solvent;

               (v) carry out any form of restructuring of the Company’s share capital;

               (vi) increase the number of Directors or alter the permitted number of Directors approved by
each Member; and

               (vii) issue new shares or redeem or transfer existing Shares in accordance with Section 3.05.

          All of the foregoing matters shall require the unanimous consent of both Members and in the
absence thereof shall be subject to the procedures for resolving deadlock set forth in
Section 6.06.

     Section 6.06. Procedures Following Board Deadlock or Deadlock of Members Under Section
6.05.

          (a) Escalation Process. If in the event a vote by the Board on a particular matter is
tied or the Members are deadlocked over a matter listed under Section 6.05(d), the Members shall
attempt to resolve such disputed matter through the Escalation Process.

          (b) PBG Tie-Breaker. If a matter that is the subject of the Escalation Process is not
resolved following the Escalation Process, the matter shall be submitted (within 10 days of the
conclusion of the Escalation Process) to the PBG CEO whose decision shall be final and binding on
the Members and, subject to compliance with the Acts, the Company, except as provided under Section
6.06(c).

          (c) PI Veto Rights. Notwithstanding anything to the contrary in this Agreement, the
PI CEO may veto any of the following matters, which has been determined by vote of the PBG CEO
pursuant to Section 6.06(b):

               (i) Any acquisition, divestiture or other capital expenditure outside the Ordinary Course.

23

 

               (ii) Any effort to engage in a line of business outside the Ordinary Course.

               (iii) Any acquisition or divestiture in the Ordinary Course in excess of eighty-five million
US dollars (US$85,000,000).

               (iv) Amendment of this Agreement (including the Exhibits and Schedules).

               (v) The issuance of all forms of shares or securities by the Company or its subsidiaries.

               (vi) Any external financing by the Company or its subsidiaries in excess of that contemplated
by the approved AOP.

               (vii) Any decision not to pay a cash dividend, despite the availability of profits for such
purposes in accordance with Section 5.01(a).

               (viii) Any transaction involving the Company or one of its subsidiaries and PBG or one of its
subsidiaries.

          (d) Deadlock Regarding Capital Expenditure or Strategic Plan. Where the matter that is
the subject of a tied vote by the Board is a capital expenditure or a Strategic Plan, then (i) in
the case of a disputed item of capital expenditure, the Company shall not incur such item until
such matter is resolved in accordance with subsections (a), (b) and (c) of the Section 6.06, and
(ii) in the case of a disputed Strategic Plan, it shall not become effective until it is approved
in accordance with this Section 6.06 and, in pending such resolution, the Company and Business
shall operate in accordance with the most recently approved Strategic Plan.

ARTICLE VII

GOVERNANCE OF COMPANY AND BUSINESS

     Section 7.01. Governance Principles. The governance of the Company and the Business
shall be guided by the following principles:

24

 

          (a) Communication Principles. The Company has been formed on the principle that each
Member and their respective representatives shall have full visibility into the operations,
performance, finances, key initiatives (including capacity/capex, strategic initiatives, etc.),
marketing (including strategy, spend, etc.), and other aspects of the Company and the Business.
The Company, through the Management Team, shall provide to PBG and PI clear and detailed written
reports on the (i) past and current performance of the Business and (ii) forecasts (including the
drivers of such forecasts) of the Company and the Business. The Board and the Management Team shall
proactively communicate any material business issues relating to the Company and the Business to
the Members in written reports in such form and with such content as the Board and/or Management
Team may determine with a view to minimizing the reporting burden on the day-to-day operation of
the Business. The Members shall procure that the Board
shall as soon as practicable after Closing, pass a written resolution delegating the day to
day management of the Business to the Management Team, and noting that the Management Team shall
report to the Board in accordance with this Article VII.

          (b) Management Principles. The Company has been formed on the principles that the
Business will be operated in the best interests of the Company and that the management rights of
each Member shall be established independent of such Member’s ownership interest in the Company.
The Members, through their representatives on the Board and Management Team and their participation
in the meetings described in Section 7.03, shall actively and mutually participate in the
development of the Strategic Plan and the AOP, including the associated capacity plans and shall
jointly develop marketing and sales plans related to the Business. Notwithstanding the foregoing,
the Management Team shall be responsible for the day-to-day management of the Business.

     Section 7.02. Management Team.

          (a) Composition. The Management Team shall be comprised of the Russia GM and his or
her direct reports, who shall include a Chief Financial Officer and a Vice President of Marketing.
The Russia GM shall be the head of the Management Team and shall report to the Chairman of Board.
The appointment and/or renewal of the Russia GM, Chief Financial Officer and the Vice President of
Marketing shall be approved in writing by each Member’s head of

25

 

European operations; provided,
however, that the Russia GM and the Chief Financial Officer shall be appointed by PBG, and the Vice
President of Marketing and the director of juice shall be appointed by PI.

          (b) Responsibilities. The Russia GM shall have full and final authority over the
day-to-day operation of the Business within the Russian Federation in accordance with the
prevailing AOP, and shall resolve any dispute within the Management Team related thereto. The
Russia GM shall be responsible for and is hereby empowered to do or cause to be done all actions
reasonably necessary to ensure the execution of the prevailing AOP, without any further approval of
the Board or the Members. The Russia GM shall obtain Board approval only if a required action
constitutes a material change to the prevailing AOP.

          (c) Marketing Team. The Business shall have a Marketing Team, consisting of the Vice
President of Marketing, as well as marketing personnel from PBG. The appointment or removal of any
director-level marketing employee employed in connection with a new line of business or
acquisition, including any director of juice, shall be approved by PI. The Vice President of
Marketing shall have dual reporting lines to the Russia GM and to the head of Marketing for PI’s
European operations, who shall jointly set the Vice President of Marketing’s performance objectives
and undertake his or her performance reviews. The Russia GM and the head of Marketing for PI’s
European operations shall jointly participate and contribute to other development activities
related to Marketing Team, including the people planning process, career development plans and
training.

     Section 7.03. Business Reviews.

          (a) Monthly Business Reviews. Each month by means of a sixty-minute phone call, the
Management Team shall provide a review of the Business to the management of PI Europe and PBG
Europe. Such meetings shall be integrated into other meetings involving the participants, and the
parties shall agree on the templates/scorecards for such meetings to report on the performance of
the Business versus the prevailing AOP and Strategic Plan.

          (b) Quarterly Business Reviews. The Management Team shall provide a written review of
the Business to the Board at each quarterly meeting of the Board. Such review

26

 

shall address, among
other things, operations, key performance indicators and progress against strategic goals.

     Section 7.04. Conflicts. Notwithstanding anything to the contrary in this Agreement
or any Exhibit or Schedule hereto, in the event of any conflict between the provisions of Article
VI or VII of this Agreement and the provisions of any Master Bottling Appointments relating to
annual operating and strategic plans (including, without limitation, plans related to marketing,
sales, distribution and manufacturing capacity), finances, or capital, the provisions of Articles
VI and VII of this Agreement shall govern. For the avoidance of doubt all provisions of the Master
Bottling Agreements (including those relating to annual operating and strategic plans, finances or
capital) shall prevail in the event of a conflict with any provisions of this Agreement, save where
the provisions of the Master Bottling Agreement relating to operating and strategic plans
(including, without limitation, plans related to marketing, sales, distribution and
manufacturing capacity), finances or capital conflict with Articles VI and VII of the Agreement
(in which case the latter shall prevail). In the event of any conflict between the provisions of
this Agreement and the Company Articles, the former shall prevail and the Members shall, subject to
compliance with the Acts, promptly cause the Company Articles to be appropriately amended to remove
any such conflict.

     Section 7.05 Authorized Signatories / Related Party Agreements. Each duly appointed
officer (i.e. any director or secretary) of the Company shall have the authority to execute such
documents as are necessary or appropriate to evidence any transaction involving the Company that is
approved in accordance with Articles VI and VII hereof; provided however, that with respect to any
document evidencing a transaction involving the Company or one of its Affiliates and a Member or
one of its Affiliates only an officer appointed by the Member who is not a party (directly or
through its Affiliate) to the transaction shall be authorized to execute such document on behalf of
the Company. As an initial matter, both Members hereby acknowledge and agree to the Company’s
entering into the following agreements with its Members or one of their respective Affiliates: (a)
the services agreements attached hereto as Exhibits E1 and E2; and (b) the short-term US$1 million
working capital loan from a PBG Affiliate to the Company, which shall be effective on the Closing.

27

 

ARTICLE VIII

RECORDS, ACCOUNTING MATTERS, TAX MATTERS

     Section 8.01 Maintenance & Review of Records and Financial Controls. The Company
shall maintain, at the registered office of the Company, books, records, and accounts showing
separately, in accordance with PBG’s usual policies, all items that in any way affect the financial
and tax computations called for by this Agreement, and shall make the records, and accounts
available for inspection and copying by any Member or its authorized representative at all
reasonable times. Each Member shall have the right to review all financial books, records, reports
and statements of the Company, and the Company shall ensure that PBG’s external auditor shall have
such access to the Company’s financial books, records, reports, statements,
and internal controls and processes as shall be necessary to support PBG’s consolidation of
the Company’s results. PBG shall ensure that the financial controls to which the Company shall be
subject shall comply fully with all applicable legislation, including, to the extent determined
applicable by PBG, the Sarbanes-Oxley Act of 2002.

     Section 8.02. Audit / Preparation of Financial Reports.

          (a) PBG shall perform an annual audit of the financial books, records, reports, statements,
and internal controls and processes of the Company to ensure that all such items are in accordance
with PBG’s financial and accounting policies. PBG shall perform such audit through its internal
audit function. The scope and timeline of such audit shall be mutually agreed by the Members, and
PI shall have the right to participate in the audit performed by PBG. PBG shall cause to be
prepared and furnished to the Members, within one hundred eighty (180) days after the close of the
Year, audited financial statements of the Company.

          (b) PBG shall prepare or cause to be prepared, within five (5) business days after the close
of each month, a financial report for such month, and shall cause a copy of the report to be
furnished to the other Members. Such copy shall include a balance sheet as of the last day of the
calendar month and a statement of income or profit and loss for the calendar month and the
year-to-date period including that calendar month. The statement of income or profit and loss
shall disclose the amount of and any changes in profit or loss, and shall show in

28

 

particular the
amounts of depreciation, amortization, interest, and extraordinary income or charges, whether or
not included in the operating income.

          (c) The Company shall be responsible for any fees and expenses associated with PBG’s services
provided under (a) above in accordance with the services agreement attached hereto as Exhibit E1.

     Section 8.03 Accounting Method. The Company shall prepare its financial statements in
accordance with the Acts and US GAAP, applied in accordance with PBG’s accounting policies.

     Section 8.04 Tax Matters.

          (a) Tax Matters Member. The Tax Matters Member shall manage or cause to be managed all
administrative tax proceedings conducted at the Company level by the U.S. Internal Revenue Service
or other taxing authorities. All costs and expenses reasonably incurred by the Tax Matters Member
while acting in such capacity shall be reimbursed by the Company without mark-up. The Tax Matters
Member shall consult with the other Members with respect to any position or adjustment that could
materially adversely affect the other Members. The Tax Matters Member shall perform the following:

               (i) Cause all required tax returns (including information returns) of the Company and its
subsidiaries to be timely filed. The Tax Matters Member shall cause the Company’s tax returns to
be prepared using accounting principles approved by any relevant tax authority applied in
accordance with PBG’s usual accounting policies.

               (ii) Deliver a U.S. Internal Revenue Service Form K-1 (or an equivalent form) to each Member
at such time as would reasonably enable such Member or its direct or indirect owners to prepare and
timely file its or their U.S. Federal income tax returns (including applicable extensions of time
to file).

               (iii) Furnish or cause to be furnished to the Members, within sixty (60) days after the close
of the taxable year of the Company, all tax information with respect to the Company as may be
required by the other Members for the preparation of any non-U.S separate

29

 

tax return which they may be required to file.

               (iv) Furnish the name, address, Percentage Interest and taxpayer identification number of each
Member to any taxing authority and take such action as may be reasonably necessary to constitute
every Member as a “notice partner” as that term is defined in Code Section 6231.

               (v) Refuse to extend the statute of limitations with respect to tax items of the Company
without the unanimous written consent of the Members.

          (b) Tax Treatment. It is the intention of the Members, and the Members agree, that
the Company shall be treated as a partnership for purposes of U.S. Federal, state and local income
taxes, and further agree not to take any position or make any election, in a tax
return or otherwise, inconsistent with that treatment. Accordingly, the provisions of this
Agreement are intended, among other things, to achieve for the Members an allocation of the profits
and losses of the Company (including the effect of any entities treated as disregarded from their
owners that the Company owns under U.S. federal income tax law) for U.S. federal income tax
purposes consistent with the requirements of the provisions of the Code and the Treasury
Regulations applicable to partnerships. In this regard, it is intended that the economic interests
of the Members reflect the Percentage Interests set forth in Schedule A.

          (c) Member Action. Nothing in this Section 8.04 shall limit the ability of any Member
to take any action in their individual capacity relating to administrative proceedings of Company
matters that is left to the determination of any individual Member under the Code or under any
similar foreign, state or local provision. With respect to any tax matter relating individually to
a Member, such Member shall rely on the advice of its own tax advisor and shall not be entitled to
rely on the advice of the Tax Matters Member.

          (d) Tax Elections. Except as otherwise provided in this Agreement, all elections
required or permitted to be made by the Company under the Code (or other applicable tax law) and
all material decisions with respect to the calculation of its taxable income or tax loss or other
tax items under the Code (or other applicable tax law) or any other matter relating to taxes shall
be made in such manner as may be determined by the Tax Matters Member after

30

 

reasonable consultation
with the other Members, and such determinations shall be conclusive and binding on all Members.

          (e) Tax Withholding. Notwithstanding any provision in this Agreement to the contrary,
the Tax Matters Member is authorized to take or cause to be taken any and all actions that it
reasonably determines to be necessary or appropriate to insure that the Company satisfies its
withholding and tax payment obligations under Section 1441, 1445, 1446 or any other provision of
the Code (or other applicable foreign laws). The Tax Matters Member may cause the Company to
withhold any amount that it determines is required to be withheld from any amounts otherwise
distributable to any Member under Articles V or X hereof; provided, however, that such amount shall
be deemed to have been distributed to such Members for purposes of this Agreement.

          (f) Pre-Formation Tax Obligations of Members. Notwithstanding any provision in this
Agreement to the contrary, the Members shall:

               (i) Share any liabilities for income taxes (including, but not limited to, profits taxes) of
the Contributed Companies with respect to any Pre-Closing Tax Period as follows:

                         (A) If (a) the Russian taxing authorities make Final Determinations that result in any
liability of the Contributed Companies for income taxes with respect to any Pre-Closing Tax Period,
and (b) the amount of such Final Determinations exceed in the aggregate the amount of the
Pre-Closing NOLs, then PBG Ireland or its Affiliates shall indemnify and hold harmless PepsiCo
Ireland or its Affiliates for an amount equal to the product of (x) the aggregate amounts of any
such Final Determinations in excess of the Pre-Closing NOLs and (y) PepsiCo Ireland’s Percentage
Interest.

                         (B) If any non-Russian taxing authority makes a Final Determination that results in any
liability of the Contributed Companies for income taxes with respect to any Pre-Closing Tax Period,
PBG Ireland or its Affiliates shall indemnify and hold harmless PepsiCo Ireland or its Affiliates
for an amount equal to the product of (x) the amount of any such Final Determination and (y)
PepsiCo Ireland’s Percentage Interest.

31

 

                         (C) Notwithstanding any provision in this Section 8.04(f)(i) to the contrary, if a taxing
authority makes a Final Determination for any income tax liability of the Contributed Companies
with respect to any Pre-Closing Tax Period set forth in (A) or (B) above that includes
non-deductible interest, penalties and/or similar charges, PBG Ireland or its Affiliates shall
indemnify and hold harmless PepsiCo Ireland or its Affiliates for an amount equal to the product of
(x) the amount of any such non-deductible interest, penalties and/or similar charges and (y)
PepsiCo Ireland’s Percentage Interest.

                         (D) If PBG Ireland or its Affiliates is required to indemnify PepsiCo Ireland or its
Affiliates pursuant to this Section 8.04(f)(i), the Members shall cooperate in good faith to ensure
this indemnification is made in a tax-efficient manner.

               (ii) Share any Final Determinations resulting in liabilities for taxes
included in the determination of net operating profit before income taxes (including, but not
limited to, value added, property, unified social, employment, transport, advertising and land
taxes and any interest, penalties and similar charges thereon) of the Contributed Companies with
respect to any Pre-Closing Tax Period in accordance with their Percentage Interests; and

               (iii) Each be responsible for their liabilities for all other taxes not specifically set forth
in Section 8.04(f)(i) and (ii) above with respect to any Pre-Closing Tax Period.

          (g) If the Company makes a transfer of cash or property to one or more Members that is not
made in proportion to the Percentage Interests of all Members, then either (i) the Members shall
unanimously agree as to the U.S. income tax treatment of such a transfer or (ii) the Company shall
obtain a “more likely than not” opinion from a major law firm as to the appropriate treatment of
such transfer under the U.S. “disguised sale” rules (i.e., Section 707(a) of the Code) and the
Members shall treat the transfer accordingly.

     Section 8.05 Confidentiality. All Company and Business records and accounts,
including reports, shall be treated as confidential and the Members shall take or cause to be taken
such reasonable precautions to prevent the disclosure thereof to any unauthorized Person for a
period ending ten (10) years following the dissolution and winding-up of the Company.

32

 

     Section 8.06 Services Agreements. Each Member (or its Affiliates) shall be reimbursed
by the Company for the reasonable direct costs and expenses (subject to a mutually agreed mark up)
of any and all services such Member (or any of its Affiliates) performs on behalf of the Company
under this Article VIII or otherwise. The services provided by the Members as of the Closing shall
be those set out in the services agreements attached hereto as Exhibits E1 and E2. Provided the
Board has so authorized the Company, the Company shall enter into additional services agreements
with the Members or their Affiliates on such terms and conditions as the parties may agree.

ARTICLE IX

RESTRICTIONS ON TRANSFER

     Section 9.01 Restrictions on Transfers. Except as otherwise provided in Section 9.02,
no Member may sell, assign, convey, transfer, give, donate or otherwise dispose of (collectively,
“Transfer”) or mortgage, pledge, hypothecate, assign as security or otherwise encumber
(collectively, “Encumber”), or contract to Transfer or Encumber, any of its Shares, without the
prior written consent of the other Member, which consent may be withheld or conditioned in each
such other Member’s sole discretion. No purported Transfer or Encumbrance made in breach of the
previous sentence (an “Ineffective Transfer”), shall be recognized by the Company. An Ineffective
Transfer shall be void and shall not be recorded as a transfer on the transfer records of the
Company.

     Section 9.02 Transfers to Affiliates. A Member may freely, upon notice to the other
Member and with the consent of the other Member (such consent not to be unreasonably withheld or
delayed), transfer its Shares to any of its Affiliates provided that any such transferee shall
agree prior to such transfer to be bound by the terms of this Agreement.

33

 

ARTICLE X

DISSOLUTION AND TERMINATION

     Section 10.01 Events of Dissolution. The Company shall continue in perpetuity until
dissolved. The Company shall be dissolved and its affairs shall be wound up immediately if any of
the following occur:

          (a) the Company’s dissolution is unanimously agreed in writing by
the Members;

          (b) the Company is deemed Insolvent;

          (c) six (6) months have passed since the date on which a Member provides written notice to the
other Member that the Company shall be dissolved by virtue of such Member having a disagreement
with the other about the strategic direction of the Business,
provided that the disagreement has been the subject of (i) the Escalation Process, (ii) the
PBG Tie Breaker and (if dissolution is initiated by PBG) the PepsiCo Veto, and (iii) three (3)
months have lapsed since the PBG Tie Breaker and (if applicable) the PepsiCo Veto. As an example,
for purposes of this Section 10.01(c), disagreement about the strategic direction of the Business
shall include a disagreement regarding the Strategic Plan;

          (d) the termination of the Concentrate Sub-Licence due to the Company’s material breach
thereof, which breach is the direct result of actions taken by the Company without the approval of
PepsiCo;

          (e) the termination of the Master Bottling Agreements due to the Company’s material breach
thereof, which breach is the direct result of actions taken by the Company without the approval of
PepsiCo;

          (f) The closing of the acquisition by PepsiCo, independently of the Company, of a business
that is primarily a Russian Beverage Business which the Company has declined to purchase having
been so offered by PepsiCo in accordance with Section 11.03.

     Section 10.02 Dissolution Process. Subject to applicable law, the Company shall be
dissolved in accordance with this Section 10.02.

34

 

          (a) Dissolution Value of the Company. Each Member shall select an Appraiser, and the
two selected Appraisers shall jointly select a third Appraiser (the “Third Appraiser”), each of
which shall appraise the fair market value of the Company. In determining the fair market value of
the Company, each Appraiser shall include in its appraisal the entire fair market value of the
Company, its subsidiaries and the Business, including without limitation, (i) the fair market value
of those Master Bottling Agreements related to the Business in effect on the date of dissolution
or, if such agreements are not in effect on the date of dissolution, as most recently in effect
prior to the date of dissolution; (ii) the financial relationship between PepsiCo and the Company,
including without limitation, the fair market value of any bottler funding provided by PepsiCo and
the fair market value of the Company’s rights to procure concentrate at cost under the Concentrate
Sub-License and Contract Manufacturing Agreement, and (iii) the fair market value of the goodwill
of the Company and the Business. For the sake of clarity, such valuation
will reflect the fair market value of the Company, its Affiliates and the Business determined
(i) without regard to whether any component thereof had apparent value as of the date of this
Agreement and (ii) as if neither a dissolution of the Company nor a termination of the Concentrate
Sub-License or Master Bottling Agreements has occurred or will occur. From the final appraisals of
the three Appraisers, the dissolution value of the Company shall be the average of the two closest
appraisals (the “Dissolution Value”).

          (b) Division of Dissolution Value. The Dissolution Value shall be divided between
the Members in accordance with their Percentage Interests, as reflected on Schedule A, as provided
in subsections (c) through (g) below.

          (c) New Master Bottling Agreement / Financial Terms. Upon the dissolution of the
Company, PepsiCo and PBG shall discuss whether PBG shall become the authorized bottler in the
Russian Federation. If the parties are unable to agree, then PBG or one of its Affiliates shall
immediately become the authorized bottler of Pepsi Products in the Russian Federation following
dissolution of the Company. In such event, PBG and PepsiCo shall endeavour to agree to the terms
of new Master Bottling Agreements for the Russian Federation (the “Post-JV MBA Terms”) and new
financial terms associated therewith in particular the price of concentrate and the principles
according to which advertising and marketing activities shall be funded (the “Post-JV Financial
Terms”); provided, however, that if PBG and PepsiCo are unable to agree on

35

 

the Post-JV MBA Terms,
then the parties shall default to the express written terms of the master bottling agreements
between PepsiCo (or one of its Affiliates) and PBG for the Russian Federation in effect immediately
prior to the Closing. If 90 (ninety) days before the dissolution of the Company is complete,
PepsiCo and PBG are unable to agree to the Post-JV Financial Terms, the Third Appraiser shall
determine fair, reasonable and economically viable Post-JV Financial Terms consistent with the
parties’ mutual intention to divide the Dissolution Value in accordance with the Members’
Percentage Interests. The Appraiser’s determination shall be final and binding on the parties.
The Post-JV Financial Terms (so determined by the Third Appraiser) shall remain in force for five
years following the dissolution of the Company, subject to each party’s right to renegotiate such
terms in light of any material adverse change in market conditions impacting the parties’
relationship in the Russian Federation.

          (d) Distribution of the Company’s Assets. Upon the dissolution of the Company, the
Company’s rights under the Concentrate Sub-License shall revert to the licensor identified in that
agreement, and, if PBG becomes the authorized bottler, all other tangible and intangible assets
comprised in the Business within the Russian Federation shall revert to PBG. The distribution of
the remaining assets of the Company and the assumption of the Company’s liabilities shall be
determined unanimously by the Members.

          (e) Valuation of Distributed Assets. Each Member shall select one of the Appraisers
to determine the percentage share of Dissolution Value such Member (together with its Affiliate(s))
actually shall receive or has received from the distribution in kind of the Company’s assets and
the assumption of the Company’s liabilities, as the case may be; provided, however, that such
determination shall also take into effect the value of the Post-JV MBA Terms and Post-JV Financial
Terms. If the Members are unable to agree on which Appraiser shall make such determination, the
Third Appraiser shall make such determination.

          (f) True Up Payment. If according to the Appraiser’s determination made in accordance
with Section 10.02(e), the percentage share of Dissolution Value received by a Member (or by its
Affiliate(s)) exceeds that Member’s Percentage Interest, such Member shall make a cash payment to
the other Member equal to that excess percentage times the Dissolution Value. The Member receiving
any such cash payment shall be solely responsible for any

36

 

applicable taxes on such payment;
provided, however, that the paying Member agrees to reasonably cooperate with the receiving Member
to ensure the payment is made in a tax-efficient manner.

          (g) Timing. The distribution and true-up payment, if any, made pursuant to this
Section 10.02 shall be made by the end of the Year in which dissolution occurs, or, if later,
within ninety (90) days after the date of such dissolution.

ARTICLE XI

REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 11.01 Representations and Warranties of Members.
Each Member hereby represents, warrants and covenants as follows:

          (a) Such Member is duly organized or formed, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its formation.

          (b) Such Member has the right, power and authority to enter into this Agreement, to become a
Member and to perform its obligations under this Agreement, and this Agreement is a legal, valid
and binding obligation of such Member.

          (c) The execution and delivery of this Agreement does not violate or conflict with the
charter, bylaws or formation documents of such Member or any agreement, judgment, license, permit,
order or other document applicable to or binding upon such Member or any of its properties; and no
consent, approval, authorization or order of any court or government authority or third party is
required with respect to such Member in connection with the execution and delivery of this
Agreement.

          (d) Neither Member nor any of its Affiliates has employed or retained any broker, agent or
finder in connection with this Agreement, or paid or agreed to pay any brokerage fee, finder’s fee,
commission or similar payment to any Person on account of this Agreement or the transactions
provided for herein.

37

 

          (e) Except for a change of law over which the affected Member has no control (and the affected
Member shall immediately notify the other Members when the affected Member learns of such
occurrence), the foregoing representations and warranties shall remain true and accurate during the
term of the Company, and such Member shall neither take action nor permit action to be taken which
would cause any of the foregoing representations to become untrue or inaccurate.

          (f) The undersigned Members understand (i) that the Shares have not been registered under the
Securities Act or any state securities laws because the Company is issuing these Shares in reliance
upon the exemptions from the registration requirements of the Securities Act or applicable state
securities laws providing for issuance of securities not involving a public
offering, (ii) that the Company has relied upon the fact that the Shares are to be held by
each Member for investment, and (iii) that exemption from registration under the Securities Act or
applicable state securities laws would not be available if the Shares were acquired by a Member
with a view to distribution. Accordingly, each Member hereby confirms to the Company that such
Member is acquiring its Shares for such own Member’s account, for investment and not with a view to
the resale or distribution thereof. Each Member shall not transfer, sell or offer for sale all or
any portion of the Shares unless there is an effective registration or other qualification relating
thereto under the Securities Act and under any applicable state securities laws or unless the
holder of Shares delivers to the Company an opinion of counsel, satisfactory to the Company, that
such registration or other qualification under the Securities Act and applicable state securities
laws is not required in connection with such transfer, offer or sale. Each Member understands that
the Company is under no obligation to register the Shares or to assist such Member in complying
with any exemption from registration under the Securities Act or any state securities laws if such
Member should, at a later date, wish to dispose of the Shares.

     Section 11.02 Representations and Warranties of PBG Ireland. PBG Ireland hereby represents
and warrants and covenants as follows:

          (a) Prior to Closing the Company has transacted no business whatsoever and incurred no
liabilities.

          (b) The management accounts of PBG’s Affiliates in the Russian Federation

38

 

dated December 31, 2006 are not misleading in any material respect.

          (c) The total indebtedness of the Company’s Russian Affiliates at Closing (the “Indebtedness”)
shall be equal to all capital expenditures incurred by them between 1st of January 2007
and Closing (the “Capex”). Within thirty (30) days after Closing, the parties shall determine the
Indebtedness and Capex and the extent and mechanism of any true-up necessary if the Indebtedness
does not equal the Capex.

     Section 11.03 Non-Competition Covenants.

          (a) While this Agreement is in effect, neither PBG nor any of its Affiliates
will engage, directly or indirectly, in a Russian Beverage Business or in the manufacture,
sale, marketing or distribution of any snack foods in the Russian Federation other than through the
Company, unless it receives the advance written consent of PepsiCo.

          (b) While this Agreement is in effect, neither PepsiCo nor any of its Affiliates will engage,
directly or indirectly, in a Russian Beverage Business, other than through the Company, unless
PepsiCo receives the advance written consent of PBG; provided, however, PepsiCo may, independently
of the Company and without having to obtain the prior consent of the Company, acquire either (i) a
multi-national company that has primary operations outside of the Russian Federation but that also
has a Russian Beverage Business, or (ii) a Russian business which is not primarily a Russian
Beverage Business but is nevertheless engaged in a Russian Beverage Business, or (iii) a Russian
business which is primarily a Russian Beverage Business, provided that in the case of (i), (ii) or
(iii) PepsiCo has, as soon as practicable and in good faith, offered the Company the right to
purchase the Russian Beverage Business (or that part of the target business which is a Russian
Beverage Business) and if the Company declines such offer, then PepsiCo may acquire and operate
such Russian Beverage Business independently of the Company without being in breach of this Section
11.02 (b), it being understood that the closing of an acquisition under (iii) shall cause the
dissolution of the Company pursuant to Section 10.01(f).

39

 

ARTICLE XII

MISCELLANEOUS

     Section 12.01 Partial Invalidity. In case any one or more of the covenants,
agreements, or provisions hereof shall be invalid, illegal, or unenforceable in any respect, the
validity of the remaining covenants, agreements, or provisions hereof shall be in no way affected,
prejudiced, or disturbed thereby.

     Section 12.02 Notices. Except as otherwise provided herein, all notices or other communications required or permitted
to be given hereunder shall be in writing, shall be given by recorded delivery, or personally
delivered with confirmation of delivery obtained, and shall be deemed to have been duly given when
received at the address specified below:

If to PBG Ireland:

Kilnagleary, Carrigaline, Co.

Cork, Ireland

Attn: President

With a copy to:

The Pepsi Bottling Group

1 Pepsi Way

Somers, NY 10589

Attn: General Counsel

If to PepsiCo Ireland:

Second Floor, Williams House

20 Reid Street,

Hamilton HM12

Bermuda

Attn: Director

With a copy to:

PepsiCo, Inc.

700 Anderson Hill Road

Purchase, NY 10577

Attn: International Counsel

40

 

Any Member shall have the right to change its address for notice hereunder from time to time to
such other address as may hereafter be furnished in writing by such Member to the other Members.

     Section 12.03 Amendment. This Agreement may be modified or amended at any time only upon the unanimous consent of the
Members, which shall be evidenced by the Members executing a writing effecting such amendment.

     Section 12.04 Consents; Waivers. No consent or waiver, express or implied, by the
Company or any Member to or of any breach or default by any Member in the performance by such
Member of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of
any other breach or default in the performance by such Member hereunder. Failure on the part of
the Company or the other Members to complain of any act or failure to act of the other Member or to
declare the other Members in default, irrespective of how long such failure continues, shall not
constitute a waiver by the Company or such Members of the rights of the Company or such Member
hereunder.

     Section 12.05 Choice of Law and Forum. This Agreement and all rights and liabilities
of the Members hereunder shall be subject to and governed by the substantive laws (and not the
choice of law rules) of the State of New York, United States notwithstanding the conflict of laws
rules thereof, and any disputes arising hereunder or relating to this Agreement shall be submitted
to the exclusive jurisdiction of the United States District Court for the Southern District of New
York.

     Section 12.06 Multiple Counterparts. This Agreement may be executed and acknowledged
in multiple counterparts, each of which shall be an original, but all of which shall be and
constitute one instrument.

     Section 12.07 Entire Agreement. This Agreement, including all Exhibits, Schedules and
Appendices, constitutes the entire agreement between the parties with respect to the subject

41

 

matter hereof. This Agreement supersedes any prior agreement or understanding among the parties, written
or oral, and may not be modified or amended in any manner other than as set forth herein.

     Section 12.08 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and the Members. No assignment of rights or delegation of
duties arising under this Agreement may be made by any party hereto except as otherwise provided
herein.

     Section 12.09 No Third-Party Beneficiaries. This Agreement is for the sole benefit of
the Members and their permitted assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the Members and such assigns, any legal or equitable
rights hereunder.

     Section 12.10 Expenses. (a) Each of the parties hereto shall pay the fees and
expenses of its respective counsel, accountants and other experts (including any broker, finder,
advisor or intermediary) and shall pay all other expenses incurred by it in connection with the
negotiation, preparation and execution of this Agreement and the consummation of the transactions
contemplated hereby.

     Section 12.11 Press Releases. Each of the Members hereby agrees that, except as
otherwise required by law or stock exchange regulations, any press release or other public
announcement regarding the transactions contemplated by this Agreement or the business and/or
operations of the Company shall be made only with the mutual consent of the Members.

[signatures follow on next page]

42

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date
and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	PepsiCo (Ireland) Limited	 	 	 	PBG Beverages Ireland Limited	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ R. Brian Leman
 

	 	 
	 	By:
	 	/s/ Inigo Madariaga
 

	 	 
	Name: R. Brian Leman	 	 	 	Name: Inigo Madariaga	 	 
	Title: Director	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PR Beverages Limited	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Andrew Mulhall
 

	 	 
	 	 	 	 	 	 
	Name: Andrew Mulhall	 	 	 	 	 	 	 	 
	Title: Director	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Acknowledged:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PepsiCo, Inc.	 	 	 	The Pepsi Bottling Group, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael D. White
 

	 	 	 	By:
	 	/s/ David Yawman
 

	 	 
	Name: Michael D. White	 	 	 	Name: David Yawman	 	 
	Title: CEO, PepsiCo International,	 	 	 	Title: Vice President, Assistant	 	 
	 

	      Vice Chairman, PepsiCo, Inc.
	 	 	 	 	      General Counsel	 

43

 

Schedule A – Percentage Interests

PBG Ireland: 60%

PepsiCo Ireland: 40%

44

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