Document:

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                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY

                                  $250,000,000

                               BOTTLING GROUP, LLC

                      4 1/8% SENIOR NOTES DUE JUNE 15, 2015

                          REGISTRATION RIGHTS AGREEMENT

                                                                   June 10, 2003

J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Banc of America Securities LLC
Citigroup Global Markets Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Blaylock & Partners, L.P.
Fleet Securities, Inc.
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017-6000

      Lehman Brothers Inc.
      745 Seventh Avenue
      New York, New York  10019

Ladies and Gentlemen:

         Bottling Group, LLC, a Delaware limited liability company (the
"ISSUER"), proposes to issue and sell to J.P. Morgan Securities Inc., Lehman
Brothers Inc., Banc of America Securities LLC, Citigroup Global Markets Inc.,
Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc., Blaylock
& Partners, L.P., Fleet Securities, Inc. (collectively, the "INITIAL
PURCHASERS"), upon the terms set forth in a purchase agreement of even date
herewith (the "PURCHASE AGREEMENT"), $250,000,000 aggregate principal amount of
its 4 1/8% Senior Notes due June 15, 2015 (the "INITIAL NOTES"), which will be
issued pursuant to an Indenture (the "INDENTURE") to be entered into between the
Issuer and JPMorgan Chase Bank, as trustee (the "TRUSTEE"). As an inducement to
the Initial Purchasers to enter into the Purchase Agreement, the Issuer agrees
with the Initial Purchasers, for the benefit of the Initial Purchasers and the

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holders of the Initial Notes (including, without limitation, the Initial
Purchasers), the Exchange Notes (as defined below) and the Private Exchange
Notes (as defined below) (collectively, the "HOLDERS"), as follows:

         1. Registered Exchange Offer. The Issuer shall, at its own cost
(subject to the provisions of Section 4), prepare and, not later than 135 days
(or, if the 135th day is not a business day, the first business day thereafter,
such day being a "FILING DEADLINE") after the date of original issuance of the
Initial Notes (the "CLOSING DATE"), file with the Securities and Exchange
Commission (the "COMMISSION") a registration statement (together with all
amendments and supplements thereto, including post-effective amendments, in each
case including the prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein, the "EXCHANGE OFFER REGISTRATION
STATEMENT") on an appropriate form under the United States Securities Act of
1933, as amended (the "SECURITIES ACT"), with respect to a proposed offer (the
"REGISTERED EXCHANGE OFFER") to the Holders of Transfer Restricted Securities
(as defined in Section 6), who are not prohibited by any law or policy of the
Commission from participating in the Registered Exchange Offer, to issue and
deliver to such Holders, in exchange for the Initial Notes, a like aggregate
principal amount of debt securities of the Issuer issued under the Indenture,
and identical in all material respects to the Initial Notes (except for the
transfer restrictions relating to the Initial Notes and the provisions relating
to the matters described in Section 6) that would be registered under the
Securities Act (the "EXCHANGE NOTES"). The Exchange Notes will be issued under
the Indenture. The Issuer shall use its best efforts to (i) cause such Exchange
Offer Registration Statement to become effective under the Securities Act no
later than the 195th day (or, if the 195th day is not a business day, the first
business day thereafter, such day being an "EFFECTIVENESS DEADLINE") after the
Closing Date and (ii) keep the Exchange Offer Registration Statement effective
for not less than 30 days (or longer, if required by applicable law) after the
date notice of the Registered Exchange Offer is mailed to the Holders (such
period being called the "EXCHANGE OFFER REGISTRATION PERIOD").

         If the Issuer commences the Registered Exchange Offer, the Issuer (i)
will be entitled to consummate the Registered Exchange Offer 30 days after such
commencement (provided that the Issuer has accepted all the Initial Notes
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer) and (ii) will be required to consummate the Registered Exchange
Offer no later than 40 days after the date on which the Exchange Offer
Registration Statement is declared effective (such 40th day being the
"CONSUMMATION DEADLINE").

         Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Issuer shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities electing to exchange the
Initial Notes for Exchange Notes (assuming that such Holder is not an affiliate
of the Issuer within the meaning of the Securities Act, acquires the Exchange
Notes in the ordinary course of such Holder's business and has no arrangements
or understandings with any person to participate in the distribution of the
Exchange Notes and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade such Exchange Notes
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States.

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         The Issuer acknowledges that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Initial Notes, acquired for its own account as a result of
market making activities or other trading activities, for the Exchange Notes (an
"EXCHANGING DEALER"), is required to deliver a prospectus containing the
information substantially as set forth in (a) Annex A hereto on the cover, (b)
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, and (c) Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Notes received by such Exchanging Dealer pursuant to the Registered
Exchange Offer (except that the language of such information may be
appropriately modified to comply with the "plain English" rules of the
Commission) and (ii) an Initial Purchaser that elects to sell Securities (as
defined below) acquired in exchange for Initial Notes constituting any portion
of an unsold allotment, is required to deliver a prospectus containing the
information required by Item 507 or 508 of Regulation S-K under the Securities
Act, as applicable, in connection with such sale.

         The Issuer shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein (insofar as the required information relates to it), in order
to permit such prospectus to be lawfully delivered by all persons subject to the
prospectus delivery requirements of the Securities Act for such period of time
as such persons must comply with such requirements in order to resell the
Exchange Notes; provided, however, that (i) in the case where such prospectus
and any amendment or supplement thereto must be delivered by an Exchanging
Dealer or an Initial Purchaser, such period shall end on the earlier of 180 days
from the consummation of the Registered Exchange Offer and the date on which all
Exchanging Dealers and the Initial Purchasers have sold all Exchange Notes held
by them (unless such period is extended pursuant to Section 3(j)) and (ii) the
Issuer shall make such prospectus and any amendment or supplement thereto
available to any broker-dealer for use in connection with any resale of any
Exchange Notes for a period of not less than 180 days after the consummation of
the Registered Exchange Offer.

         If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Initial Notes acquired by it as part of its initial
distribution, the Issuer, simultaneously with the delivery of the Exchange Notes
pursuant to the Registered Exchange Offer, shall issue and deliver to such
Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "PRIVATE EXCHANGE") for the Initial Notes held by such Initial
Purchaser, a like principal amount of debt securities of the Issuer issued under
the Indenture, and identical in all material respects to the Initial Notes
(except for the existence of restrictions on transfer under the Securities Act
and the securities laws of the several states of the United States and excluding
provisions relating to the matters described in Section 6) (the "PRIVATE
EXCHANGE NOTES"). The Initial Notes, the Exchange Notes and the Private Exchange
Notes are herein collectively called the "SECURITIES."

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         In connection with the Registered Exchange Offer, the Issuer shall:

                  (a) mail to each Holder a copy of the prospectus forming part
         of the Exchange Offer Registration Statement, together with an
         appropriate letter of transmittal and related documents;

                  (b) keep the Registered Exchange Offer open for not less than
         30 days (or longer, if required by applicable law) after the date
         notice thereof is mailed to the Holders;

                  (c) utilize the services of a depositary for the Registered
         Exchange Offer with an address in the Borough of Manhattan, The City of
         New York, which may be the Trustee or an affiliate of the Trustee;

                  (d) permit Holders to withdraw tendered Securities at any time
         prior to the close of business, New York time, on the last business day
         on which the Registered Exchange Offer shall remain open; and

                  (e) each otherwise comply with all applicable laws.

         As soon as practicable after the close of the Registered Exchange Offer
or the Private Exchange, as the case may be, the Issuer shall:

                  (x) accept for exchange all the Initial Notes validly tendered
         and not withdrawn pursuant to the Registered Exchange Offer and the
         Private Exchange;

                  (y) deliver to the Trustee for cancellation all the Initial
         Notes so accepted for exchange; and

                  (z) cause the Trustee to authenticate and deliver promptly to
         each Holder, the Exchange Notes or Private Exchange Notes, as the case
         may be, equal in principal amount to the Initial Notes of such Holder
         so accepted for exchange.

         The Indenture will provide that the Exchange Notes will not be subject
to the transfer restrictions set forth in the Indenture and that all the
Securities will vote and consent together on all matters as one class and that
none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.

         Interest on each Exchange Note and Private Exchange Note issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Initial Notes surrendered in exchange therefor or, if no interest has been paid
on the Initial Notes, from the date of original issue of the Initial Notes.

         Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Issuer that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Notes received by such Holder will be
acquired in the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any person to participate in the

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distribution of the Securities or the Exchange Notes within the meaning of the
Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405
of the Securities Act, of the Issuer or if it is an affiliate, such Holder will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Notes and (v) if such Holder is a broker-dealer,
that it will receive Exchange Notes for its own account in exchange for Initial
Notes that were acquired as a result of market-making activities or other
trading activities and that it will be required to acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes.

         Notwithstanding any other provisions hereof, the Issuer will ensure
that (i) any Exchange Offer Registration Statement complies in all material
respects with the Securities Act, the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") and the respective rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except for statements or omissions made in
reliance upon, and in conformity with information furnished to the Issuer by or
on behalf of the Holders ("HOLDERS' INFORMATION") and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except for the Holders' Information.

         2. Shelf Registration. If (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Issuer is
not permitted to effect a Registered Exchange Offer, as contemplated by Section
1, (ii) the Exchange Offer Registration Statement is not declared effective no
later than the 195th day after the Closing Date, (iii) any Initial Purchaser so
requests with respect to the Initial Notes (or the Private Exchange Notes) not
eligible to be exchanged for Exchange Notes in the Registered Exchange Offer and
held by it following consummation of the Registered Exchange Offer, (iv) any
Holder (other than an Exchanging Dealer) is not eligible to participate in the
Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer, such
Holder does not receive freely tradeable Exchange Notes on the date of the
exchange or (v) the Issuer elects, then the Issuer shall take the following
actions:

                  (a) The Issuer shall, at its cost (subject to Section 4), as
         promptly as practicable (but in no event more than 30 days after so
         required or requested pursuant to this Section 2) file with the
         Commission and thereafter shall use its best efforts to cause to be
         declared effective a registration statement (together with all
         amendments and supplements thereto, including post-effective
         amendments, in each case including the prospectus contained therein,
         all exhibits thereto and all documents incorporated by reference
         therein, the "SHELF REGISTRATION STATEMENT" and, together with the
         Exchange Offer Registration Statement, a "REGISTRATION STATEMENT") on
         an appropriate form under the Securities Act relating to the offer and
         sale of the Transfer Restricted Securities by the Holders thereof from
         time to time in accordance with the methods of distribution set forth
         in the Shelf

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         Registration Statement and Rule 415 under the Securities Act (the
         "SHELF REGISTRATION"); provided, however, that no Holder (other than an
         Initial Purchaser) shall be entitled to have the Securities held by it
         covered by such Shelf Registration Statement unless such Holder agrees
         in writing to be bound by all the provisions of this Agreement
         applicable to such Holder.

                  (b) The Issuer shall use its best efforts to keep the Shelf
         Registration Statement continuously effective in order to permit the
         prospectus included therein to be lawfully delivered by the Holders of
         the relevant Securities, for a period of two years (or for such longer
         period if extended pursuant to Section 3(j)) from the date of its
         effectiveness or such shorter period that will terminate when all the
         Securities covered by the Shelf Registration Statement (i) have been
         sold pursuant thereto or (ii) are no longer restricted securities (as
         defined in Rule 144 under the Securities Act, or any successor rule
         thereof). The Issuer shall be deemed not to have used its best efforts
         to keep the Shelf Registration Statement effective during the requisite
         period if it voluntarily takes any action that would result in Holders
         of Securities covered thereby not being able to offer and sell such
         Securities during that period, unless such action is required by
         applicable law.

                  (c) Notwithstanding any other provisions of this Agreement to
         the contrary, the Issuer shall cause the Shelf Registration Statement
         and the related prospectus and any amendment or supplement thereto, as
         of the effective date of the Shelf Registration Statement or any
         amendment thereto or the date of any supplement, (i) to comply in all
         material respects with the applicable requirements of the Securities
         Act, the Exchange Act and the rules and regulations of the Commission
         and (ii) not to contain any untrue statement of a material fact or omit
         to state a material fact required to be stated therein or necessary in
         order to make the statements therein, in light of the circumstances
         under which they were made, not misleading, other than with respect to
         the Holders' Information.

         3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 and, to the extent applicable, any Registered Exchange
Offer contemplated by Section 1, the following provisions shall apply:

                  (a) The Issuer shall use its reasonable best efforts to (i)
         furnish to each Initial Purchaser, prior to the filing thereof with the
         Commission, a copy of the Registration Statement and each amendment
         thereof and each supplement, if any, to the prospectus included therein
         and, in the event that an Initial Purchaser (with respect to any
         portion of an unsold allotment from the original offering) is
         participating in the Registered Exchange Offer or the Shelf
         Registration Statement, the Issuer shall use its reasonable best
         efforts to reflect in each such document, when so filed with the
         Commission, such comments as such Initial Purchaser reasonably may
         propose; (ii) include the information set forth in Annex A hereto on
         the cover, in Annex B hereto in the "Exchange Offer Procedures" section
         and the "Purpose of the Exchange Offer" section and in Annex C hereto
         in the "Plan of Distribution" section of the prospectus forming a part
         of the Exchange Offer Registration Statement (except that the language
         of such information may be appropriately modified to comply with the
         "plain English" rules of the

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         Commission) and include the information set forth in Annex D hereto in
         the Letter of Transmittal delivered pursuant to the Registered Exchange
         Offer; (iii) if requested by an Initial Purchaser, include the
         information required by Item 507 or 508 of Regulation S-K under the
         Securities Act, as applicable, in the prospectus forming a part of the
         Exchange Offer Registration Statement; (iv) include within the
         prospectus contained in the Exchange Offer Registration Statement a
         section entitled "Plan of Distribution," reasonably acceptable to the
         Initial Purchasers, which shall contain a summary statement of the
         positions taken or policies made by the staff of the Commission with
         respect to the potential "underwriter" status of any broker-dealer that
         is the beneficial owner (as defined in Rule 13d-3 under the Exchange
         Act) of Exchange Notes received by such broker-dealer in the Registered
         Exchange Offer (a "PARTICIPATING BROKER-DEALER"), whether such
         positions or policies have been publicly disseminated by the staff of
         the Commission or such positions or policies, in the reasonable
         judgment of the Initial Purchasers based upon advice of counsel (which
         may be in-house counsel), represent the prevailing views of the staff
         of the Commission; and (v) in the case of a Shelf Registration
         Statement, include the names of the Holders who propose to sell
         Securities pursuant to the Shelf Registration Statement as selling
         securityholders.

                  (b) The Issuer shall advise each of the Initial Purchasers,
         the Holders of the Securities and any Participating Broker-Dealer from
         which the Issuer has received prior written notice that it will be a
         Participating Broker-Dealer in the Registered Exchange Offer (which
         notice pursuant to clauses (ii) to (v) below shall be accompanied by an
         instruction to suspend the use of the prospectus until the requisite
         changes have been made) and, if requested by such person, confirm such
         advice in writing:

                           (i) when any Registration Statement or any amendment
                  thereto has been filed with the Commission and when such
                  Registration Statement or any post-effective amendment thereto
                  has become effective;

                           (ii) of any request by the Commission for amendments
                  or supplements to any Registration Statement or the prospectus
                  included therein or for additional information;

                           (iii) if known to the Issuer, of the issuance by the
                  Commission of any stop order suspending the effectiveness of
                  the Registration Statement or the initiation of any
                  proceedings for that purpose;

                           (iv) of the receipt by the Issuer or its legal
                  counsel of any notification with respect to the suspension of
                  the qualification of the Securities for sale in any
                  jurisdiction or the initiation or threatening of any
                  proceeding for such purpose; and

                           (v) of the happening of any event that requires the
                  Issuer to make changes in any Registration Statement or the
                  prospectus included therein in order that such Registration
                  Statement or the prospectus included therein do not contain an
                  untrue statement of a material fact nor omit to state a
                  material fact required to be stated

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                  therein or necessary to make the statements therein (in the
                  case of the prospectus, in light of the circumstances under
                  which they were made) not misleading.

                  (c) The Issuer shall make every reasonable effort to obtain
         the withdrawal at the earliest possible time, of any order suspending
         the effectiveness of any Registration Statement.

                  (d) The Issuer shall furnish to each Holder of Securities
         included within the coverage of any Shelf Registration, without charge,
         at least one conformed copy of the Shelf Registration Statement and any
         post-effective amendment thereto, including financial statements and
         schedules, and, if any such Holder so requests in writing, all exhibits
         thereto (including those, if any, incorporated by reference).

                  (e) The Issuer shall deliver to each Exchanging Dealer and
         each Initial Purchaser, and to any other Holder who so requests,
         without charge, at least one conformed copy of the Exchange Offer
         Registration Statement and any post-effective amendment thereto,
         including financial statements and schedules, and, if any Initial
         Purchaser or any such Holder requests, all exhibits thereto (including
         those incorporated by reference).

                  (f) The Issuer shall, during the Shelf Registration Period,
         deliver to each Holder of Securities included within the coverage of
         the Shelf Registration, without charge, as many copies of the
         prospectus (including each preliminary prospectus) included in the
         Shelf Registration Statement and any amendment or supplement thereto as
         such person may reasonably request. The Issuer consents, subject to the
         provisions of this Agreement, to the use of such prospectus or any
         amendment or supplement thereto by each of the selling Holders of the
         Securities in connection with the offering and sale of the Securities
         covered by such prospectus, or any amendment or supplement thereto,
         included in the Shelf Registration Statement.

                  (g) The Issuer shall deliver to each Initial Purchaser, any
         Exchanging Dealer, any Participating Broker-Dealer and such other
         persons required to deliver a prospectus following the Registered
         Exchange Offer, without charge, as many copies of the final prospectus
         included in the Exchange Offer Registration Statement and any amendment
         or supplement thereto as such persons may reasonably request. The
         Issuer consents, subject to the provisions of this Agreement, to the
         use of such prospectus or any amendment or supplement thereto by any
         Initial Purchaser, if necessary, any Participating Broker-Dealer and
         such other persons required to deliver a prospectus following the
         Registered Exchange Offer in connection with the offering and sale of
         the Exchange Notes covered by such prospectus, or any amendment or
         supplement thereto, included in such Exchange Offer Registration
         Statement.

                  (h) Prior to any public offering of the Securities pursuant to
         any Registration Statement, the Issuer shall use its reasonable best
         efforts to register or qualify or cooperate with the Holders of the
         Securities included therein and their respective counsel in connection
         with the registration or qualification of the Securities for offer and
         sale under the securities or "blue sky" laws of such United States
         jurisdictions as any Holder

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         of the Securities reasonably requests in writing and do any and all
         other acts or things necessary or advisable to enable the offer and
         sale in such jurisdictions of the Securities covered by such
         Registration Statement; provided, however, that the Issuer shall not be
         required to (i) qualify generally to do business in any jurisdiction
         where it is not then so qualified or (ii) take any action which would
         subject it to general service of process or to taxation in any
         jurisdiction where it is not then so subject; and, provided, further
         that the Issuer shall not be required to pay any expenses in connection
         therewith after the effective date of any applicable Registration
         Statement.

                  (i) The Issuer shall cooperate with the Holders of the
         Securities to facilitate the timely preparation and delivery of
         certificates representing the Securities to be sold pursuant to any
         Registration Statement free of any restrictive legends and in such
         denominations and registered in such names as the Holders may request
         in writing a reasonable period of time prior to sales of the Securities
         pursuant to such Registration Statement.

                  (j) Upon the occurrence of any event contemplated by
         paragraphs (ii) through (v) of Section 3(b) during the period for which
         the Issuer is required to maintain an effective Registration Statement,
         the Issuer shall promptly prepare and file a post-effective amendment
         to the Registration Statement or a supplement to the related prospectus
         and any other required document so that, as thereafter delivered to
         Holders of the Securities or purchasers of Securities, such prospectus
         will not contain an untrue statement of a material fact or omit to
         state any material fact required to be stated therein or necessary to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading. If the Issuer notifies the Initial
         Purchasers, the Holders of the Securities and any known Participating
         Broker-Dealer in accordance with clauses (ii) to (v) of Section 3(b) to
         suspend the use of such prospectus until the requisite changes to the
         prospectus have been made, then the Initial Purchasers, the Holders of
         the Securities and any such Participating Broker-Dealers shall suspend
         use of such prospectus, and the period of effectiveness of the Shelf
         Registration Statement provided for in Section 2(b) above and the
         Exchange Offer Registration Statement provided for in Section 1 above
         shall each be extended by the number of days from and including the
         date of the giving of such notice to and including the date when the
         Initial Purchasers, the Holders of the Securities and any known
         Participating Broker-Dealer shall have received such amended or
         supplemented prospectus pursuant to this Section 3(j).

                  (k) Not later than the effective date of the applicable
         Registration Statement, the Issuer will provide CUSIP and ISIN numbers
         for the Initial Notes, the Exchange Notes or the Private Exchange
         Notes, as the case may be, and provide the applicable trustee with
         printed certificates for the Initial Notes, the Exchange Notes or the
         Private Exchange Notes, as the case may be, in a form eligible for
         deposit with The Depository Trust Company.

                  (l) The Issuer will comply with all rules and regulations of
         the Commission to the extent and so long as they are applicable to the
         Registered Exchange Offer or the Shelf Registration and will make
         generally available to its members or security holders (or

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         otherwise provide in accordance with Section 11(a) of the Securities
         Act) an earnings statement satisfying the provisions of Section 11(a)
         of the Securities Act, no later than 45 days after the end of a
         12-month period (or 90 days, if such period is a fiscal year) beginning
         with the first month of the Issuer's first fiscal quarter commencing
         after the effective date of the Registration Statement, which statement
         shall cover such 12-month period.

                  (m) The Issuer shall cause the Indenture to be qualified under
         the Trust Indenture Act of 1939, as amended, in a timely manner and
         containing such changes, if any, as shall be necessary for such
         qualification. In the event that such qualification would require the
         appointment of a new trustee under the Indenture, the Issuer shall
         appoint a new trustee thereunder pursuant to the applicable provisions
         of the Indenture.

                  (n) The Issuer may require each Holder of Securities to be
         sold pursuant to the Shelf Registration Statement to furnish to the
         Issuer such information regarding the Holder and the distribution of
         such Securities as the Issuer may from time to time reasonably require
         for inclusion in such Shelf Registration Statement, and the Issuer may
         exclude from such registration the Securities of any Holder that
         unreasonably fails to furnish such information within a reasonable time
         after receiving such request.

                  (o) The Issuer shall enter into such customary agreements
         (including, if requested, an underwriting agreement in customary form)
         and take all such other action, if any, as Holders of a majority in
         aggregate principal amount of the Securities being sold or the managing
         underwriters, if any, shall reasonably request in order to facilitate
         the disposition of the Securities pursuant to any Shelf Registration.

                  (p) In the case of any Shelf Registration, the Issuer shall
         (i) make reasonably available for inspection by one or more
         representatives of, and Special Counsel (as defined below) acting for,
         Holders of a majority in aggregate principal amount of the Securities
         being sold and, any underwriter participating in any disposition
         pursuant to such Shelf Registration Statement all relevant financial
         and other records, pertinent corporate documents and properties of the
         Issuer and (ii) cause the Issuer's managing directors, officers,
         in-house counsel, employees, accountants and auditors to supply all
         relevant information reasonably requested by such representatives,
         Special Counsel or any such underwriter (each, an "INSPECTOR") in
         connection with such Shelf Registration Statement, in each case, as
         shall be reasonably necessary to enable such Inspector, to conduct a
         reasonable investigation within the meaning of Section 11 of the
         Securities Act; provided, however, that the foregoing inspection and
         information gathering shall be coordinated on behalf of the Holders and
         on behalf of the other parties, by one counsel designated by and on
         behalf of such other parties as described in Section 4.

                  (q) In the case of any Shelf Registration, the Issuer, if
         requested by Holders of a majority in aggregate principal amount of
         Securities being sold or the managing underwriters, if any, shall use
         its reasonable best efforts to cause (i) its counsel (which may be
         in-house counsel) to deliver an opinion relating to the Securities in
         customary form; (ii) its officers to execute and deliver all customary
         documents and certificates and

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         updates thereof requested by the managing underwriters of the
         applicable Securities and (iii) its independent public accountants and
         the independent public accountants with respect to any other entity for
         which financial information is provided in the Registration Statement
         (as a result of such entity's relationship with the Issuer) to provide
         a comfort letter in customary form, subject to receipt of appropriate
         documentation as contemplated, and only if permitted, by Statement of
         Auditing Standards No. 72.

                  (r) In the case of the Registered Exchange Offer, if requested
         by any Initial Purchaser or any known Participating Broker-Dealer, the
         Issuer shall use its reasonable best efforts to cause (i) its counsel
         to deliver to such Initial Purchaser or such Participating
         Broker-Dealer a signed opinion in customary form and (ii) its
         independent public accountants and the independent public accountants
         with respect to any other entity for which financial information is
         provided in the Registration Statement (as a result of such entity's
         relationship with the Issuer) to deliver to such Initial Purchaser or
         such Participating Broker-Dealer a comfort letter, in customary form.

                  (s) If a Registered Exchange Offer or a Private Exchange is to
         be consummated, upon delivery of the Initial Notes by Holders to the
         Issuer (or to such other Person as directed by the Issuer) in exchange
         for the Exchange Notes or the Private Exchange Notes, as the case may
         be, the Issuer shall mark, or caused to be marked, on the Initial Notes
         so exchanged that such Initial Notes are being canceled in exchange for
         the Exchange Notes or the Private Exchange Notes, as the case may be;
         in no event shall the Initial Notes be marked as paid or otherwise
         satisfied.

                  (t) The Issuer will use its reasonable best efforts to (i) if
         the Initial Notes have been rated prior to the initial sale of such
         Initial Notes, confirm such ratings will apply to the Securities
         covered by a Registration Statement, or (ii) if the Initial Notes were
         not previously rated, cause the Securities covered by a Registration
         Statement to be rated with the appropriate rating agencies, if so
         requested by Holders of a majority in aggregate principal amount of
         Securities covered by such Registration Statement, or by the managing
         underwriters, if any.

                  (u) In the event that any broker-dealer registered under the
         Exchange Act shall underwrite any Securities or participate as a member
         of an underwriting syndicate or selling group or "assist in the
         distribution" (within the meaning of the Conduct Rules (the "RULES") of
         the National Association of Securities Dealers, Inc. ("NASD")) thereof,
         whether as a Holder of such Securities or as an underwriter, a
         placement or sales agent or a broker or dealer in respect thereof, or
         otherwise, the Issuer will assist such broker-dealer in complying with
         the requirements of such Rules, including, without limitation, by (i)
         if such Rules, including Rule 2720, shall so require, engaging a
         "qualified independent underwriter" (as defined in Rule 2720) to
         participate in the preparation of the Registration Statement relating
         to such Securities, to exercise usual standards of due diligence in
         respect thereto and, if any portion of the offering contemplated by
         such Registration Statement is an underwritten offering or is made
         through a placement or sales agent, to recommend the yield of such
         Securities, (ii) indemnifying any such qualified independent
         underwriter to the extent of the indemnification of underwriters

                                       11

<PAGE>

         provided in Section 5 and (iii) providing such information to such
         broker-dealer as may be required in order for such broker-dealer to
         comply with the requirements of the Rules.

                  (v) The Issuer shall use its reasonable best efforts to take
         all other steps necessary to effect the registration of the Securities
         covered by a Registration Statement contemplated hereby.

4. Registration Expenses. The Issuer shall bear all fees and expenses incurred
in connection with the performance of the Issuer's obligations under Sections 1
through 3 (including the reasonable fees and expenses, if any, of Cleary,
Gottlieb, Steen & Hamilton, counsel for the Holders, incurred in connection with
the Registered Exchange Offer) and in the event of a Shelf Registration, the
Issuer shall bear or reimburse the Holders of the Securities covered thereby for
the reasonable fees and disbursements of one firm of counsel, which shall be
counsel for the Initial Purchasers unless the Holders of a majority in principal
amount of the Securities covered thereby otherwise so designate (the "SPECIAL
COUNSEL") to act as counsel for the Holders of the Securities in connection
therewith.

5.  Indemnification.

                  (a) The Issuer agrees to indemnify and hold harmless each
         Holder of the Securities, any Participating Broker-Dealer and each
         person, if any, who controls such Holder or such Participating
         Broker-Dealer within the meaning of the Securities Act or the Exchange
         Act (each Holder, any Participating Broker-Dealer and such controlling
         persons are referred to collectively as the "INDEMNIFIED PARTIES") from
         and against any losses, claims, damages or liabilities, joint or
         several, or any actions in respect thereof (including, but not limited
         to, any losses, claims, damages, liabilities or actions relating to
         purchases and sales of the Securities) to which each Indemnified Party
         may become subject under the Securities Act, the Exchange Act or
         otherwise, insofar as such losses, claims, damages, liabilities or
         actions arise out of or are based upon any untrue statement or alleged
         untrue statement of a material fact contained in a Registration
         Statement or prospectus or in any amendment or supplement thereto or in
         any preliminary prospectus relating to a Shelf Registration, or arise
         out of, or are based upon, the omission or alleged omission to state
         therein a material fact required to be stated therein or necessary in
         order to make the statements therein, in light of the circumstances
         under which they were made, not misleading, and shall reimburse, as
         incurred, the Indemnified Parties for any legal or other expenses
         reasonably incurred by them in connection with investigating or
         defending any such loss, claim, damage, liability or action in respect
         thereof; provided, however, that (i) the Issuer shall not be liable in
         any such case to the extent that such loss, claim, damage or liability
         arises out of or is based upon any untrue statement or alleged untrue
         statement or omission or alleged omission made in a Registration
         Statement or prospectus or in any amendment or supplement thereto or in
         any preliminary prospectus relating to a Shelf Registration in reliance
         upon and in conformity with any Holders' Information and (ii) with
         respect to any untrue statement or omission or alleged untrue statement
         or omission made in any preliminary prospectus relating to a Shelf
         Registration Statement, the indemnity agreement contained in this
         subsection (a) shall not inure to the benefit of any Holder or
         Participating Broker-Dealer (or any person controlling such

                                       12

<PAGE>

         Holder or Participating Broker-Dealer) from whom the person asserting
         any such losses, claims, damages or liabilities purchased the
         Securities concerned, to the extent that a prospectus relating to such
         Securities was required to be delivered by such Holder or Participating
         Broker-Dealer under the Securities Act in connection with such purchase
         and any such loss, claim, damage or liability of such Holder or
         Participating Broker-Dealer results from the fact that there was not
         sent or given to such person, at or prior to the written confirmation
         of the sale of such Securities to such person, a copy of the final
         prospectus if the Issuer has previously furnished copies thereof to
         such Holder or Participating Broker-Dealer; provided further, however,
         that this indemnity agreement will be in addition to any liability
         which the Issuer may otherwise have to such Indemnified Party. The
         Issuer shall also indemnify underwriters, their officers and directors
         and each person who controls such underwriters within the meaning of
         the Securities Act or the Exchange Act to the same extent as provided
         above with respect to the indemnification of the Holders of the
         Securities if requested by such Holders.

                  (b) Each Holder of the Securities, severally and not jointly,
         will indemnify and hold harmless the Issuer, its managing directors and
         officers and each person, if any, who controls the Issuer within the
         meaning of the Securities Act or the Exchange Act from and against any
         losses, claims, damages or liabilities or any actions in respect
         thereof, to which the Issuer or any such controlling person may become
         subject under the Securities Act, the Exchange Act or otherwise,
         insofar as such losses, claims, damages, liabilities or actions arise
         out of or are based upon any untrue statement or alleged untrue
         statement of a material fact contained in a Registration Statement or
         prospectus or in any amendment or supplement thereto or in any
         preliminary prospectus relating to a Shelf Registration, or arise out
         of or are based upon the omission or alleged omission to state therein
         a material fact necessary to make the statements therein not
         misleading, but in each case only to the extent that the untrue
         statement or omission or alleged untrue statement or omission was made
         in reliance upon and in conformity with written information pertaining
         to such Holder and furnished to the Issuer by or on behalf of such
         Holder specifically for inclusion therein; and, subject to the
         limitation set forth immediately preceding this clause, shall
         reimburse, as incurred, the Issuer for any legal or other expenses
         reasonably incurred by the Issuer or any such controlling person in
         connection with investigating or defending any loss, claim, damage,
         liability or action in respect thereof. This indemnity agreement will
         be in addition to any liability which such Holder may otherwise have to
         the Issuer or any of its controlling persons.

                  (c) Promptly after receipt by an indemnified party under this
         Section 5 of notice of the commencement of any action, such indemnified
         party will, if a claim in respect thereof is to be made against the
         indemnifying party under subsection (a) or (b) above, notify the
         indemnifying party of the commencement thereof; provided that, the
         failure to notify the indemnifying party shall not relieve it from any
         liability that it may have under subsection (a) or (b) above, except to
         the extent that it has been materially prejudiced (through the
         forfeiture of substantive rights or defenses) by such failure; and
         provided, further, that the failure to notify the indemnifying party
         shall not relieve it from any liability that it may have to an
         indemnified party otherwise than under subsection (a) or (b) above. In
         case any such action is brought against any indemnified party and it
         notifies

                                       13

<PAGE>

         the indemnifying party of the commencement thereof, the indemnifying
         party will be entitled to participate therein and, to the extent that
         it may wish, jointly with any other indemnifying party similarly
         notified, to assume the defense thereof, with counsel satisfactory to
         such indemnified party (who shall not, except with the consent of the
         indemnified party, be counsel to the indemnifying party), and after
         notice from the indemnifying party to such indemnified party of its
         election so to assume the defense thereof, the indemnifying party will
         not be liable to such indemnified party under this Section for any
         legal or other expenses subsequently incurred by such indemnified party
         in connection with the defense thereof other than reasonable costs of
         investigation. No indemnifying party shall, without the prior written
         consent of the indemnified party, effect any settlement of any pending
         or threatened action in respect of which any indemnified party is or
         could have been a party and indemnity could have been sought hereunder
         by such indemnified party unless such settlement includes an
         unconditional release of such indemnified party from all liability on
         any claims that are the subject matter of such action and does not
         include a statement as to and an admission of fault, culpability or
         failure to act by or on behalf of any indemnified party.

                  (d) If the indemnification provided for in this Section 5 is
         unavailable or insufficient to hold harmless an indemnified party under
         subsections (a) or (b) above, then each indemnifying party shall
         contribute to the amount paid or payable by such indemnified party as a
         result of the losses, claims, damages or liabilities (or actions in
         respect thereof) referred to in subsection (a) or (b) above (i) in such
         proportion as is appropriate to reflect the relative benefits received
         by the Issuer on one hand and the Holders on the other from the
         exchange of the Securities or (ii) if the allocation provided by the
         foregoing clause (i) is not permitted by applicable law, in such
         proportion as is appropriate to reflect not only the relative benefits
         referred to in clause (i) above but also the relative fault of the
         Issuer on the one hand and the Holders on the other in connection with
         the statements or omissions that resulted in such losses, claims,
         damages or liabilities (or actions in respect thereof) as well as any
         other relevant equitable considerations. The relative fault as between
         the Issuer on the one hand and the Holders on the other shall be
         determined by reference to, among other things, whether the untrue or
         alleged untrue statement of a material fact or the omission or alleged
         omission to state a material fact relates to information supplied by
         the Issuer on the one hand and the Holders on the other, and the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent such statement or omission. The
         amount paid by an indemnified party as a result of the losses, claims,
         damages or liabilities referred to in the first sentence of this
         subsection (d) shall be deemed to include any legal or other expenses
         reasonably incurred by such indemnified party in connection with
         investigating or defending any action or claim which is the subject of
         this subsection (d). Notwithstanding any other provision of this
         subsection (d), the Holders of the Securities shall not be required to
         contribute any amount in excess of the amount by which the net proceeds
         received by such Holders from the sale of the Securities pursuant to a
         Registration Statement exceeds the amount of damages which such Holders
         have otherwise been required to pay by reason of such untrue or alleged
         untrue statement or omission or alleged omission. No person guilty of
         fraudulent misrepresentation (within the meaning of Section 11(f) of
         the Securities Act) shall be entitled to contribution from

                                       14

<PAGE>

         any person who was not guilty of such fraudulent misrepresentation. For
         purposes of this subsection (d), each person, if any, who controls such
         indemnified party within the meaning of the Securities Act or the
         Exchange Act shall have the same rights to contribution as such
         indemnified party and each person, if any, who controls the Issuer
         within the meaning of the Securities Act or the Exchange Act shall have
         the same rights to contribution as the Issuer.

                  (e) The agreements contained in this Section 5 shall survive
         the sale of the Securities pursuant to a Registration Statement and
         shall remain in full force and effect, regardless of any termination or
         cancellation of this Agreement or any investigation made by or on
         behalf of any indemnified party.

6.  Additional Interest Under Certain Circumstances.

                  (a) Additional interest (the "ADDITIONAL INTEREST") with
         respect to the Initial Notes and the Private Exchange Notes shall be
         assessed as follows if any of the following events occur (each such
         event in clauses (1) through (3) below being herein called a
         "REGISTRATION DEFAULT"):

                           (1) if by the Filing Deadline, the Exchange Offer
                  Registration Statement has not been filed with the Commission
                  with respect to the Registered Exchange Offer,

                           (2) if by the Effectiveness Deadline, the Exchange
                  Offer Registration Statement has not been declared effective
                  or if by the Consummation Deadline, the Shelf Registration
                  Statement has not been declared effective or the Registered
                  Exchange Offer has not been consummated,

                           (3) if by the Effectiveness Deadline, the Exchange
                  Offer Registration Statement has been declared effective, or
                  if by the Consummation Deadline, the Shelf Registration
                  Statement has been declared effective but:

                                    (a) such registration statements cease to be
                           effective, prior to expiration of the time periods
                           described in Sections 1 and 2, if so required, or

                                    (b) such registration statements cease to be
                           useable in connection with resales of Securities
                           prior to expiration of the time periods described in
                           Sections 1 and 2, if so required,

         Additional Interest shall accrue on the Initial Notes and the Private
         Exchange Notes over and above the interest set forth in the title of
         the Securities from and including the date on which any such
         Registration Default shall occur to but excluding the date on which all
         such Registration Defaults have been cured, at a rate of 0.25% per
         annum (the "ADDITIONAL INTEREST RATE") for the first 90-day period
         immediately following the occurrence of such Registration Default. The
         Additional Interest Rate shall increase by an additional 0.25% per
         annum with respect to each subsequent 90-day period until all

                                       15

<PAGE>

         Registration Defaults have been cured, up to a maximum Additional
         Interest Rate of 0.5% per annum.

                  (b) A Registration Default referred to in Section 6(a)(3)
         shall be deemed not to have occurred and be continuing in relation to a
         Shelf Registration Statement or the related prospectus if (i) such
         Registration Default has occurred solely as a result of (x) the filing
         of a post-effective amendment to such Shelf Registration Statement to
         incorporate annual audited financial information with respect to the
         Issuer where such post-effective amendment is not yet effective and
         needs to be declared effective to permit Holders to use the related
         prospectus or (y) other material events, with respect to the Issuer
         that would need to be described in such Shelf Registration Statement or
         the related prospectus and (ii) in the case of clause (y), the Issuer
         is proceeding promptly and in good faith to amend or supplement such
         Shelf Registration Statement and related prospectus to describe such
         events; provided, however, that in any case if such Registration
         Default occurs for a continuous period in excess of 30 days, Additional
         Interest shall be payable in accordance with the above paragraph from
         the day such Registration Default occurs (without regard to the
         foregoing clauses in this paragraph) until such Registration Default is
         cured.

                  (c) Any amounts of Additional Interest due pursuant to Section
         6(a) above will be payable in the same manner as specified in the
         Indenture for the payment of interest on the Securities on the regular
         interest payment dates with respect to the Securities. The amount of
         Additional Interest will be determined by multiplying the applicable
         Additional Interest rate by the principal amount of the Initial Notes
         or Private Exchange Notes, as the case may be, and further multiplied
         by a fraction, the numerator of which is the number of days such
         Additional Interest rate was applicable during such period (determined
         on the basis of a 360-day year comprised of twelve 30-day months), and
         the denominator of which is 360.

                  (d) "TRANSFER RESTRICTED SECURITIES" means each Security until
         (i) the date on which such Security has been exchanged by a person
         other than a broker-dealer for a freely transferable Exchange Note in
         the Registered Exchange Offer, (ii) following the exchange by a
         broker-dealer in the Registered Exchange Offer of an Initial Note for
         an Exchange Note, the date on which such Exchange Note is sold to a
         purchaser who receives from such broker-dealer on or prior to the date
         of such sale a copy of the prospectus contained in the Exchange Offer
         Registration Statement, (iii) the date on which such Security has been
         effectively registered under the Securities Act and disposed of in
         accordance with the Shelf Registration Statement or (iv) the date on
         which such Security is distributed to the public pursuant to Rule 144
         under the Securities Act or is saleable pursuant to Rule 144(k) under
         the Securities Act.

         7. Rules 144 and 144A. So long as Transfer Restricted Securities remain
outstanding, the Issuer shall use its best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner and, if at any time the Issuer is not required to file such reports, it
will, upon the request of any Holder of Securities, make publicly available such
information necessary to permit sales of its securities pursuant to Rules 144
and 144A. So long

                                       16

<PAGE>

as Transfer Restricted Securities remain outstanding, the Issuer covenants that
it will take such further action as any Holder of Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). So long as Transfer Restricted Securities
remain outstanding, the Issuer will provide a copy of this Agreement to
prospective purchasers of Initial Notes identified to the Issuer by the Initial
Purchasers upon written request. So long as Transfer Restricted Securities
remain outstanding, upon the written request of any Holder of Initial Notes, the
Issuer shall deliver to such Holder a written statement as to whether it has
complied with such requirements. Notwithstanding the foregoing, nothing in this
Section 7 shall be deemed to require the Issuer to register any of its
securities pursuant to the Exchange Act.

         8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("MANAGING UNDERWRITERS") will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering, subject to the consent of
the Issuer (which shall not be unreasonably withheld or delayed), and such
Holders shall be responsible for all underwriting commissions and discounts in
connection therewith.

         No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

9.  Miscellaneous.

                  (a) Remedies. The Issuer acknowledges and agrees that any
         failure by the Issuer to comply with its obligations under Section 1 or
         2 may result in material irreparable injury to the Initial Purchasers
         or the Holders for which there is no adequate remedy at law, that it
         will not be possible to measure damages for such injuries precisely and
         that, in the event of any such failure, the Initial Purchasers or any
         Holder may obtain such relief as may be required to specifically
         enforce the Issuer's obligations under Sections 1 or 2. The Issuer
         further agrees to waive the defense in any action for specific
         performance that a remedy at law would be adequate.

                  (b) Amendments and Waivers. The provisions of this Agreement
         may not be amended, modified or supplemented, and waivers or consents
         to departures from the provisions hereof may not be given, except by
         the Issuer and the written consent of the Holders of a majority in
         principal amount of the Securities affected by such amendment,
         modification, supplement, waiver or consents. Without the consent of
         the Holder of each Security, however, no modification may change the
         provisions relating to the payment of Additional Interest.

                                       17

<PAGE>

                  (c) Notices. All notices and other communications provided for
         or permitted hereunder shall be made in writing by hand delivery,
         first-class mail, facsimile transmission, or air courier which
         guarantees overnight delivery:

                           (1) if to a Holder of the Securities, at the most
                  current address given by such Holder to the Issuer.

                           (2)  if to the Initial Purchasers:

                           J.P. Morgan Securities Inc.
                           270 Park Avenue
                           New York, New York  10011-2070
                           Fax No.: 212-834-6702
                           Attention: Transaction Execution Group

                  and

                           Lehman Brothers Inc.
                           745 Seventh Avenue
                           New York, New York  10019
                           Fax No.:
                           Attention: Debt Capital Markets, Consumer Products
                                      Group

                  with a copy to:

                           Cleary, Gottlieb, Steen & Hamilton
                           One Liberty Plaza
                           New York, NY 10006
                           Fax No.: (212) 225-3999
                           Attention: Craig B. Brod, Esq.

                           (3)  if to the Issuer:

                           Bottling Group, LLC
                           c/o The Pepsi Bottling Group, Inc.
                           One Pepsi Way
                           Somers, NY 10589
                           Fax No.: (914) 767-1820
                           Attention: Treasurer

                  with a copy to:

                           Proskauer Rose, LLP
                           1585 Broadway
                           New York, NY 10036-8299
                           Fax No.: (212) 969 2900
                           Attention: Allan R. Williams, Esq.

                                       18

<PAGE>

                  All such notices and communications shall be deemed to have
         been duly given: at the time delivered by hand, if personally
         delivered; three business days after being deposited in the mail,
         postage prepaid, if mailed; when receipt is acknowledged by recipient's
         facsimile machine operator, if sent by facsimile transmission; and on
         the day delivered, if sent by overnight air courier guaranteeing next
         day delivery.

                  (d) No Inconsistent Agreements. The Issuer has not, as of the
         date hereof, entered into, nor shall it, on or after the date hereof,
         enter into, any agreement with respect to its securities that is
         inconsistent with the rights granted to the Holders herein or otherwise
         conflicts with the provisions hereof.

                  (e) Third Party Beneficiaries. The Holders shall be third
         party beneficiaries to the agreements made in this Agreement among the
         Issuer and the Initial Purchasers and shall have the right to enforce
         such agreements directly to the extent they may deem such enforcement
         necessary or advisable to protect their rights or the rights of Holders
         hereunder.

                  (f) Successors and Assigns. This Agreement shall be binding
         upon the Issuer and its successors and assigns.

                  (g) Counterparts. This Agreement may be executed in any number
         of counterparts and by the parties hereto in separate counterparts,
         each of which when so executed shall be deemed to be an original and
         all of which taken together shall constitute one and the same
         agreement.

                  (h) Headings. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
         CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
         REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  The Issuer hereby submits to the non-exclusive jurisdiction of
         the Federal and state courts in the Borough of Manhattan in The City of
         New York in any suit or proceeding arising out of or relating to this
         Agreement or the transactions contemplated hereby.

                  (j) Severability. If any one or more of the provisions
         contained herein, or the application thereof in any circumstance, is
         held invalid, illegal or unenforceable, the validity, legality and
         enforceability of any such provision in every other respect and of the
         remaining provisions contained herein shall not be affected or impaired
         thereby.

                  (k) Securities Held by the Issuer. Whenever the consent or
         approval of Holders of a specified percentage of principal amount of
         Securities is required hereunder, Securities held by the Issuer or its
         respective affiliates (other than subsequent Holders of Securities if
         such subsequent Holders are deemed to be affiliates solely by reason of
         their

                                       19

<PAGE>

         holdings of such Securities) shall not be counted in determining
         whether such consent or approval was given by the Holders of such
         required percentage.

                                       20

<PAGE>

         If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Issuer a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers and the Issuer in accordance with its
terms.

                                                 Very truly yours,

                                                 BOTTLING GROUP, LLC

                                                 By_____________________________
                                                   Name:
                                                   Title:

The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.

J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS INC.
BANK OF AMERICA SECURITIES LLC
CITIGROUP GLOBAL MARKETS LLC
CREDIT SUISSE FIRST BOSTON LLC
DEUTSCHE BANK SECURITIES INC.
BLAYLOCK & PARTNERS, L.P.
FLEET SECURITITES, INC.

By: J.P. MORGAN SECURITIES INC.

By_______________________________
  Name:
  Title:

By: LEHMAN BROTHERS INC.

By_______________________________
  Name:
  Title:

                                       21

<PAGE>

                                                                         ANNEX A

         Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Initial Notes where such
Initial Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Issuer has agreed that, for a period
of 180 days after the Expiration Date (as defined herein), it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."

                                      A-1

                                       1

<PAGE>

                                                                         ANNEX B

         Each broker-dealer that receives Exchange Notes for its own account in
exchange for Initial Notes, where such Initial Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."

                                      B-1

                                       1

<PAGE>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

Each broker-dealer that receives Exchange Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Initial Notes
where such Initial Notes were acquired as a result of market-making activities
or other trading activities. The Issuer has agreed that, for a period of 180
days after the Expiration Date, it will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until ______________, 200__, all dealers effecting
transactions in the Exchange Notes may be required to deliver a prospectus.

The Issuer will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Exchange
Notes and any commission or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

For a period of 180 days after the Expiration Date, the Issuer will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal. The Issuer has agreed to pay all expenses incident to the
Exchange Offer (including the expenses of one counsel for the Holders of the
Securities) other than commissions or concessions of any brokers or dealers. The
Issuer will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act, or will contribute to payments which they may be required to
make in that respect.

                                      C-1

                                       1

<PAGE>

                                                                         ANNEX D

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

         Name:___________________________
         Address:_____________________

If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Notes. If the undersigned is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Initial Notes that were acquired as a result
of market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.

                                      D-1

                                       1<PAGE>
                                                                     Exhibit 4.4

                                       THE
                        EDUCATION MANAGEMENT CORPORATION
                           DEFERRED COMPENSATION PLAN

                     AMENDED FOR IMPLEMENTATION JULY 1, 2003

<PAGE>

                                TABLE OF CONTENTS

Welcome to the Plan!........................................................1

Participation...............................................................1

Salary Deferrals............................................................2

Company Credits.............................................................3

Investment Credits..........................................................5

Deferral of Gain from the Exercise of Stock Options.........................6

Plan not Funded.............................................................8

Payment of Benefits.........................................................9

Hardship Withdrawals.......................................................11

Administration, Claims and Appeals.........................................12

Miscellaneous..............................................................13

<PAGE>

                              WELCOME TO THE PLAN!

         INTRODUCTION. This is the plan document for the Education Management
Corporation Deferred Compensation Plan. This is an unfunded, non-qualified
deferred compensation arrangement. The purpose is to allow additional retirement
savings for a select group of management or highly compensated employees in view
of the restrictions on the contributions that can be made, or benefits that can
be accrued, for these employees under tax-qualified retirement plans of the
employer.

         ORDINARY NAMES. In this document, we will call things by their ordinary
names. Education Management Corporation will be called "the company." This plan
will simply be called "the plan." When we say "you," we mean employees who are
eligible to participate in the plan and choose to do so. When we say "the Code,"
we mean the Internal Revenue Code of 1986, as amended.

         EFFECTIVE DATE. This document amends and restates the plan effective
January 1, 2003. This amendment and restatement does not attempt to describe the
rules that were in effect under the plan before that date and therefore does not
apply to any participant whose employment with the employer terminated before
that date (any such participant's rights being governed by the terms of the plan
as in effect when his termination of employment occurred).

                                  PARTICIPATION

         COMMITTEE DISCRETION. The Retirement Committee has complete discretion
to select employees for participation in this plan.

         CURRENT CRITERIA. At present, the Retirement Committee has exercised
its discretion to make eligible:

         o outside directors of the company, with respect to their director's
fees and gain on the exercise of stock options,

         o school presidents, and

         o executive employees of the company and designated subsidiaries who
earn $150,000 or more per year.

         LEGAL LIMITATION. Despite the discretion of the Retirement Committee
and the current criteria just described, no employee will be selected for
participation or continued as a participant in this plan if, due to the
employee's participation, the plan would fail to qualify as primarily for the
purpose of providing deferred compensation to a select group of management or
highly compensated employees, within the meaning of sections 201, 301 and 401 of
the Employee Retirement Income Security Act of 1974, as amended.

         PARTICIPATION AGREEMENT. Participation is not automatic if and when you
satisfy the current criteria. Instead, employees who satisfy the current
criteria will be notified of their eligibility and offered the

Deferred Compensation Plan                                              Page 1

<PAGE>

opportunity to participate. If you wish to participate, you must complete and
file with the administrator of the plan a written participation agreement.

         If you choose to make salary deferrals, the participation agreement
will reflect your choice. But in any event, the participation agreement will (i)
confirm your participation, (ii) indicate your initial choice with regard to
investment credits on any company credits that may be made, (iii) indicate your
choice as to the form of payment and (iv) designate your beneficiary.

         ANNUAL DETERMINATION. Eligibility to participate is determined
annually. The fact that you were eligible to participate (and did participate)
in one year does not automatically entitle you to participate in any future
year.

         Your participation agreement, however, is "evergreen." It remains in
effect and governs your choices under the plan during those years when you do
participate in the plan, unless and until you change it.

         CHANGING YOUR PARTICIPATION AGREEMENT. Except for changes with regard
to investment credits (which we will explain in just a moment), you change your
participation agreement by completing and filing a new one with the
administrator of the plan.

         A change in the amount of salary deferrals will take effect at the
beginning of the next calendar year, as long as it is filed with the
administrator no later than December 31 of the preceding calendar year. A change
in the time or form of payment will take effect as described later in the plan
in the section called "Payment." A change of beneficiary will take effect
immediately upon filing with the administrator.

         With regard to investment credits, you change your choices in the same
manner as under the Retirement Plan-by calling Fidelity at (800) 835-5092 during
normal business hours-and the changes take effect as soon as Fidelity processes
them.

                                SALARY DEFERRALS

         INTRODUCTION. You may choose to defer a certain percentage of your
salary and/or bonus into the plan. If you do, that amount will not be paid to
you currently in cash but will be credited to a bookkeeping account in your name
under the plan. (With regard to outside directors, references in this section to
"salary" will be understood as referring to director's fees.)

         AMOUNT. There are two possible elements of your choice to defer.

         Ordinary deferral of salary. First, you may defer a fixed, whole
percentage of your salary and/or bonus. The amount of deferral must be at least
1% of your compensation or $1,000, whichever is less. The amount may not be more
than 100% of your compensation. Alternatively, you may defer a fixed dollar
amount, as long as the amount is within those limits.

         Supplemental deferral based on amounts returned under Retirement Plan.
Second, entirely separate from the percentage described in the preceding
paragraph (and assuming you have not already chosen to defer 100% of your
compensation, of course), you may defer an additional amount of salary equal to
all or a portion of any elective contributions (plus interest) that are returned
to you from the Education Management Corporation Retirement Plan (we'll just
call it the "Retirement Plan") by reason of the non-discrimination requirements
of law.

Page 2                                     The Education Management Corporation

<PAGE>

         That is to say, in a given calendar year, elective contributions made
under the Retirement Plan in the preceding year may be returned to you (with
interest) because of the non-discrimination requirements of law. If you have
elected supplemental deferral under this paragraph, while the elective
contributions (and interest) will still be returned to you in cash from the
Retirement Plan, an offsetting additional deferral will be taken from your
current salary under this plan. The net economic effect will be that the amount
remains deferred, but under this plan instead of under the Retirement Plan. You
may elect to defer any whole percentage of any such return of elective
contributions, from zero to 100%.

         WRITTEN ELECTION. In order to defer compensation into the plan, you
must complete and file with the administrator of the plan a written election.
The written election will specify the percentage and whether it applies to
salary or bonus or both. The election will also specify whether you wish to
defer an additional amount equal to all or any portion of any elective
contributions (and interest) that may be returned to you in the particular
calendar year.

         TIMING. In order to defer for a particular calendar year, you must
complete and file the written election with the administrator of the plan no
later than December 31 of the preceding calendar year.

         With respect to the additional deferral equal to all or a portion of
the elective contributions that may be returned under the Retirement Plan, the
timing may require more explanation. An election made by December 31 of Year 1
applies to compensation earned in Year 2. In the case of supplemental deferrals
equal to contributions that are returned under the Retirement Plan, the
supplemental deferral occurs in Year 2 based on elective contributions that are
returned in Year 2 and the deferral is made from compensation earned and
otherwise payable in Year 2.

         This is so even though the contributions returned from the Retirement
Plan in Year 2 were made to the Retirement Plan in Year 1. An election of
supplemental deferral under this plan must therefore be made before it is known
whether elective contributions will be returned from the Retirement Plan at all.
The election will therefore be contingent-applicable only if and when elective
contributions are in fact returned under the Retirement Plan.

                                 COMPANY CREDITS

         INTRODUCTION. Whether or not you choose to defer salary and/or bonus,
you may receive company credits under the plan in the following circumstances.

         MATCHING CONTRIBUTIONS. If you made elective contributions under the
Retirement Plan that generated the maximum matching contribution under the
Retirement Plan (or your matching contributions did not reach the maximum
because your elective contributions reached the dollar limit before the end of
the year), you may be entitled to a company credit under this section.

         If so, you are entitled to a credit under this section if the amount of
matching contributions that you received under the Retirement Plan was limited:

         o by section 401(a)(17) of the Code (which limits compensation taken
into account under the Retirement Plan to a stated amount, which is $170,000 in
2000, for example) or

Deferred Compensation Plan                                              Page 3

<PAGE>

         o by section 402(g) of the Code (which limits elective contributions
under the Retirement Plan to a stated amount, which is $10,500 in 2000, for
example).

If so, the company will credit you under this plan with an amount equal to the
additional matching contribution that you would have received under the
Retirement Plan if you had not been so limited.

         EXAMPLE 1-Not eligible for company matching credit. It is 2000. Your
         compensation is $200,000 (although only $170,000 can be taken into
         account under the Retirement Plan). You make elective contributions
         under the Retirement Plan of 4% of compensation. You receive no credit
         under this section of this plan, because you did not make elective
         contributions under the Retirement Plan that generated the maximum
         matching contribution under the Retirement Plan, nor did your matching
         contributions reach the maximum because your elective contributions
         reached the dollar limit.

         EXAMPLE 2-Eligible and limited by 401(a)(17). It is 2000. Your
         compensation is $200,000 (although only $170,000 can be taken into
         account under the Retirement Plan). You make elective contributions
         under the Retirement Plan of 6% of compensation, which generate the
         maximum matching contribution of 4.5% (that is, 4.5% of $170,000, which
         is $7,650). If the compensation that is taken into account under the
         Retirement Plan were not limited to $170,000, your matching
         contribution would have been $9,000 (that is, 4.5% of $200,000).
         Therefore, under this section of this plan, you receive a company
         credit equal to the difference-$9,000 minus $7,650, or $1,350.

         EXAMPLE 3-Eligible and limited by 402(g). It is 2000. Your compensation
         is $170,000. You make elective contributions under the Retirement Plan
         of 10% of compensation, a percentage calculated to generate the maximum
         matching contribution. But your elective contributions reach the limit
         of $10,500 well before the end of the year (whenever your cumulative
         compensation during the year reaches $105,000), at which point they
         stop. When your elective contributions stop, so do the matching
         contributions, which up to that point have accumulated to $4,725.
         Effective January 1, 1999, under the Retirement Plan a "catch-up"
         matching contribution is made at the end of the year to bring your
         matching contributions up to the maximum of $7,650; that adjustment
         relieves you of the effect of your elective contributions stopping
         before the end of the year. But before 1999 (and if that "catch-up"
         provision is ever eliminated), you would get a credit under this
         section equal to the "catch-up" amount (that is, the maximum of $7,650
         minus your actual matching contributions of $4,725, or 2,925).

         DISCRETIONARY CONTRIBUTIONS AND FORFEITURES. Your share of company
discretionary contributions and forfeitures under the Retirement Plan may be
limited by either or both of two legal limits-the limit on compensation that may
be taken into account (in 2000, $170,000) and the limit under section 415 of the
Code on total allocations of contributions and forfeitures. If so, the company
will credit you under this plan with the discretionary contributions and/or
forfeitures that you would have received under the Retirement Plan (if the
Retirement Plan had not been subject to those two legal limits) but did not
receive under the Retirement Plan. (These are credits of cash, not stock, even
if they relate to forfeitures from employer stock accounts under the Retirement
Plan.)

Page 4                                     The Education Management Corporation

<PAGE>

                               INVESTMENT CREDITS

         INTRODUCTION. The amount that you are entitled to receive under the
plan is a function of the salary deferrals that you make, the company credits
that you receive under the plan, and investment credits. This section will
explain the system of investment credits.

         HYPOTHETICAL INVESTMENTS. Investment credits are calculated as if the
amounts standing to your credit under the plan were invested in one or more of a
variety of mutual or collective funds (listed below). While we call them
investment "credits," you realize of course that they may be either positive or
negative, depending on the performance of the funds that are used as measuring
devices.

         In addition, we want to emphasize that, for legal reasons, the amounts
standing to your credit under the plan are nothing more than bookkeeping entries
that measure the extent of the company's contractual obligation to pay you under
the terms of the plan. That includes the investment credits. You do not have any
right to, or interest in, any assets that the company may set aside for this
purpose or investment gains on them.

         YOUR CHOICE. You do, however, have a choice as to the mutual or
collective funds that will be used as the measuring stick for the investment
credits that will be added to your account. When you first become eligible to
participate, you will be asked to choose from among the funds offered under the
Retirement Plan. Those choices are shown on Appendix B to the Retirement Plan,
which is incorporated here by reference as it may be in effect from time to
time. As an exception, the Managed Income Portfolio (Fidelity) is not available
under this plan. Employer stock may be made available as an investment option
under this Plan at such time and under such conditions as the company may
determine.

         If employer stock does become an investment option and you elect to
allocate a portion of your account to the employer stock fund, you will receive
stock credits under this plan, expressed as the number of shares of stock that
represent the portion of your account invested in this fund. We will call these
"stock credits" in the remainder of this plan. As with all other amounts
deferred under this plan, stock credits represent nothing more than the
company's unfunded, unsecured promise to pay the shares to you at a future date,
in accordance with the terms of this plan. You do not own the stock unless and
until it is paid to you pursuant to the terms of this plan.

         If for any reason there is no current choice on file for you, the plan
         hereby requires that the measuring stick be the Fidelity Intermediate
         Bond Fund, and neither the plan administrator nor any other fiduciary
         of the plan shall have any authority or discretion to direct otherwise.
         The same applies to any portion of your choice that becomes out of
         date, such as if you have chosen a particular fund and that fund is no
         longer offered (unless a substitute fund is automatically provided).

         The choice that you make for the amounts currently standing to your
credit under the plan need not be the same as the choice you make for future
credits. But choices among the funds are not permitted in increments smaller
than 10% of the amount to which they apply.

         As noted above, you may change your choice with regard to investment
credits at any time by calling Fidelity during normal business hours at (800)
835-5092.

Deferred Compensation Plan                                              Page 5

<PAGE>

         STATEMENTS. The administrator of the plan will provide annual
statements showing the amounts standing to your credit under the plan. The
statements will separately account for salary deferrals, different types of
company credits, and investment credits. But you may inquire about your balance
or get a statement at any time by calling Fidelity at (800) 835-5092. Or you can
visit the Fidelity website at www.401k.com.

                            DEFERRAL OF GAIN FROM THE
                            EXERCISE OF STOCK OPTIONS

         INTRODUCTION. If you hold a stock option under the company's 1996 Stock
Incentive Plan, then entirely apart from the system of salary deferrals, company
credits and investment credits which has been described up to this point, you
may choose to defer under this plan the gain that you would otherwise realize
upon the exercise of that stock option. If you do, the stock that you would
otherwise have received upon exercise of the stock option will not be paid to
you currently but will be credited to a bookkeeping account in your name under
the plan for payment to you (or your beneficiary) at a future date.

         WRITTEN ELECTION. In order to defer gain from the exercise of a stock
option into the plan, you must complete and file with the administrator of the
plan a written election. The written election will specify either (a) the
particular options from which the gain will be deferred under this plan,
regardless of when the option is exercised, or (b) the particular exercises from
which the gain will be deferred under this plan, identified by a date or range
of dates, or (c) a combination of both.

         For example, you may elect to defer under this plan the gain from (a)
the exercise of all non-qualified stock options granted under the 1996 Stock
Incentive Plan, but none of the incentive stock options, or (b) all exercises of
stock options during a stated calendar year, or (c) all exercises of
non-qualified stock options granted under the 1996 Stock Incentive Plan that
occur during a particular calendar year.

         Please note: As explained in more detail below, the purpose of this
         section of the plan is to postpone federal income taxation on the
         element of gain from exercising a stock option-taxation that would
         otherwise occur when you exercise the option. Since federal income
         taxation of the gain at exercise applies to non-qualified stock options
         but not to incentive stock options, you may reasonably conclude that
         this section should only be used with respect to non-qualified stock
         options.

         TIMING. You may make the election to defer under this section of the
plan at any time. But the election will apply only to exercises that satisfy
both of the following conditions:

         o the exercise occurs in a calendar year following the calendar year in
which the election was filed with the administrator of this plan, and

         o the exercise occurs at least six months after the election was filed
with the administrator of this plan.

         For example, if an election is filed with the plan administrator on
February 15, 2002, it cannot apply to any exercises that occur before January 1,
2003. If an election is filed with the administrator on October 15, 2002, it
cannot apply to any exercises that occur before April 15, 2003.

Page 6                                     The Education Management Corporation

<PAGE>

         Once filed with the plan administrator, an election under this section
of the plan may only be revoked by a written revocation election filed with the
plan administrator at least 13 months prior to the effective date of such
revocation.

         For example, if you filed an election effective January 1, 2002 to
defer the gain on non-qualified options granted to you in 2001 and you file a
revocation of that election on March 15, 2003, that revocation may take effect
no earlier than April 15, 2004.

         EXERCISING THE OPTION. If you have elected to defer under this section
of the plan, do not initiate an exercise of your stock option through Mellon
Investor Services (or the then-current transfer agent). Instead, please contact
Human Resources to initiate the process, in order to assure that the option
stock is not issued to you, as we will explain here.

         Upon exercise, you will not receive the shares of stock that represent
the element of gain from exercising the stock option. When we say "the element
of gain from exercising the stock option," we mean the excess of the value of
the stock that you would receive by exercising the stock option over the amount
that you had to pay to exercise the stock option (either in cash or in stock).
This is the amount on which you would ordinarily be taxed if you did not use
this section of this plan.

         EXAMPLE: You have the option to buy 100 shares of company stock at an
         option price of $20. The stock has a current market value of $25. You
         exercise your option by paying $2,000 and, in return, would ordinarily
         receive 100 shares of stock valued at $2,500. In this example, $2,000
         worth of that stock represents a return of your purchase price; $500
         worth of stock represents the element of gain from exercising the stock
         option. In this example, the gain from exercising the option consists
         of 20 shares of stock ($500 worth of stock at $25 per share equals 20
         shares).

         EXAMPLE: The facts are the same as the previous example, except that
         you exercise by using a cashless method such as "exercise and sell to
         cover," meaning that you are treated as if you exercised the option by
         buying 100 shares at $20, costing $2,000, and then sold 80 shares at
         $25 to cover the cost of exercising the option (selling 80 shares at
         $25 raises $2,000). That would likewise leave you with 20 shares as the
         element of gain from exercising the option.

         Upon exercise, instead of receiving the shares of stock that represent
the element of gain from exercising the option, you will receive stock credits
under this plan, expressed as the number of shares of stock that represent the
element of gain. In the examples above, you would receive a stock credit under
this plan equal to 20 shares of stock.

         DIVIDENDS. You do not earn investment credits on shares of stock that
are credited to your account under this section of the plan. Instead, if
dividends are payable on the stock for which the stock credit under this plan is
a substitute, then your account under this plan will receive additional credits,
expressed in shares of company stock, equal to the value of the dividends.
Alternatively, if you so choose by written election made and filed with the plan
administrator before a dividend is declared, you may receive a current cash
payment from the company equal to the dividend in the same manner as if you
actually owned the stock that stands to your credit under this plan.

Deferred Compensation Plan                                              Page 7

<PAGE>

                                 PLAN NOT FUNDED

         INTRODUCTION. We say "credits" in this document deliberately, because
this plan involves nothing more than a contractual promise by the company to pay
deferred compensation when (and in the amounts) determined under the terms of
the plan. Legally, the plan is unfunded and unsecured, as this section will
explain.

         UNFUNDED, UNSECURED PROMISE TO PAY. This plan is unfunded and has no
assets. The promise of benefits under the plan is no more than a contractual
obligation of the company to be satisfied from its general assets. Participation
in the plan gives you nothing more than the company's contractual promise to pay
deferred compensation when due in accordance with the terms of this plan.

         SALARY DEFERRAL. Just to make the point clear once again, if you choose
to defer salary under the plan, the amount that you choose to defer is not an
"employee contribution" and is not an asset of yours or of the plan. It reflects
nothing more than a re-structuring of your compensation arrangement, whereby
current compensation is somewhat less and deferred compensation is somewhat
more.

         RESERVES. The company is not required to segregate, maintain or invest
any portion of its assets by reason of its contractual commitment to pay
deferred compensation under this plan. If the company nevertheless chooses to
establish and invest a reserve (as a matter of prudent management of its
contractual liability), such reserve remains an asset of the company in which no
participating employee has any right, title or interest. Employees entitled to
deferred compensation under this plan have the status of general unsecured
creditors of the company.

         RABBI TRUST. Though not required to do so, the company may establish
(and has in fact established) a so-called rabbi trust (so named because it was
invented by a synagogue and first approved by the IRS for a rabbi). Here is how
the rabbi trust works:

         o The rabbi trust is held by a financial institution as trustee under
a detailed, written trust agreement.

         o The company contributes cash to the rabbi trust at whatever times
and in whatever amounts it chooses. Please note that this applies only to salary
deferrals, company credits, and investment credits. If you use this plan to
defer the element of gain from the exercise of a stock option, and therefore
receive stock credits under this plan, no stock is transferred to, or held in,
the rabbi trust.

         o The assets of the trust are considered to be assets of the company.
For example, the investment earnings of the trust are taxable income to the
company under the "grantor trust" rules. As noted in the previous section of
this plan, no participant or beneficiary of the plan has any right, title or
interest in the assets of the rabbi trust.

         o But under the terms of the rabbi trust, the assets may be used only
for the purpose of paying benefits under this plan, barring bankruptcy of the
company (or similar events), in which event the assets of the rabbi trust are
available not just to participants and beneficiaries of this plan but to all
other creditors of the company as well.

Page 8                                     The Education Management Corporation

<PAGE>

         o To the extent that payments are made to participants and
beneficiaries by the trustee from the rabbi trust, those payments are considered
payments by the company under the plan and satisfy the company's obligation
under the plan.

         The trustee of the rabbi trust is Fidelity Management Trust Company,
which is why the plan refers you to Fidelity for information about your account
and to change your choices about investment credits.

                               PAYMENT OF BENEFITS

         INTRODUCTION. This section of the plan explains when you are entitled
to payment under the plan, how much, and in what form.

         DEFERRALS TO A STATED DATE, EVEN BEFORE TERMINATION OF EMPLOYMENT. On
your participation form, you may designate salary deferrals (not company
credits, which are subject to vesting) to be credited to accounts which are
payable on dates that you specify. When the stated date arrives, you are
entitled to the total amount standing to your credit in that account (including
investment credits), regardless of whether your employment with the company has
terminated. You may use this feature to defer for a child's education, for
example.

         TERMINATION OF EMPLOYMENT. Apart from accounts that are payable on a
stated date (as explained in the previous section), payment is triggered by any
one of the following events, whichever happens first. When we say " the total
amount standing to your credit under the plan," remember that we are only
talking about accounts that are not designated to be paid on stated dates (as
explained the in previous section).

         o Normal retirement. If your employment with the company terminates on
or after your 65th birthday, you are entitled to receive payment equal to the
total amount standing to your credit under the plan, including salary deferral
credits, company credits, investment credits and stock credits (if any).

         o Early retirement. If your employment with the company terminates on
or after your 55th birthday and you have completed at least 5 years of service
with the company (with the meaning of the Retirement Plan), you are entitled to
receive payment equal to the total amount standing to your credit under the
plan, including salary deferral credits, company credits, investment credits,
and stock credits (if any).

         o Disability. If you become totally and permanently disabled while
still employed by the company, you are entitled to receive payment equal to the
total amount standing to your credit under the plan, including salary deferral
credits, company credits, investment credits, and stock credits (if any).

         For this purpose, total and permanent disability means that you are
unable to engage in any substantial gainful activity by reason of any physical
or mental impairment which is expected to result in death or be of a long,
continued and indefinite duration, as certified by a written opinion of a
physician selected by the administrator of the plan.

         o Death. If you die while still employed by the company, your
beneficiary is entitled to receive payment equal to the total amount standing to
your credit under the plan, including salary deferral credits, company credits,
investment credits, and stock credits (if any).

Deferred Compensation Plan                                              Page 9

<PAGE>

         o Other termination of employment. If your employment with the company
terminates under any circumstances other than those previously listed in this
section, you are entitled to receive all of your salary deferral credits and
investment credits on them, as well as all of your stock credits (if any). You
are also entitled to receive all of the company credits and investment credits
on them if you have completed at least 3 years of service (within the meaning of
the Retirement Plan). If you have not completed at least 3 years of service
(within the meaning of the Retirement Plan), you are not entitled to receive any
of the company credits and investment credits on them, with one exception.

         As an exception, if you had completed at least 3 years of service
(within the meaning of the Retirement Plan) by April 1, 2000, then you are
entitled to 20% of the company credits and investment credits on them (if you
have completed only 3 years of service at the time of your termination) or 40%
of the company credits and investment credits on them (if you have completed
only 4 years of service at the time of your termination).

         WHEN PAYMENT IS MADE. By default, payment is made (or begun, if payment
is to be made in installments) as soon as administratively feasible after the
triggering event. If you die before payment is made in full, the balance of your
entitlement will be paid to your beneficiary as soon as administratively
feasible.

         But you may alter the default time of payment if you act sufficiently
in advance of the triggering event. Sufficiently in advance of the triggering
event means (a) during the calendar year before the calendar year in which the
triggering event occurs and (b) at least six months before the triggering event
occurs. If you file a written form with the plan administration sufficiently in
advance of the triggering event, you may postpone the triggering event either
for a fixed period or until a fixed date (stated on your form).

         EXAMPLE 1: It is August 2002. You are thinking of taking early
         retirement (age 55 plus 5 years of service) on April 1, 2003. Early
         retirement will trigger payment under this plan. But you file a written
         form with the plan administrator no later than September 30, 2002
         stating that you wish payment to be deferred until 3 years after your
         early retirement. You take early retirement on April 1, 2003. Because
         the form was filed during the preceding calendar year and at least six
         months before your early retirement, payment is successfully postponed
         until 3 years after your early retirement.

         EXAMPLE 2: Same facts as Example 1, except that you die on January 15,
         2003. Your death triggers payment under this plan. Because your form
         was not filed at least six months before the triggering event, however,
         it is not given effect. Your beneficiary is paid as soon as
         administratively possible after your death.

         FORM OF PAYMENT. Payment of salary deferral credits, company credits
and investment credits on both is made in cash, except that you may elect to
receive for your stock credits in the form of shares of employer stock (the
value of fractional shares will be paid in cash). Payment of stock units
resulting from the deferral of option gains is automatically made in stock. In
either case, by default, payment is made in a single payment.

         But you may alter the default form of payment if you act sufficiently
in advance of the triggering event. Sufficiently in advance of the triggering
event means (a) during the calendar year before the calendar year in which the
triggering event occurs and (b) at least six months before the triggering event
occurs. If you file a written form with the plan administration sufficiently in
advance of the triggering event, you may choose to have payments made in annual
installments over a period that you choose, as long as it is at least 2 years
and not more than 10 years.

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<PAGE>

         If you choose installment payments, the unpaid balance of your
entitlement will remain in the plan and will remain subject to investment
credits. The amount of each annual payment will be the balance then standing to
your credit under the plan multiplied by a fraction which is 1 divided by the
number of remaining payments.

         Please note: Before January 1, 2003, the plan required you to choose
         the form of payment on your original participation agreement, and you
         could not change the form of payment except as applied to amounts
         deferred in the future. That restriction no longer applies. The choices
         that you made on your original participation agreement will remain in
         effect on and after January 1, 2003 if you take no further action. But
         if you would like to change your choices, you may do so at any time (in
         accordance with the rules just described) with respect to both past and
         future accruals.

         YOUR BENEFICIARY. Your beneficiary is the individual or entity
designated on the last participation agreement that was completed and filed with
the administrator of the plan before your death. Please note that separation or
divorce does not automatically change your designation of beneficiary. It is
your responsibility to keep your designation current based on your current
circumstances.

         If no designated beneficiary survives you, your estate will be
considered your beneficiary. This might occur if you fail to name a beneficiary
or if all of your designated beneficiaries die before you do.

         If your beneficiary is a minor or legally incompetent, the
administrator may, in its discretion, make payment to a legal or natural
guardian, other relative, court-appointed representative, or any other adult
with whom the minor or incompetent resides. Any payment made in good faith by
the administrator will fully discharge the obligation of the plan with regard to
that payment, and the administrator will have no duty or responsibility to see
to the proper application of any such payment.

         FORFEITURES. If your employment terminates as described above under the
heading "Other termination of employment" and you are not entitled to 100% of
your company credits (and investment credits on them), the balance will be
retained on the books of the plan until you have a "Break in Service" within the
meaning of the Retirement Plan but will then be permanently forfeited.

         That is to say, if you return to employment before incurring a "Break
in Service," the forfeiture amount will remain in your account and you may be
able to earn additional entitlement to that amount with additional years of
service. But if you return after incurring a "Break in Service," the forfeiture
amount will have been removed from your account and you will never be able to
earn any additional entitlement to that amount.

                              HARDSHIP WITHDRAWALS

         INTRODUCTION. Besides deferrals to a stated date, there is one more
circumstance in which you may be able to withdraw from the plan while still
employed.

         ADMINISTRATOR'S DISCRETION. The administrator of the plan has
discretion to grant an in-service withdrawal in the circumstance where you
establish hardship. But hardship withdrawal is limited to your salary deferral
credits and stock credits (if any). That means no company credits and no
investment credits on either salary deferral credits or company credits.

         HARDSHIP. For this purpose, hardship means severe financial hardship
to you resulting from:

Deferred Compensation Plan                                              Page 11

<PAGE>

         o a sudden and unexpected illness or accident of you or a dependent
(within the meaning of section 152(a) of the Code),

         o loss of your property due to casualty, or

         o other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond your control.

         The need to send a child to college and the desire to purchase a home
do not qualify for a hardship withdrawal.

         AMOUNT AVAILABLE. The amount available is not more than is reasonably
necessary to satisfy the need after exhaustion of other sources such as:

         o reimbursement or compensation by insurance or otherwise,

         o liquidation of other assets (except to the extent that such
liquidation would itself create a hardship), and

         o cessation of salary deferrals under this plan.

                             ADMINISTRATION, CLAIMS
                                   AND APPEALS

         INTRODUCTION. The administrator of the plan is the Retirement Committee
appointed by the board of directors of the company. The administrator has all
rights, duties and powers necessary or appropriate for the administration of the
plan.

         CLAIMS. To claim your money (or stock) under the plan, file a written
claim with the administrator (c/o Education Management Corporation, 300 Sixth
Avenue, Pittsburgh, PA 15222). The plan administrator will respond in writing
within 90 days and, if the claim is denied, point out the specific reasons and
plan provisions on which the denial is based, describe any additional
information needed to complete the claim, and describe the appeal procedure.

         APPEAL. If your claim is denied and you disagree and want to pursue the
matter, you must file an appeal in accordance with the following procedure. You
cannot take any other steps unless and until you have exhausted the appeal
procedure. For example, if your claim is denied and you do not use the appeal
procedure, the denial of your claim is conclusive and cannot be challenged, even
in court.

         To file an appeal, write to the administrator stating the reasons why
you disagree with the denial of your claim. You must do this within 60 days
after the claim was denied. In the appeal process, you have the right to review
pertinent documents. You have the right to be represented by anyone else,
including a lawyer if you wish. And you have the right to present evidence and
arguments in support of your position.

         The administrator will ordinarily issue a written decision within 60
days. The administrator may extend the time to 120 days as long as it notifies
you of the extension within the original 60 days. The administrator may, in its
sole discretion, hold a hearing. The decision will explain the reasoning of the
administrator and refer to the specific provisions of this plan on which the
decision is based.

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<PAGE>

         DISCRETIONARY AUTHORITY. The administrator shall have and shall
exercise complete discretionary authority to construe, interpret and apply all
of the terms of the plan, including all matters relating to eligibility for
benefits, amount, time or form of benefits, and any disputed or allegedly
doubtful terms. In exercising such discretion, the administrator shall give
controlling weight to the intent of the company in establishing the plan. All
decisions of the administrator in the exercise of its appellate authority under
the plan (or in the exercise of its claims authority, absent an appeal) shall be
final and binding on the plan, the company and all participants and
beneficiaries.

                                  MISCELLANEOUS

         NO GUARANTEE OF TAX CONSEQUENCES. While the company is pleased to be
able to offer this plan for those employees who are eligible for it and wish to
take advantage of it, the plan does not qualify for any program under which the
Internal Revenue Service would issue an advance ruling or other determination on
the federal tax consequences of the plan. This is particularly true of the
feature under which the element of gain on the exercise of a stock option may be
deferred under this plan-a relatively recent innovation on which the IRS has not
yet spoken (when this edition of the plan was adopted). The company does not
guarantee the tax consequences of the plan; consult your own tax advisor.

         INTEGRATION. This plan document represents the totality of the
company's commitment to provide deferred compensation under this plan. There are
no other writings, nor are there any oral representations or understandings,
that reflect, add to, subtract from, or alter the terms of this document.

         AMENDMENT AND TERMINATION. Although the plan was not established with
the intention that it be temporary or expire on a certain date, the company
reserves the right, in its sole discretion, to amend or terminate the plan at
any time, for any reason (or no reason), without notice, retroactively or
prospectively.

         As the only exception to the foregoing authority to amend or terminate,
the company may not amend or terminate the plan in such a way as to reduce the
balance that stands to the credit of any participant as of the date of adoption
of any such amendment or termination, including salary deferral credits, company
credits, and investment credits earned up to that time.

         EXPENSES.  The expenses of the plan will be borne by the company.

         NON-ALIENATION. As required by the Internal Revenue Service, your right
to benefits under this plan is not subject in any manner to anticipation, sale,
transfer, assignment, pledge, encumbrance, attachment, garnishment or any other
type of alienation, whether initiated by you or by creditors of you or your
beneficiary. Any attempt at alienation will simply be void.

         LIMITATION OF LIABILITY. No director, officer, or other employee of the
company shall be personally liable for any action taken or omitted in connection
with this plan and its administration unless attributable to his own fraud or
willful misconduct.

         The company hereby agrees to provide insurance to, or otherwise
indemnify, every director, officer, and other employee of the company who serves
the plan in an administrative or fiduciary capacity against any and all claims,
loss, damages, expense, and liability arising from any act or failure to act in
that capacity unless there is a final court decision that the person was guilty
of gross negligence or willful misconduct.

         APPLICABLE LAW. This plan will be construed according to the law of the
Commonwealth of Pennsylvania to the extent not pre-empted by ERISA.

Deferred Compensation Plan                                              Page 13

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