Document:

<PAGE>   1
                                                                     EXHIBIT 4.7
                                                           EXECUTION COUNTERPART

                                U.S. $250,000,000
                            364-DAY CREDIT AGREEMENT

                            Dated as of May 3, 2000

                                      among

                         THE PEPSI BOTTLING GROUP, INC.

                               BOTTLING GROUP, LLC

                            THE LENDERS NAMED HEREIN

                            THE CHASE MANHATTAN BANK,
                                    as Agent,

                         SALOMON SMITH BARNEY INC. and
                        BANC OF AMERICA SECURITIES LLC,
                            as Co-Lead Arrangers and
                                 Book Managers

                                      and
                              CITIBANK, N.A., and
                             BANK OF AMERICA, N.A.,
                            as Co-Syndication Agents
<PAGE>   2
                                TABLE OF CONTENTS

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                                                                                    Page
                                                                                    ----

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

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SECTION 1.01      Certain Defined Terms...............................................1
SECTION 1.02      Computation of Time Periods........................................12
SECTION 1.03      Accounting Terms...................................................12

                                   ARTICLE II
                        AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01      The Revolving Credit Advances......................................13
SECTION 2.02      Making the Revolving Credit Advances...............................13
SECTION 2.03      The Competitive Bid Advances.......................................15
SECTION 2.04      Fees...............................................................18
SECTION 2.05      Termination, Reduction or Increase of the Commitments..............19
SECTION 2.06      Repayment of Revolving Credit Advances; Evidence of
                           Indebtedness; Extension of Termination Date...............22
SECTION 2.07      Interest on Revolving Credit Advances..............................23
SECTION 2.08      Interest Rate Determination........................................24
SECTION 2.09      Optional Conversion of Revolving Credit Advances...................25
SECTION 2.10      Optional Prepayments of Revolving Credit Advances..................25
SECTION 2.11      Increased Costs....................................................26
SECTION 2.12      Illegality.........................................................27
SECTION 2.13      Payments and Computations..........................................27
SECTION 2.14      Taxes..............................................................28
SECTION 2.15      Sharing of Payments, Etc...........................................31
SECTION 2.16      Use of Proceeds....................................................31
SECTION 2.17      Borrowings by Borrowing Subsidiaries; Substitution of Borrower.....31
SECTION 2.18      Mitigation Obligations.............................................33

                                    ARTICLE III
                     CONDITIONS TO EFFECTIVENESS AND ARTICLE II

SECTION 3.01      Conditions Precedent to Effectiveness of Sections 2.01 and 2.03....33
SECTION 3.02      Conditions Precedent to Each Revolving Credit Borrowing............35
SECTION 3.03      Conditions Precedent to Each Competitive Bid Borrowing.............35
SECTION 3.04      Determinations Under Section 3.01..................................36
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                                   ARTICLE IV
               REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

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SECTION 4.01      Representations and Warranties of the Loan Parties.................36

                                    ARTICLE V
                                    COVENANTS

SECTION 5.01      Affirmative Covenants..............................................38
SECTION 5.02      Negative Covenants.................................................39

                                   ARTICLE VI
                                EVENTS OF DEFAULT

SECTION 6.01      Events of Default..................................................42

                                   ARTICLE VII
THE AGENT............................................................................44

                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.01      Amendments, Etc....................................................46
SECTION 8.02      Notices, Etc.......................................................46
SECTION 8.03      No Waiver; Remedies................................................47
SECTION 8.04      Costs and Expenses.................................................47
SECTION 8.05      Right of Set-off...................................................48
SECTION 8.06      Binding Effect.....................................................49
SECTION 8.07      Assignments and Participations.....................................49
SECTION 8.08      Confidentiality....................................................51
SECTION 8.09      Governing Law......................................................52
SECTION 8.10      Execution in Counterparts..........................................52
SECTION 8.11      Jurisdiction, Etc..................................................52
SECTION 8.12      WAIVER OF JURY TRIAL...............................................52

                                   ARTICLE IX
                                COMPANY GUARANTEE

SECTION 9.01      Company Guarantee..................................................53
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                                    ARTICLE X
                              SUBSIDIARY GUARANTEE

SECTION 10.01     Subsidiary Guarantee...............................................54
SECTION 10.02     Limitation of Guarantor's Liability................................56

SCHEDULE 1        LENDING OFFICES

SCHEDULE 2        APPLICABLE MARGIN

EXHIBIT A-1       FORM OF NOTICE OF REVOLVING CREDIT BORROWING

EXHIBIT A-2       FORM OF NOTICE OF COMPETITIVE BID BORROWING

EXHIBIT A-3       FORM OF EXTENSION AGREEMENT

EXHIBIT B         FORM OF ASSIGNMENT AND ACCEPTANCE

EXHIBIT C         FORM OF OPINION OF COUNSEL FOR THE COMPANY
                  AND THE GUARANTOR

EXHIBIT D         FORM OF DESIGNATION LETTER

EXHIBIT E         FORM OF SUBSTITUTION LETTER

EXHIBIT F         FORM OF TERMINATION LETTER
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<PAGE>   5
                                CREDIT AGREEMENT

                           Dated as of May 3, 2000

                  THE PEPSI BOTTLING GROUP, INC., a Delaware corporation (the
"Company"), BOTTLING GROUP, LLC, a Delaware limited liability company (the
"Guarantor"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof, and THE CHASE
MANHATTAN BANK ("Chase"), as administrative agent (in such capacity, the
"Agent") for the Lenders (as hereinafter defined), agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  SECTION 1.01 Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):

                  "Advance" means a Revolving Credit Advance or a Competitive
Bid Advance.

                  "Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the Voting
Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.

                  "Agent's Account " means the account of the Agent maintained
by the Agent at Chase with its office at 270 Park Avenue, New York, New York
10017.

                  "Alternate Covenant Date" means any day on which the Index
Debt of Pepsi shall be rated less than A- by S&P or less than A3 by Moody's.

                  "Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of the Base Rate
Advance and such Lender's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Agent as Applicable Lending Office with
respect to such Competitive Bid Advance.

                  "Applicable Margin" means with respect to any Eurodollar Rate
Advance or with respect to the facility fees payable hereunder, as the case may
be, for any day, the applicable rate
<PAGE>   6
per annum set forth in Schedule 2; provided, that, for purposes of calculating
the Applicable Margin, (i) if either Moody's or S&P shall not have in effect a
rating for the Company, then the Applicable Margin shall be determined based on
the highest applicable facility fee or LIBOR Margin in Schedule 2, (ii) if the
ratings established or deemed to have been established by Moody's and S&P for
the Company shall fall within different categories, the Applicable Margin shall
be based on the higher of the two ratings unless one of the two ratings is two
or more categories lower than the other, in which case the Applicable Margin
shall be determined by reference to the category next below that of the higher
of the two ratings; and (iii) if the ratings established or deemed to have been
established by Moody's and S&P for the Company shall be changed (other than as a
result of a change in the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by the applicable rating
agency, irrespective of when notice of such change shall have been furnished by
the Borrower to the Agent and the Lenders. Each change in the Applicable Margin
shall apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the next such
change.

                  "Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.

                  "Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit B hereto.

                  "Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the higher of:

                  (a) the rate of interest announced publicly by Chase in New
York, New York, from time to time, as Chase's base rate; and

                  (b) 1/2 of one percent per annum above the Federal Funds Rate.

                  "Base Rate Advance" means a Revolving Credit Advance that
bears interest as provided in Section 2.07(a).

                  "Borrowers" means, at any time, collectively, the Company
unless the Substitution Date has occurred pursuant to Section 2.17, each
Borrowing Subsidiary and, on and after the Substitution Date has occurred
pursuant to Section 2.17, the Guarantor.

                  "Borrowing" means a Revolving Credit Borrowing or a
Competitive Bid Borrowing.

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<PAGE>   7
                  "Borrowing Subsidiary" means any Subsidiary of the Company, as
to which a Designation Letter has been delivered to the Agent and as to which a
Termination Letter has not been delivered to the Agent in accordance with
Section 2.17.

                  "Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.

                  "Change of Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
other than Pepsi, of shares representing more than 25% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Company; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Company by Persons who were neither (i) nominated
by the board of directors of the Company nor (ii) appointed by directors so
nominated; or (c) the acquisition of direct or indirect Control of the Company
by any Person or group other than Pepsi.

                  "Commitment" has the meaning specified in Section 2.01.

                  "Competitive Bid Advance" means an advance by a Lender to a
Borrower as part of a Competitive Bid Borrowing resulting from the auction
bidding procedure described in Section 2.03 and refers to a Fixed Rate Advance
or a LIBO Rate Advance.

                  "Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer to
make one or more Competitive Bid Advances as part of such borrowing has been
accepted under the auction bidding procedure described in Section 2.03.

                  "Competitive Bid Reduction" has the meaning specified in
Section 2.01.

                  "Confidential Information" means information that the Company
furnishes to the Agent or any Lender in a writing designated as confidential,
but does not include any such information that is or becomes generally available
to the public or that is or becomes rightfully available to the Agent or such
Lender from a source other than the Company.

                  "Consolidated" refers to the consolidation of accounts in
accordance with GAAP.

                  "Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus, without duplication and to the extent reflected as
a charge in the statement of such Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or writeoff of
debt discount with respect to Debt (including the Advances), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not

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<PAGE>   8
limited to, goodwill) and organization costs, (e) any extraordinary expenses or
losses (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business), and (f) any other non-cash
charges, and minus, to the extent included in the statement of such Consolidated
Net Income for such period, the sum of (a) any extraordinary income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (b) any other non-cash
income, all as determined on a Consolidated basis; in each case exclusive of the
cumulative effect of foreign currency gains or losses. For the purposes of
calculating Consolidated EBITDA for any period pursuant to any determination of
the Consolidated Leverage Ratio, if during such period the Company or any
Subsidiary, including the Guarantor, shall have made an acquisition or incurred
or assumed (without duplication of any Debt incurred to refinance such assumed
Debt) any Debt, Consolidated EBITDA for such period shall be calculated after
giving pro forma effect thereto as if such acquisition occurred and such Debt
had been incurred or assumed or refinanced on the first day of such period.

                  "Consolidated Leverage Ratio" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Total Debt on such day to (b)
Consolidated EBITDA for the four consecutive fiscal quarters then ended (taken
as one accounting period).

                  "Consolidated Net Income" means, for any period, the
consolidated net income (or loss) of the Company and its Restricted
Subsidiaries, including the Guarantor, determined on a consolidated basis in
accordance with GAAP, before deduction of any minority interests in the
Guarantor and excluding the cumulative effect of any foreign currency gains or
losses.

                  "Consolidated Net Tangible Assets" means the total assets of
the Company and its Restricted Subsidiaries (less applicable depreciation,
amortization, and other valuation reserves), except to the extent resulting from
write-ups of capital assets (other than writeups in connection with accounting
for acquisitions, in accordance with GAAP), less all current liabilities
(excluding intercompany liabilities) and all intangible assets of the Company
and its Restricted Subsidiaries, all as set forth on the most recent
Consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in accordance with GAAP, but before deduction of any minority interests
in the Guarantor and exclusive of any foreign currency translation adjustments.

                  "Consolidated Net Worth" means, as of any date of
determination, all items which in conformity with GAAP would be included under
shareholders' equity on a Consolidated balance sheet of the Company and its
Subsidiaries, including the Guarantor, at such date plus amounts representing
mandatorily redeemable preferred securities issued by Subsidiaries of the
Company, including the Guarantor, but before deduction of any minority interests
in the Guarantor and exclusive of any foreign currency translation adjustments.

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<PAGE>   9
                  "Consolidated Total Debt" means, at any date (i) the aggregate
principal amount of all Debt of the Company and its Subsidiaries, including the
Guarantor minus (ii) the aggregate amount (not in excess of $500,000,000) of all
cash and cash equivalents of the Company and its Subsidiaries, in each case at
such date and determined on a Consolidated basis in accordance with GAAP.

                  "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

                  "Convert", "Conversion" and "Converted" each refers to a
conversion of Revolving Credit Advances of one Type into Revolving Credit
Advances of the other Type pursuant to Section 2.08 or 2.09.

                  "Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all obligations (other than trade accounts payable
arising in the ordinary course of business) of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person as
lessee under leases that have been or should be, in accordance with GAAP,
recorded as capital leases, (f) all Debt of others referred to in clauses (a)
through (c) above or clause (g) below guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such
Person through (i) an agreement (1) to pay or purchase such Debt or to advance
or supply funds for the payment or purchase of such Debt, (2) to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such Debt or
to assure the holder of such Debt against loss, (3) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for property
or services irrespective of whether such property is received or such services
are rendered) or (4) otherwise to assure a creditor against loss, or (ii) a
standby letter of credit and (g) all Debt referred to in clauses (a) through (f)
above secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Debt.

                  "Debt to Capitalization Ratio" means at any time the ratio of
(x) Consolidated Total Debt to (y) the sum of (i) Consolidated Total Debt plus
(ii) Consolidated Net Worth.

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<PAGE>   10
                  "Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.

                  "Designation Letter" has the meaning specified in Section
2.17(a).

                  "Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule 1 hereto or in the Assignment and Acceptance pursuant to
which it became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Company and the Agent.

                  "Effective Date" has the meaning specified in Section 3.01.

                  "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United States,
or any State thereof, and having total assets in excess of $15,000,000,000 and a
combined capital and surplus of at least $1,000,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having total assets in excess of $15,000,000,000 and a
combined capital and surplus of at least $1,000,000,000; (v) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$l5,000,000,000 and a combined capital and surplus of at least $1,000,000,000 so
long as such bank is acting through a branch or agency located in the United
States or in the country in which it is organized or another country that is
described in this clause (v); (vi) the central bank of any country that is a
member of the Organization for Economic Cooperation and Development; provided,
however, that each Person described in clauses (ii) through (vi) shall have a
short term public debt rating of not less than A by S&P or Moody's or shall be
approved by the Company; and (vii) any other Person approved by the Company,
such approval not to be unreasonably withheld or delayed; provided, however,
that neither the Company nor an Affiliate of the Company shall qualify as an
Eligible Assignee.

                  "Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance relating to the
environment, health, safety or Hazardous Materials.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

                  "Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule 1 hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is

                                        6
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specified, its Domestic Lending Office), or such other office of such Lender as
such Lender may from time to time specify to the Company and the Agent.

                  "Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing,
an interest rate per annum appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) as of 11:00 A.M. (London
time) on the date two Business Days prior to the first day of such Interest
Period as the rate for Dollar deposits having a term comparable to such Interest
Period, or in the event such offered rate is not available from said Page 3750,
the average (rounded to the nearer whole multiple of 1/16 of 1% per annum, if
such average is not such a multiple) of the rate per annum at which deposits in
U.S. dollars are offered by the principal office of each of the Reference Banks
in London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount substantially equal to such Reference Bank's Eurodollar Rate Advance
comprising part of such Revolving Credit Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period. If the
Eurodollar Rate does not appear on said Page 3750 (or any successor page), the
Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing shall be determined by
the Agent on the basis of applicable rates furnished to and received by the
Agent from the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.08.

                  "Eurodollar Rate Advance" means a Revolving Credit Advance
that bears interest as provided in Section 2.07(b).

                  "Events of Default" has the meaning specified in Section 6.01.

                  "Extension Agreement" means an Extension Agreement
substantially in the form contained in Exhibit A-3 hereto.

                  "Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

                  "Fiscal Quarter" means a period of 13 or (or 14) weeks treated
by the Company as a fiscal quarter.

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<PAGE>   12
                  "Fiscal Year" means the period of 52 (or 53) weeks ending on
the last Saturday of any calendar year and treated by the Company as its fiscal
year.

                  "5-Year Facility" means the 5 Year Credit Agreement dated as
of April 22, 1999 among the Company, the Guarantor, certain banks, financial
institutionals and other institutional lenders, and Chase, as agent.

                  "Fixed Rate Advances" has the meaning specified in Section
2.03(2).

                  "GAAP" means generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited Consolidated financial statements of the Borrower and its
Subsidiaries delivered to the Lenders.

                  "Granting Lender" has the meaning specified in Section
8.07(e).

                  "Guaranteed Party" has the meaning specified in Section 9.01.

                  "Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, radon gas and any other chemicals, materials or substances
designated, classified or regulated as being "hazardous" or "toxic", or words of
similar import, under any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance.

                  "Index Debt" of any Person means senior, unsecured, long term
indebtedness for borrowed money of such Person that is not guaranteed by any
other Person (other than, in the case of the Company, the Guarantor) or subject
to any other credit enhancement.

                  "Information Memorandum" means the information memorandum
dated April, 2000 used by the Agent in connection with the syndication of the
Commitments.

                  "Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing, the period commencing on
the date of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance and ending on the last day
of the period selected by the Company pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period selected by
the Company pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three, six or, to the extent available from all the
Lenders, nine months, as the Company may, upon notice received by
the Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; provided, however,
that:

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<PAGE>   13
                  (i) the Company may not select any Interest Period that ends
after the Termination Date;

                  (ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving Credit Borrowing
shall be of the same duration;

                  (iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided, however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day; and

                  (iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such succeeding calendar
month.

                  "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

                  "Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Sections 2.05(c) or 8.07.

                  "LIBO Rate Advances" has the meaning specified in Section
2.03(2).

                  "Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor.

                  "Loan Documents" means, collectively, this Agreement, each
promissory note issued thereunder, each Designation Letter and each Termination
Letter.

                  "Loan Party" has the meaning specified in Section 4.01.

                  "Master Bottling Agreement" means the Master Bottling
Agreement dated March 30, 1999, between the Company and Pepsi or any successor
or replacement agreement that confers substantially the same benefits on the
Company as the Master Bottling Agreement conferred on the date hereof.

                                        9
<PAGE>   14
                  "Material Adverse Change" means any material adverse change in
the financial condition, operations or properties of the Company or the Company
and its Subsidiaries (including the Guarantor) taken as a whole.

                  "Material Adverse Effect" means a material adverse effect on
(a) the financial condition, operations or properties of the Company and its
Subsidiaries (including the Guarantor) taken as a whole, (b) the rights and
remedies of the Agent or any Lender under this Agreement or any promissary note
or (c) the ability of the Company to perform its obligations under this
Agreement or any promissary note.

                  "Material Subsidiary" means each Subsidiary of the Company
which is a "significant subsidiary" as that term is defined in Rule 1-02(w) of
the Regulation S-X under the Securities Act of 1933, as such rule is in effect
as of the date hereof.

                  "Moody's" means Moody's Investors Service, Inc. and any
successor thereto.

                  "New Lender" means, for purposes of Section 2.05(c), an
Eligible Assignee (which may be a Lender) selected by the Company with (in the
case of a New Lender that is not already a Lender) prior consultation with the
Agent.

                  "Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.03(2).

                  "Notice of Revolving Credit Borrowing" has the meaning
specified in Section 2.02(1).

                  "Pepsi" means PepsiCo, Inc., a North Carolina corporation.

                  "Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.

                  "Principal Property" means any single manufacturing or
processing plant, office building, or warehouse owned or leased by the Company
or a Restricted Subsidiary other than a plant, warehouse, office building, or
portion thereof which, in the opinion of the Company's Board of Directors, is
not of material importance to the business conducted by the Company and its
Restricted Subsidiaries as an entirety.

                  "Rating" means the rating of the Company's Index Debt by S&P
or Moody's, as the case may be.

                  "Reference Banks" means Chase, Citibank, N.A. and Bank of
America, N.A. (and any successors thereof).

                                       10
<PAGE>   15
                  "Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.

                  "Register" has the meaning specified in Section 8.07(d).

                  "Required Lenders" means at any time Lenders owed more than
50% of the then aggregate unpaid principal amount of the Revolving Credit
Advances (excluding Competitive Bid Advances) owing to Lenders, or, if no such
principal amount is then outstanding, Lenders having more than 50% of the
aggregate amount of the Commitments.

                  "Restricted Subsidiary" means at any time any Subsidiary of
the Company except a Subsidiary which is at the time an Unrestricted Subsidiary.

                  "Revolving Credit Advance" means an advance by a Lender to a
Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate
Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of
Revolving Credit Advance).

                  "Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of the
Lenders pursuant to Section 2.01.

                  "S&P" means Standard & Poors Rating Services or any successor
thereto.

                  "SPC" has the meaning specified in Section 8.07(e).

                  "Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership or
joint venture or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.

                                       11
<PAGE>   16
                  "Substitution Date" has the meaning specified in Section
2.17(c).

                  "Substitution Letter" has the meaning specified in Section
2.17(c).

                  "Termination Date" means May 2, 2001 or, if earlier, the date
of termination in whole of the Commitments pursuant to Section 2.05(a) or 6.01
or, in the case of any Lender whose Commitment is extended pursuant to Section
2.06(c), the date to which such Commitment is extended; provided in each case
that if any such date is not a Business Day, the relevant Termination Date of
such Lender shall be the immediately preceding Business Day.

                  "Termination Letter" has the meaning specified in Section
2.17(b).

                  "Type" has the meaning specified in the definition of
"Revolving Credit Advance."

                  "Unrestricted Subsidiary" means any Subsidiary of the Company
(not at the time designated a Restricted Subsidiary) other than the Guarantor
(i) the major part of whose business consists of finance, banking, credit,
leasing, insurance, financial services, or other similar operations, or any
continuation thereof, (ii) substantially all the assets of which consist of the
capital stock of one or more such Subsidiaries, or (iii) designated as such by
the Company's Board of Directors. Any Subsidiary designated as a Restricted
Subsidiary may be designated as an Unrestricted Subsidiary.

                  "Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar actions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.

                  SECTION 1.02 Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".

                  SECTION 1.03 Accounting Terms. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP; provided that,
if the Company notifies the Agent that the Company wishes to amend any
provisions hereof to eliminate the effect of any change in GAAP (or if the Agent
notifies the Company that the Required Lenders wish to amend any provision
hereof for such purpose), then such provision shall be applied on the basis of
GAAP in effect immediately

                                       12
<PAGE>   17
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such provision is amended in a manner satisfactory to the Company
and the Required Lenders.

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES

                  SECTION 2.01 The Revolving Credit Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
Revolving Credit Advances to the Company and any Borrowing Subsidiary from time
to time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate amount not to exceed at any time outstanding
the amount set forth opposite such Lender's name on the signature pages hereof
or, if such Lender has entered into any Assignment and Acceptance, set forth for
such Lender in the Register maintained by the Agent pursuant to Section 8.07(c),
as such amount may be reduced pursuant to Section 2.05(a) or increased pursuant
to Section 2.05(c) (such Lender's "Commitment"), provided that the aggregate
amount of the Commitments of the Lenders shall be deemed used from time to time
to the extent of the aggregate amount of the Competitive Bid Advances then
outstanding and such deemed use of the aggregate amount of the Commitments shall
be allocated among the Lenders ratably according to their respective Commitments
(such deemed use of the aggregate amount of the Commitments being a "Competitive
Bid Reduction"). Each Revolving Credit Borrowing shall be in an aggregate amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if
less, (i) an aggregate amount equal to the amount by which the aggregate amount
of a proposed Competitive Bid Borrowing requested by the Company exceeds the
aggregate amount of Competitive Bid Advances offered to be made by the Lenders
and accepted by the Company in respect of such Competitive Bid Borrowing, if
such Competitive Bid Borrowing is made on the same date as such Revolving Credit
Borrowing or (ii) the aggregate amount of the unused Commitments, after giving
effect to any Competitive Bid Reductions then in effect) and shall consist of
Revolving Credit Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits of each
Lender's Commitment, each Borrower may borrow under this Section 2.01, prepay
pursuant to Section 2.10 and reborrow under this Section 2.01.

                  SECTION 2.02 Making the Revolving Credit Advances.

                  (a) Each Revolving Credit Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Revolving Credit Borrowing in the case of a
Revolving Credit Borrowing consisting of Eurodollar Rate Advances, or the date
of the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of Base Rate Advances, by the Company (on its own behalf
and on behalf of any Borrowing Subsidiary) to the Agent, which shall give to
each Lender prompt notice thereof by telecopier or telex. Each such notice of a
Revolving Credit Borrowing (a "Notice of Revolving Credit Borrowing") shall be
by telecopier or telex, confirmed promptly

                                       13
<PAGE>   18
in writing, in substantially the form of Exhibit A-1 hereto, specifying therein
the requested (i) date of such Revolving Credit Borrowing, (ii) Type of Advances
comprising such Revolving Credit Borrowing, (iii) aggregate amount of such
Revolving Credit Borrowing, (iv) in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Revolving Credit Advance and (v) the name of the relevant Borrower (which shall
be the Company or a Borrowing Subsidiary). Each Lender shall, before 11:00 A.M.
(New York City time), in the case of a Revolving Credit Borrowing consisting of
Eurodollar Rate Advances, or before 1:00 P.M. (New York City time), in the case
of a Revolving Credit Borrowing consisting of Base Rate Advances, on the date of
such Revolving Credit Borrowing, make available for the account of its
Applicable Lending Office to the Agent at the Agent's Account, in same day
funds, such Lender's ratable portion of such Revolving Credit Borrowing. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such same day funds
available to the relevant Borrower at such Borrower's account at the Agent's
address referred to in Section 8.02.

                  (b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Company may not select Eurodollar Rate Advances for any
Revolving Credit Borrowing if the aggregate amount of such Revolving Credit
Borrowing is less than $10,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 and
(ii) the Eurodollar Rate Advances may not be outstanding as part of more than
six separate Revolving Credit Borrowings.

                  (c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the relevant Borrower. In the case of any Revolving
Credit Borrowing that the related Notice of Revolving Credit Borrowing specifies
is to be comprised of Eurodollar Rate Advances, the Company shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such Notice of
Revolving Credit Borrowing for such Revolving Credit Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Revolving Credit
Advance to be made by such Lender as part of such Revolving Credit Borrowing
when such Revolving Credit Advance, as a result of such failure, is not made on
such date.

                  (d) Unless the Agent shall have received notice from a Lender
prior to the date of any Revolving Credit Borrowing that such Lender will not
make available to the Agent such Lender's ratable portion of such Revolving
Credit Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent on the date of such Revolving Credit Borrowing in
accordance with subsection (a) of this Section 2.02 and the Agent may, in
reliance upon such assumption, make available to the relevant Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and such
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date

                                       14
<PAGE>   19
such amount is made available to such Borrower until the date such amount is
repaid to the Agent, at (i) in the case of a Borrower, the interest rate
applicable at the time to Revolving Credit Advances comprising such Revolving
Credit Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Revolving Credit Advance as part of such
Revolving Credit Borrowing for purposes of this Agreement and shall be made
available in same day funds to the relevant Borrower's account at the Agent's
address referred to in Section 8.02.

                  (e) The failure of any Lender to make the Revolving Credit
Advance to be made by it as part of any Revolving Credit Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Revolving Credit Advance to be made by such other Lender on the date of any
Revolving Credit Borrowing.

                  SECTION 2.03 The Competitive Bid Advances.

                  (1) Each Lender severally agrees that each Borrower may make
Competitive Bid Borrowings under this Section 2.03 from time to time on any
Business Day during the period from the date hereof until the date occurring 7
days prior to the Termination Date in the manner set forth below; provided that,
following the making of each Competitive Bid Borrowing, the aggregate amount of
the Advances then outstanding shall not exceed the aggregate amount of the
Commitments of the Lenders (computed without regard to any Competitive Bid
Reduction).

                  (2) The Company (on its own behalf and on behalf of any
Borrowing Subsidiary) may request a Competitive Bid Borrowing under this Section
2.03 by delivering to the Agent, by telecopier or telex, confirmed promptly in
writing, a notice of a Competitive Bid Borrowing (a "Notice of Competitive Bid
Borrowing"), in substantially the form of Exhibit A-2 hereto, specifying therein
(u) the date of such proposed Competitive Bid Borrowing, (v) the aggregate
amount of such proposed Competitive Bid Borrowing, (w) the maturity date for
repayment of each Competitive Bid Advance to be made as part of such Competitive
Bid Borrowing (which maturity date may not be earlier than the date occurring 7
days after the date of such Competitive Bid Borrowing or later than the
Termination Date), (x) the interest payment date or dates relating thereto, (y)
the name of the Borrower, and (z) any other terms to be applicable to such
Competitive Bid Borrowing, not later than 10:00 A.M. (New York City time) (A) at
least one Business Day prior to the date of the proposed Competitive Bid
Borrowing, if the Company shall specify in the Notice of Competitive Bid
Borrowing that the rates of interest to be offered by the Lenders shall be fixed
rates per annum (the Advances comprising any such Competitive Bid Borrowing
being referred to herein as "Fixed Rate Advances") and (B) at least four
Business Days prior to the date of the proposed Competitive Bid Borrowing, if
the Company shall instead specify in the Notice of Competitive Bid Borrowing
another basis to be used by the Lenders in determining the rates of interest to
be offered by them (the Advances comprising such Competitive Bid Borrowing being
referred to herein as "LIBO Rate Advances"). The Agent shall in turn promptly
notify

                                       15
<PAGE>   20
each Lender of each request for a Competitive Bid Borrowing received by
it from the Company by sending such Lender a copy of the related Notice of
Competitive Bid Borrowing.

                  (3) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Competitive Bid Advances to the
relevant Borrower as part of such proposed Competitive Bid Borrowing at a rate
or rates of interest specified by such Lender in its sole discretion, by
notifying the Agent (which shall give prompt notice thereof to the Company),
before 10:00 A.M. (New York City time) on the date of such proposed Competitive
Bid Borrowing, in the case of a Competitive Bid Borrowing consisting of Fixed
Rate Advances and three Business Days before the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing consisting
of LIBO Rate Advances, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make as part of
such proposed Competitive Bid Borrowing (which amounts may, subject to the
proviso to the first sentence of this Section 2.03(1), exceed such Lender's
Commitment, if any), the rate or rates of interest therefor and such Lender's
Applicable Lending Office with respect to such Competitive Bid Advance; provided
that if the Agent in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Company of such offer before
9:00 A.M. (New York City time) on the date on which notice of such election is
to be given to the Agent by the other Lenders. If any Lender shall elect not to
make such an offer, such Lender shall so notify the Agent, before 10:00 A.M.
(New York City time) on the date on which notice of such election is to be given
to the Agent by the other Lenders, and such Lender shall not be obligated to,
and shall not, make any Competitive Bid Advance as part of such Competitive Bid
Borrowing; provided that the failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any Competitive Bid Advance as part of
such proposed Competitive Bid Borrowing.

                  (4) The Company shall, in turn, before 11:00 A.M. (New York
City time) on the date of such proposed Competitive Bid Borrowing, in the case
of a Competitive Bid Borrowing consisting of Fixed Rate Advances and before 1:00
P.M. (New York City time) three Business Days before the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing consisting
of LIBO Rate Advances, either:

                           (x) cancel such Competitive Bid Borrowing by giving
                  the Agent notice to that effect, or

                           (y) accept one or more of the offers made by any
                  Lender or Lenders pursuant to paragraph (3) above, by giving
                  notice to the Agent of the amount of each Competitive Bid
                  Advance (which amount shall be equal to or greater than the
                  minimum amount, and equal to or less than the maximum amount,
                  notified to the Company by the Agent on behalf of such Lender
                  for such Competitive Bid Advance pursuant to paragraph (3)
                  above) to be made by each Lender as part of such Competitive
                  Bid Borrowing, and reject any remaining offers made by Lenders
                  pursuant to paragraph (3) above by giving the Agent notice to
                  that effect. If the

                                       16
<PAGE>   21
                  Company accepts any offers made by Lenders pursuant to
                  paragraph (3) above, such offers shall be accepted in the
                  order of the lowest to highest interest rates or, if two or
                  more Lenders offer to make Competitive Bid Advances at the
                  same interest rate, such offers, if any, shall be accepted in
                  proportion to the amount offered by each such Lender at such
                  interest rate notwithstanding any minimum specified by such
                  Lender in its notice given pursuant to Section 2.03(3). The
                  Company may not accept offers in excess of the amount
                  specified in accordance with paragraph (1) above.

                  (5) If the Company notifies the Agent that such Competitive
Bid Borrowing is cancelled pursuant to paragraph (4)(x) above, the Agent shall
give prompt notice thereof to the Lenders and such Competitive Bid Borrowing
shall not be made.

                  (6) If the Company accepts one or more of the offers made by
any Lender or Lenders pursuant to paragraph (4)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described in
paragraph (3) above, of the date and aggregate amount of such Competitive Bid
Borrowing and whether or not any offer or offers made by such Lender pursuant to
paragraph (3) above have been accepted by the Company, (B) each Lender that is
to make a Competitive Bid Advance as part of such Competitive Bid Borrowing, of
the amount of each Competitive Bid Advance to be made by such Lender as part of
such Competitive Bid Borrowing, and (C) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing, upon receipt,
that the Agent has received forms of documents appearing to fulfill the
applicable conditions set forth in Article III. Each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing shall, before
12:00 noon (New York City time) on the date of such Competitive Bid Borrowing
specified in the notice received from the Agent pursuant to clause (A) of the
preceding sentence or any later time when such Lender shall have received notice
from the Agent pursuant to clause (C) of the preceding sentence, make available
for the account of its Applicable Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's portion of such Competitive Bid
Borrowing. Upon fulfillment of the applicable conditions set forth in Article
III and after receipt by the Agent of such funds, the Agent will make such same
day funds available to the relevant Borrower at such Borrower's account at the
Agent's address referred to in Section 8.02. Promptly after each Competitive Bid
Borrowing the Agent will notify each Lender of the amount of the Competitive Bid
Borrowing, the consequent Competitive Bid Reduction and the dates upon which
such Competitive Bid Reduction commenced and will terminate.

                  (a) Each Competitive Bid Borrowing shall be in an aggregate
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof
and, following the making of each Competitive Bid Borrowing, the Company shall
be in compliance with the limitation set forth in the proviso to the first
sentence of paragraph (1) above.

                  (b) Within the limits and on the conditions set forth in this
Section 2.03, each Borrower may from time to time borrow under this Section
2.03, repay or prepay pursuant to

                                       17
<PAGE>   22
subsection (d) below, and reborrow under this Section 2.03, provided that a
Competitive Bid Borrowing shall not be made within three Business Days of the
date of any other Competitive Bid Borrowing.

                  (c) Each Borrower shall repay to the Agent for the account of
each Lender that has made a Competitive Bid Advance to such Borrower, on the
maturity date of such Competitive Bid Advance (such maturity date being that
specified by the Company for repayment of such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to paragraph (2)
above and provided in the promissory note, if any, evidencing such Competitive
Bid Advance), the then unpaid principal amount of such Competitive Bid Advance.
No Borrower shall have any right to prepay any principal amount of any
Competitive Bid Advance unless (x) such Borrower obtains the prior written
consent of the Lender which made such Competitive Bid Advance, or (y), such
prepayment is made on the terms, specified by the Company for such Competitive
Bid Advance in the related Notice of Competitive Bid Borrowing delivered
pursuant to paragraph (2) above and set forth in the promissory note, if any,
evidencing such Competitive Bid Advance.

                  (d) Each Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance to such Borrower from the date of such
Competitive Bid Advance to the date the principal amount of such Competitive Bid
Advance is repaid in full, at the rate of interest for such Competitive Bid
Advance specified by the Lender making such Competitive Bid Advance in its
notice with respect thereto delivered pursuant to paragraph (3) above, payable
on the interest payment date or dates specified by such Borrower for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to paragraph (2) above, as provided in the promissory note,
if any, evidencing such Competitive Bid Advance.

                  (e) At its option, the Company (on its own behalf and on
behalf of any Borrower) may request a Competitive Bid Borrowing directly from
the Lenders; provided that it follows the procedures set forth in this Section
2.03 and promptly delivers, by telecopier or telex, a copy of the Notice of
Competitive Bid Borrowing and notice in writing of the results of such request
to the Agent.

                  (f) The indebtedness of each Borrower resulting from each
Competitive Bid Advance made to such Borrower as part of a Competitive Bid
Borrowing shall, if requested by the applicable Lender, be evidenced by a
separate promissory note of such Borrower payable to the order of the Lender
making such Competitive Bid Advance.

                  SECTION 2.04 Fees.

                  (a) Facility Fee. The Company agrees to pay to the Agent for
the account of each Lender a facility fee on the aggregate amount of such
Lender's Commitment irrespective of usage from the Effective Date in the case of
each Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each

                                       18
<PAGE>   23
other Lender until the Termination Date (on a daily basis) at the Applicable
Margin, payable in arrears quarterly on the last day of each March, June,
September and December, commencing June 30, 2000, and ending on the Termination
Date.

                  (b) Agent's Fees. The Company shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Company and
the Agent.

                  (c) Usage Fees. The Company shall pay to the Agent for the
account of each Lender, a usage fee of 10 basis points per annum on the amount
of such Lender's Commitment for each day on which the outstanding amount of the
Advances exceeds 33 1/3% of the aggregate Commitments from the Effective Date in
the case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date (on a daily basis) payable in
arrears quarterly on the last day of each March, June, September and December
commencing June 30, 2000 and ending on the Termination Date.

                  SECTION 2.05 Termination, Reduction or Increase of the
Commitments.

                  (a) The Company shall have the right, upon at least three
Business Days' notice to the Agent, to terminate in whole or reduce ratably in
part the unused portions of the respective Commitments of the Lenders, provided
that each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and provided further that (x)
the aggregate amount of the Commitments of the Lenders shall not be reduced to
an amount that is less than the aggregate principal amount of the Competitive
Bid Advances then outstanding, and (y) once terminated, a portion of a
Commitment shall not be reinstated except pursuant to Section 2.05(c).

                  (b) If any Lender shall make a demand under Section 2.11 or
2.14 or if the obligation of any Lender to make Eurodollar Rate Advances shall
have been suspended pursuant to Section 2.12, the Company shall have the right,
upon at least ten Business Days' notice, to terminate in full the Commitment of
such Lender or to demand that such Lender assign to one or more Persons all of
its rights and obligations under this Agreement in accordance with Section 8.07.
If the Company shall elect to terminate in full the Commitment of any Lender
pursuant to this Section 2.05(b), the Company shall pay to such Lender, on the
effective date of such Commitment termination, an amount equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, whereupon such Lender
shall cease to be a party hereto.

                  (c) (i) Not more than once in any calendar year, the Company
may propose to increase the aggregate amount of the Commitments by an aggregate
amount of $25,000,000 or an integral multiple of $1,000,000 in excess thereof (a
"Proposed Aggregate Commitment Increase") in the manner set forth below,
provided that:

                                       19
<PAGE>   24
                  (1) no Default shall have occurred and be continuing either as
         of the date on which the Company shall notify the Agent of its request
         to increase the aggregate amount of the Commitments or as of the
         related Increase Date (as hereinafter defined); and

                  (2) after giving effect to any such increase, the aggregate
         amount of the Commitments shall not exceed $500,000,000.

                  (ii) The Company may request an increase in the aggregate
amount of the Commitments by delivering to the Agent a notice (an "Increase
Notice"; the date of delivery thereof to the Agent being the "Increase Notice
Date") specifying (1) the Proposed Aggregate Commitment Increase, (2) the
proposed date (the "Increase Date") on which the Commitments would be so
increased (which Increase Date may not be fewer than 30 nor more than 60 days
after the Increase Notice Date) and (3) the New Lenders, if any, to whom the
Company desires to offer the opportunity to commit to all or a portion of the
Proposed Aggregate Commitment Increase. The Agent shall in turn promptly notify
each Lender of the Company's request by sending each Lender a copy of such
notice.

                  (iii) Not later than the date five days after the Increase
Notice Date, the Agent shall notify each New Lender, if any, identified in the
related Increase Notice of the opportunity to commit to all or any portion of
the Proposed Aggregate Commitment Increase. Each such New Lender may irrevocably
commit to all or a portion of the Proposed Aggregate Commitment Increase (such
New Lender's "Proposed New Commitment") by notifying the Agent (which shall give
prompt notice thereof to the Company) before 11:00 A.M. (New York City time) on
the date that is 10 days after the Increase Notice Date; provided that:

                  (1) the Proposed New Commitment of each New Lender shall be in
         an amount not less than $25,000,000; and

                  (2) each New Lender that submits a Proposed New Commitment
         shall enter into an agreement in form and substance satisfactory to the
         Company and the Agent pursuant to which such New Lender shall undertake
         a Commitment (and, if any such New Lender is already a Lender, its
         Commitment shall be in addition to such Lender's Commitment hereunder
         on such date), and shall pay to the Agent a processing and recordation
         fee of $3,500.

                  (iv) If the aggregate Proposed New Commitments of all of the
New Lenders shall be less than the Proposed Aggregate Commitment Increase, then
(unless the Company otherwise requests) the Agent shall, on or prior to the date
that is 15 days after the Increase Notice Date, notify each Lender of the
opportunity to so commit to all or any portion of the Proposed Aggregate
Commitment Increase not committed to by New Lenders pursuant to Section
2.05(c)(iii). Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to commit to all or a portion of such remainder (such Lender's
"Proposed Increased Commitment") by notifying the

                                       20
<PAGE>   25
Agent (which shall give prompt notice thereof to the Company) no later than
11:00 A.M. (New York City time) on the date five days before the Increase Date.

                  (v) If the aggregate amount of Proposed New Commitments and
Proposed Increased Commitments (such aggregate amount, the "Total Committed
Increase") equals or exceeds $25,000,000, then, subject to the conditions set
forth in Section 2.05(c)(i):

                  (1) effective on and as of the Increase Date, the aggregate
         amount of the Commitments shall be increased by the lesser of the
         proposed aggregate Committed Increase and the Total Committed Increase
         and shall be allocated among the New Lenders and the Lenders as
         provided in Section 2.05(c)(vi); and

                  (2) on the Increase Date, if any Revolving Loans are then
         outstanding, the Company shall borrow Revolving Loans from all or
         certain of the Lenders and/or (subject to compliance by the Company
         with Section 8.04(d)) prepay Revolving Loans of all or certain of the
         Lenders such that, after giving effect thereto, the Revolving Loans
         (including, without limitation, the Types and Interest Periods thereof)
         shall be held by the Lenders (including for such purposes New Lenders)
         ratably in accordance with their respective Commitments.

If the Total Committed Increase is less than $25,000,000, then the aggregate
amount of the Commitments shall not be changed pursuant to this Section 2.05(c).

                  (vi) The Total Committed Increase shall be allocated among New
Lenders having Proposed New Commitments and Lenders having Proposed Increased
Commitments as follows:

                  (1) If the Total Committed Increase shall be at least
         $25,000,000 and less than or equal to the Proposed Aggregate Commitment
         Increase, then (x) the initial Commitment of each New Lender shall be
         such New Lender's Proposed New Commitment and (y) the Commitment of
         each Lender shall be increased by such Lender's Proposed Increased
         Commitment.

                  (2) If the Total Committed Increase shall be greater than the
         Proposed Aggregate Commitment Increase, then the Total Committed
         Increase shall be allocated:

                               (x) first to New Lenders (to the extent of their
                           respective Proposed New Commitments) in such a manner
                           as the Company shall agree; and

                               (y) then to Lenders on a pro rata basis based on
                           the ratio of each Lender's Proposed Increased
                           Commitment (if any) to the aggregate amount of the
                           Proposed Increased Commitments of all of the Lenders.

                                       21
<PAGE>   26
                  (vii) No increase in the Commitments contemplated hereby shall
become effective until the Agent shall have received (x) promissory notes in
respect of the Revolving Loans payable to each New Lender and each other Lender
whose Commitment is being increased that, in either case, shall have requested
such promissory notes at least two Business Days prior to the Increase Date, and
(y) evidence satisfactory to the Agent (including an update of the opinion of
counsel provided pursuant to Section 3.01 (g)(v)) that such increases in the
Commitments, and borrowings thereunder, have been duly authorized.

                  SECTION 2.06 Repayment of Revolving Credit Advances; Evidence
of Indebtedness; Extension of Termination Date.

                  (a) The Company and each Borrower shall repay to the Agent for
the ratable account of the Lenders on the Termination Date the aggregate
principal amount of the Revolving Credit Advances then outstanding.

                  (b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrowers to
such Lender resulting from each Advance made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder. The Agent shall maintain accounts in which it shall record (i)
the amount of each Advance made hereunder, the Type thereof and the Interest
Period, if any, applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder for
the account of the Lenders and each Lender's share thereof. The entries made in
the accounts maintained pursuant to this Section shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
the Advances in accordance with the terms of this Agreement. Any Lender may
request that Advances made by it be evidenced by a promissory note. In such
event, the applicable Borrower shall prepare, execute and deliver to such Lender
a promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Agent. Thereafter, the Advances evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 8.07)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

                  (c) The Company may by written notice to the Agent, not more
than 45 nor less than 30 days prior to the first anniversary of the date hereof
(such anniversary date following such notice, the "Extension Date"), request
that the Termination Date then in effect be extended for a further period of 364
days. Such request shall be irrevocable and binding upon the Company. The Agent
shall promptly notify each Lender of such request. If a Lender agrees, in its
individual and sole discretion, to so extend its Commitment (an "Extending
Lender"), it will notify the Agent, in writing, of its decision to do so not
more than 30 nor less than 20 days before

                                       22
<PAGE>   27
such anniversary date. The Commitment of any Lender that fails to accept (or
fails to respond to) the Company's request for extension of the Termination Date
(a "Declining Lender") shall be terminated on the Termination Date theretofore
in effect (without regard to extension by other Lenders). The Extending Lenders,
or any of them, shall then have the right to increase their respective
Commitments by an aggregate amount up to the amount of all Declining Lenders'
Commitments, and, to the extent of any shortfall, the Company shall have the
right to require any Declining Lender to assign in full its rights and
obligations under this Agreement to an Eligible Assignee designated by the
Company that agrees to accept all of such rights and obligations (a "Replacement
Lender"), provided that (i) such increase and/or such assignment is otherwise in
compliance with Section 8.07, (ii) such Declining Lender receives payment in
full of an amount equal to the principal amount of all Advances owing to such
Declining Lender, together with accrued interest thereon to the date of such
assignment and all other amounts payable to such Declining Lender under this
Agreement and (iii) any such increase shall be effective on the Extension Date
and any such assignment shall be effective on the date specified by the Company
and agreed to by the Replacement Lender and the Agent. If (i) Extending Lenders
and/or Replacement Lenders provide Commitments in an aggregate amount equal to
51% of the aggregate amount of the Commitments outstanding immediately prior to
the Extension Date in effect at the time the Company requests such extension,
and (ii) no Default shall have occurred and be continuing immediately prior to
the Extension Date, the Termination Date shall be extended by 364 days (except
that, if the date on which the Termination Date is to be extended is not a
Business Day, such Termination Date as so extended shall be the next preceding
Business Day) from the effective date set forth in an Extension Agreement, in
substantially the form in Exhibit A-3 hereto, which has been duly completed and
signed by the Company, the Agent and the Extending Lenders and Replacement
Lenders party thereto. Such Extension Agreement shall be executed and delivered
no earlier than 30 days prior to the Extension Date and the effective date shall
be no earlier than 29 days prior to the Termination Date then in effect. No
extension of the Commitments pursuant to this Section 2.06(c) shall be legally
binding on any party hereto unless and until such party executes and delivers a
counterpart of such Extension Agreement.

                  SECTION 2.07 Interest on Revolving Credit Advances. Each
Borrower shall pay interest on the unpaid principal amount of each Revolving
Credit Advance made to such Borrower owing to each Lender from the date of such
Revolving Credit Advance until such principal amount shall be paid in full, at
the following rates per annum:

                  (a) Base Rate Advances. During such periods as such Revolving
Credit Advance is a Base Rate Advance, a rate per annum equal at all times to
the Base Rate in effect from time to time, payable in arrears quarterly on the
last day of each March, June, September and December during such periods and on
the date such Base Rate Advance shall be Converted or paid in full.

                                       23

<PAGE>   28
                  (b) Eurodollar Rate Advances. During such periods as such
Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at
all times during each Interest Period for such Revolving Credit Advance to the
sum of (x) the Eurodollar Rate for such Interest Period for such Revolving
Credit Advance plus (y) the Applicable Margin, payable in arrears on the last
day of such Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.

                  SECTION 2.08 Interest Rate Determination.

                  (a) If the Eurodollar Rate does not appear on Page 3750 of the
Telerate Service (or any successor page), each Reference Bank agrees to furnish
to the Agent timely information for the purpose of determining each Eurodollar
Rate. If the Eurodollar Rate does not appear on said Page 3750 (or any successor
page), and if any one or more of the Reference Banks shall not furnish such
timely information to the Agent for the purpose of determining any such interest
rate, the Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks. The Agent shall give
prompt notice to the Company and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.07, and the rate, if any,
furnished by each Reference Bank for the purpose of determining the interest
rate under Section 2.07(b).

                  (b) If, due to a major disruption in the interbank funding
market with respect to any Eurodollar Rate Advances, the Required Lenders notify
the Agent that the Eurodollar Rate for any Interest Period for such Advances
will not adequately reflect the cost to such Required Lenders of making, funding
or maintaining their respective Eurodollar Rate Advances for such Interest
Period, the Agent shall forthwith so notify the Borrower and the Lenders,
whereupon (i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance,
and (ii) the obligation of the Lenders to make, or to Convert Revolving Credit
Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Company and the Lenders that the circumstances causing such
suspension no longer exist.

                  (c) If the Company shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Company and the Lenders and the Company will
be deemed to have selected an Interest Period of one month.

                  (d) If the aggregate unpaid principal amount of Eurodollar
Rate Advances comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances on the last day of the Interest
Period applicable thereto.

                                       24
<PAGE>   29
                  (e) Upon the occurrence and during the continuance of any
Event of Default, (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.

                  (f) If the Eurodollar Rate does not appear on Page 3750 of the
Telerate Service (or any successor page) and fewer than two Reference Banks
furnish timely information to the Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,

                  (i) the Agent shall forthwith notify the Company and the
Lenders that the interest rate cannot be determined for such Eurodollar Rate
Advances,

                  (ii) each such Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance (or
if such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance), and

                  (iii) the obligation of the Lenders to make, or to Convert
Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Company and the Lenders that the circumstances
causing such suspension no longer exist.

                  SECTION 2.09 Optional Conversion of Revolving Credit Advances.
The Company may on any Business Day, upon notice given to the Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Sections 2.08 and
2.12, Convert all Revolving Credit Advances of one Type comprising the same
Borrowing into Revolving Credit Advances of the other Type; provided, however,
that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be
made only on the last day of an Interest Period for such Eurodollar Rate
Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be in an amount not less than the minimum amount specified in Section
2.02(2) and no Conversion of any Revolving Credit Advances shall result in more
separate Revolving Credit Borrowings than permitted under Section 2.02(2). Each
such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Revolving Credit Advances to
be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for each such Advance. Each notice of
Conversion shall be irrevocable and binding on the Company.

                  SECTION 2.10 Optional Prepayments of Revolving Credit
Advances. The Company may, upon notice not later than 11:00 A.M. (New York City
time) on the date of such payment, in the case of Base Rate Advances, and two
Business Days' notice, in the case of Eurodollar Rate Advances, to the Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Company shall, prepay the outstanding principal
amount of the Revolving Credit Advances comprising part of the same Revolving
Credit Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment

                                       25
<PAGE>   30
on the principal amount prepaid; provided, however, that (x) each partial
prepayment shall be in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) in the event of any
such prepayment of a Eurodollar Rate Advance, the Company shall be obligated to
reimburse the Lenders in respect thereof pursuant to Section 8.04(d).

                  SECTION 2.11 Increased Costs.

                  (a) If, due to either (i) the introduction of or any change in
any law or regulation or in the interpretation or administration of any law or
regulation by any governmental authority charged with the interpretation or
administration thereof or (ii) the compliance with any guideline or request from
any central bank or other governmental authority that would be complied with
generally by similarly situated banks acting reasonably (whether or not having
the force of law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Advances or
LIBO Rate Advances by an amount deemed by such Lender to be material, then the
Company shall from time to time, upon demand by such Lender (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Company
and the Agent by such Lender, shall be conclusive and binding for all purposes,
absent manifest error. Notwithstanding the foregoing, no Lender shall be
entitled to request compensation under this paragraph with respect to any
Competitive Bid Advance if the change giving rise to such request was applicable
to such Lender at the time of submission of such Lender's offer to make such
Competitive Bid Advance.

                  (b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) compliance with any
guideline or request from any central bank or other governmental or regulatory
authority which becomes effective after the date hereof, there shall be any
increase in the amount of capital required or expected to be maintained by any
Lender or any corporation controlling such Lender and the amount of such capital
is increased by or based upon the existence of such Lender's Advances or
commitment to lend hereunder and other commitments of this type by an amount
deemed by such Lender to be material, then, upon demand by such Lender (with a
copy of such demand to the Agent), the Company shall pay to the Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender's Advances or commitment to lend hereunder. A certificate as to such
amounts submitted to the Company and the Agent by such Lender shall be
conclusive and binding for all purposes as to the calculations therein, absent
manifest error. Such certificate shall be in reasonable detail and shall certify
that the claim for additional amounts referred to therein is generally
consistent with such Lender's treatment of similarly situated customers of such
Lender whose transactions with such Lender are similarly affected by the change
in circumstances giving rise to such payment, but such Lender shall not be
required to disclose any confidential or proprietary information therein.

                                       26
<PAGE>   31
                  SECTION 2.12 Illegality. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Agent (and provide to the
Company an opinion of counsel to the effect) that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for such Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or LIBO Rate Advances or to fund or
maintain Eurodollar Rate Advances or LIBO Rate Advances hereunder, (i) each
Eurodollar Rate Advance or LIBO Rate Advance, as the case may be, of such Lender
will automatically, upon such demand, Convert into a Base Rate Advance or an
Advance that bears interest at the rate set forth in Section 2.07(a), as the
case may be, and (ii) the obligation of such Lender to make, or to Convert
Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Company and such Lender that the circumstances
causing such suspension no longer exist and such Lender shall make the Base Rate
Advances in the amount and on the dates that it would have been requested to
make Eurodollar Rate Advances had no such suspension been in effect.

                  SECTION 2.13 Payments and Computations.

                  (a) Each Borrower shall make each payment hereunder not later
than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Agent at the Agent's Account in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees or usage fees ratably (other than amounts
payable pursuant to Section 2.03, 2.04(b), 2.05(b), 2.11, 2.14 or 8.04(d)) to
the Lenders for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.

                  (b) All computations of interest based on the Base Rate and of
facility fees and of usage fees shall be made by the Agent on the basis of a
year of 365 or 366 days, as the case may be, and all computations of interest
based on the Eurodollar Rate or the Federal Funds Rate shall be made by the
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or facility fees or usage fees are payable. Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

                                       27
<PAGE>   32

            (c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or facility fee or usage fee, as the case may
be; provided, however, that, if such extension would cause payment of interest
on or principal of Eurodollar Rate Advances or LIBO Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.

            (d) Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Lenders hereunder that a
Borrower will not make such payment in full, the Agent may assume that such
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent such Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.

            SECTION 2.14   Taxes.

            (a) Each Lender is exempt from any withholding imposed under the
laws of the United States in respect of any fees, interest or other payments to
which it is entitled pursuant to this Agreement or any promissory notes issued
hereunder (the "Income") because (i) the Lender is organized under the laws of
the United States; (ii) the Income is effectively connected with the conduct of
a trade or business within the United States within the meaning of Section 871
of the Internal Revenue Code; or (iii) the Income is eligible for an exemption
by reason of a tax treaty. The Agent is exempt from any withholding tax imposed
under the laws of the United States in respect of the Income because the Agent
is organized under the laws of the United States.

            (b) Each Lender organized under the laws of a jurisdiction outside
the United States (each, a "Foreign Lender") shall, on or prior to the date of
its execution and delivery of this Agreement in the case of each Initial Lender,
and on the date of the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Foreign Lender and from time to time thereafter
if requested in writing by the Company or the Agent, provide the Agent and the
relevant Borrower with Internal Revenue Service Form W-8BEN or W-8ECI, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Foreign Lender is exempt or entitled to a reduced
rate of United States withholding tax on any Income that is the subject of such
forms. If the form provided by a Foreign Lender at the time such Foreign Lender
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, or in excess of the rate applicable to
the Foreign Lender assignor on the date of the Assignment and Acceptance
pursuant to which it became a Foreign

                                       28
<PAGE>   33
Lender, in the case of each other Foreign Lender, withholding tax at such rate
shall be considered excluded from Taxes as defined in Section 2.14(c).

            (c) Based on Section 2.14(a) and (b), any and all payments by any
Borrower hereunder or under any promissory notes issued hereunder shall be made
free and clear of and without deduction for any present United States federal
income withholding taxes imposed on a Foreign Lender under the Internal Revenue
Code (such withholding taxes being hereinafter referred to as "Taxes").

            (d) If, as a result of the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any United States law or any
tax treaty (or in the application or official interpretation of any law or any
tax treaty) that occurs on or after the date a Foreign Lender first becomes a
party to this Agreement (a "Change in Law"), a Foreign Lender cannot comply with
Section 2.14(b) or, if despite such compliance, any Borrower shall be required
to deduct any Taxes from or in respect of any Income, then: (i) the sum payable
to such Foreign Lender shall be increased as may be necessary so that after
making all required deductions for such Taxes (including deductions applicable
to additional sums payable under this Section 2.14) such Foreign Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. Notwithstanding the foregoing, each
Borrower shall be entitled to pay any Taxes in any lawful manner so as to reduce
any deductions and such Foreign Lender shall to the extent it is reasonably able
provide any documentation or file any forms as may be required by the Internal
Revenue Service or any other foreign governmental agency. In addition, if any
Foreign Lender or the Agent (in lieu of such Foreign Lender), as the case may
be, is required to pay directly any Taxes as a result of a Change in Law because
a Borrower cannot or does not legally or timely do so, the Company shall
indemnify such Foreign Lender or Agent for payment of such Taxes, without
duplication of, or increase in, the amount of Taxes otherwise due to the Foreign
Lender.

            (e) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (excluding any income or franchise taxes, business taxes or
capital taxes of any nature) that arise from the execution, delivery or
registration of, or otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes"). If a Lender is required to pay directly Other
Taxes because a Borrower cannot or does not legally or timely do so, the Company
shall indemnify such Lender for such payment of Other Taxes.

            (f) Within 30 days after the date of any payment of Taxes or foreign
withholding taxes, the Company shall furnish to the Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing payment thereof. Prior to making any payment hereunder by or on
behalf of any Borrower through an account or branch outside the United States or
on behalf of any Borrower by a payor that is not a United States person (a
"Foreign Payment"), such Borrower shall determine that no foreign withholding
taxes are payable in

                                       29
<PAGE>   34
respect thereof, and at its expense, shall furnish, or shall cause such payor to
furnish, to the Agent, at such address, a certificate from each appropriate
taxing authority, or an opinion of counsel acceptable to the Agent, in either
case stating that such Foreign Payment is exempt from or not subject to foreign
withholding taxes. Each Lender shall cooperate with each Borrower's efforts
described in this subsection by providing to the extent reasonably within its
means any forms requested by such Borrower substantiating an exemption from
foreign withholding taxes required by any governmental agency. For purposes of
this subsection (f), the terms "United States" and "United States person" shall
have the meaning specified in Section 7701 of the Internal Revenue Code. If, as
a result of the enactment, promulgation, execution or ratification of, or any
change in or amendment to, any applicable foreign law or any tax treaty (or in
the application or official interpretation of any law or any tax treaty) that
occurs on or after the date a tax opinion is rendered pursuant to the terms of
this subsection, and which renders such tax opinion incorrect as to the absence
of any foreign withholding tax (a "Foreign Change in Law"), any Borrower shall
be required to deduct any foreign withholding taxes from or in respect of any
Income, then: (i) the sum payable to the applicable Lender shall be increased as
may be necessary so that after making all required deductions for foreign
withholding taxes (including deductions applicable to additional sums payable
under this Section 2.14) such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
make such deductions and (iii) such Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. Notwithstanding the foregoing, each Borrower shall be entitled
to pay any foreign withholding taxes in any lawful manner so as to reduce any
deductions and such Lender shall to the extent it is reasonably able provide any
documentation or file any forms as may be required by the Internal Revenue
Service or any other foreign governmental agency. In addition, if any Lender is
required to pay directly any foreign withholding tax in respect of any Foreign
Payments made pursuant to this Agreement because a Borrower cannot or does not
legally or timely do so, the Company shall indemnify such Lender for payment of
such tax.

            (g) For any period with respect to which a Lender has failed to
comply with the requirements of subsection (b) or (f) relating to certain forms
intended to reduce withholding taxes (other than if such failure is due to a
Change in Law or a Foreign Change in Law), such Lender shall not be entitled to
indemnification under subsection (d) or (f).

            (h) Upon a Change in Law or the imposition of any foreign
withholding tax in respect of Foreign Payments, a Lender shall, upon the written
request of and at the expense of the Company, use reasonable efforts to change
the jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such taxes that may
thereafter accrue and would not, in the reasonable judgment of such Lender,
cause the imposition on such Lender of any material legal or regulatory burdens.

            (i) Without prejudice to the survival of any other agreement of any
Borrower hereunder, the agreements and obligations of the Company contained in
this Section 2.14 shall

                                       30
<PAGE>   35
survive the payment in full of principal and interest hereunder until the
applicable statute of limitations relating to the payment of any Taxes under
Section 2.14(d) has expired.

            (j) Any request by any Lender for payment of any amount under this
Section 2.14 shall be accompanied by a certification that such Lender's claim
for said amount is generally consistent with such Lender's treatment of
similarly situated customers of such Lender whose transactions with such Lender
are similarly affected by the change in circumstances giving rise to such
payment, but such Lender shall not be required to disclose any confidential or
proprietary information therein.

            SECTION 2.15 Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Revolving Credit Advances owing to
it (other than pursuant to Section 2.05(b), 2.11, 2.14 or 8.04(d)) in excess of
its ratable share of payments on account of the Revolving Credit Advances
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Revolving Credit Advances owing to them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation.

            SECTION 2.16 Use of Proceeds. The proceeds of the Advances shall be
available (and the Company agrees that such proceeds shall be used) for general
corporate purposes of the Company and its Subsidiaries, including commercial
paper backstop.

            SECTION 2.17   Borrowings by Borrowing Subsidiaries; Substitution
of Borrower.

            (a) The Company may, at any time or from time to time, designate one
or more Subsidiaries (including the Guarantor) as Borrowers hereunder by
furnishing to the Agent a letter (a "Designation Letter") in duplicate, in
substantially the form of Exhibit D, duly completed and executed by the Company
and such Subsidiary. Upon any such designation of a Subsidiary, such Subsidiary
shall be a Borrowing Subsidiary and a Borrower entitled to borrow Revolving
Credit Advances and Competitive Bid Advances on and subject to the terms and
conditions of this Agreement.

                                       31
<PAGE>   36
            (b) If all principal of and interest on all Advances made to any
Borrowing Subsidiary have been paid in full, the Company may terminate the
status of such Borrowing Subsidiary as a Borrower hereunder by furnishing to the
Agent a letter (a "Termination Letter") in substantially the form of Exhibit F,
duly completed and executed by the Company. Any Termination Letter furnished
hereunder shall be effective upon receipt by the Agent, which shall promptly
notify the Lenders, whereupon the Lenders shall, upon payment in full of all
amounts owing by such Borrower hereunder, promptly deliver to the Company
(through the Agent) the promissory notes, if any, of such former Borrower.
Notwithstanding the foregoing, the delivery of a Termination Letter with respect
to any Borrower shall not terminate (i) any obligation of such Borrower that
remains unpaid at the time of such delivery (including without limitation any
obligation arising thereafter in respect of such Borrower under Section 2.11 or
2.14) or (ii) the obligations of the Company under Article IX with respect to
any such unpaid obligations; provided, that if the status of such Borrowing
Subsidiary has been terminated as aforesaid because the Company has sold or
transferred its interest in such Subsidiary, and the Company so certifies to the
Agent at the time of delivery of such Termination Letter, and subject to payment
of said principal and interest, (i) such Subsidiary shall, automatically upon
the effectiveness of the delivery of such Termination Letter and certification,
cease to have any obligation under this Agreement and (ii) the Company shall
automatically be deemed to have unconditionally assumed, as primary obligor, and
hereby agrees to pay and perform, all of such obligations.

            (c) In addition to the foregoing, the Company may, at any time when
there are no Advances outstanding hereunder and upon not less than 10 Business
Days' notice, irrevocably elect to terminate its right to be a Borrower
hereunder as of the date (which shall be a Business Day) specified in such
Substitution Letter (the "Substitution Date") and designate the Guarantor as a
Borrower hereunder by furnishing to the Agent (x) a letter (a "Substitution
Letter"), in substantially the form of Exhibit E duly completed and executed by
the Company and the Guarantor, (y) a certificate signed by a duly authorized
officer of the Company, and a certificate signed by a duly authorized officer of
the Guarantor, each dated the Substitution Date, stating that:

            (i) the representations and warranties contained in Section 4.01
(except the representations set forth in the last sentence of subsection (e)
thereof and in subsection (f) thereof (other than clause (ii) thereof)) are
correct in all material respects on and as of the Substitution Date, as though
made on and as of such date, and

            (ii) No event has occurred and is continuing, or would result from
such designation, that constitutes a Default;

and (z) the Agent shall have received such other corporate documents,
resolutions and legal opinions relating to the foregoing as it, or any Lender
through the Agent, may reasonably request.

                                       32
<PAGE>   37
            SECTION 2.18 Mitigation Obligations. If any Lender requests
compensation under Section 2.11, or if the obligation of any Lender to make or
continue Advances as, or Convert Advances into, Eurodollar Rate Advances is
suspended pursuant to Section 2.12, then, upon the written request of the
Company, such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designations or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.11 or would
cause such Lender not to be subject to such suspension, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not, in the reasonable judgment of such Lender, cause
imposition on such Lender of any material legal or regulatory burdens or
otherwise be disadvantageous to such Lender. The Company hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

                                   ARTICLE III
                   CONDITIONS TO EFFECTIVENESS AND ARTICLE II

            SECTION 3.01 Conditions Precedent to Effectiveness of Sections 2.01
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
as of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:

            (a) As of the Effective Date, there shall have occurred no Material
Adverse Change since December 25, 1999 that has not been publicly disclosed.

            (b) As of the Effective Date, there shall exist no action, suit,
investigation, litigation or proceeding affecting the Company, or any of its
Subsidiaries (including the Guarantor) pending or, to the knowledge of the
Company's or the Guarantor's executive officers, threatened before any court,
governmental agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect or (ii) could reasonably be likely to affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby.

            (c) As of the Effective Date, nothing shall have come to the
attention of the Lenders during the course of their due diligence investigation
to lead them to believe that the Information Memorandum was or has become
misleading, incorrect or incomplete in any material respect.

            (d) As of the Effective Date, all governmental and third party
consents and approvals necessary in connection with the transactions
contemplated hereby shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lenders) and shall remain in effect.

                                       33
<PAGE>   38
            (e) As of the Effective Date, the Company shall have paid all
accrued fees and expenses of the Agent and the Lenders (including the accrued
fees and expenses of counsel to the Agent, to the extent invoiced at least one
Business Day prior to the Effective Date).

            (f) On the Effective Date, the following statements shall be true
and the Agent shall have received for the account of each Lender a certificate
signed by a duly authorized officer of the Company dated the Effective Date,
stating that:

            (i) The representations and warranties contained in Section 4.01 are
correct in all material aspects on and as of the Effective Date, and

            (ii) No event has occurred and is continuing that constitutes a
Default.

            (g) The Agent shall have received on or before the Effective Date
the following, each dated such day, in form and substance satisfactory to the
Agent and (except for any notes requested by the Lenders) in sufficient copies
for each Lender:

            (i) To the extent any Lender shall have requested, at least one
Business day prior to the Effective Date that its Revolving Credit Advances be
evidenced by a promissory note, a note payable to the order of such Lender.

            (ii) Certified copies of the resolutions of the Board of Directors
of the Company and of the Guarantor approving this Agreement, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement.

            (iii) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers of the
Company authorized to sign this Agreement and the other documents to be
delivered hereunder.

            (iv) A certificate of the Secretary or an Assistant Secretary of the
Guarantor certifying the names and true signatures of the officers of the
Guarantor authorized to sign this Agreement and the other documents to be
delivered hereunder.

            (v) An opinion of Pamela O'Brien, General Counsel of each of the
Company and the Guarantor, substantially in the form of Exhibit C hereto and as
to such other matters as any Lender through the Agent may reasonably request.

            (vi) A favorable opinion of Milbank, Tweed, Hadley & McCloy LLP,
special New York counsel for the Agent.

            (vii) The Agent shall have received such other approvals, opinions
or documents as any Lender through the Agent may reasonably request.

                                       34
<PAGE>   39
            SECTION 3.02 Conditions Precedent to Each Revolving Credit
Borrowing. The obligation of each Lender to make a Revolving Credit Advance on
the occasion of each Revolving Credit Borrowing shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the date
of such Revolving Credit Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Revolving Credit Borrowing
and the acceptance by any Borrower of the proceeds of such Revolving Credit
Borrowing shall constitute a representation and warranty by the Company and such
Borrower that on the date of such Borrowing such statements are true):

            (i) The representations and warranties contained in Section 4.01
(except the representations set forth in the last sentence of subsection (e)
thereof and in subsection (f) thereof (other than clause (ii) thereof)) are
correct in all material respects on and as of the date of such Revolving Credit
Borrowing, before and after giving effect to such Revolving Credit Borrowing and
to the application of the proceeds therefrom, as though made on and as of such
date, and

            (ii) No event has occurred and is continuing, or would result from
such Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;

and (b) in the case of the first Borrowing by a Borrowing Subsidiary, the Agent
shall have received such corporate documents, resolutions and legal opinions
relating to such Borrowing Subsidiary as the Agent may reasonably require.

            SECTION 3.03 Conditions Precedent to Each Competitive Bid Borrowing.
The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, and (ii) on the date of such
Competitive Bid Borrowing the following statements shall be true (and each of
the giving of the applicable Notice of Competitive Bid Borrowing and the
acceptance by any Borrower of the proceeds of such Competitive Bid Borrowing
shall constitute a representation and warranty by the Company and such Borrower
that on the date of such Competitive Bid Borrowing such statements are true):

            (a) The representations and warranties contained in Section 4.01
(except the representations set forth in the last sentence of subsection (e)
thereof and in subsection (f) thereof (other than clause (ii) thereof)) are
correct in all material respects on and as of the date of such Competitive Bid
Borrowing, before and after giving effect to such Competitive Bid Borrowing and
to the application of the proceeds therefrom, as though made on and as of such
date; and

                                       35
<PAGE>   40
            (b) No event has occurred and is continuing, or would result from
such Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.

            SECTION 3.04 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the proposed Effective
Date, as notified by the Company to the Lenders, specifying its objection
thereto. The Agent shall promptly notify the Lenders of the occurrence of the
Effective Date.

                                   ARTICLE IV
               REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

            SECTION 4.01 Representations and Warranties of the Loan Parties.
Each of the Company and the Guarantor (each, a "Loan Party") represents and
warrants as follows:

            (a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and the Guarantor
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.

            (b) The execution, delivery and performance by each Loan Party of
this Agreement and the consummation of the transactions contemplated hereby, are
within such Loan Party's powers, have been duly authorized by all necessary
corporate or other action, and do not contravene (i) its charter, by-laws or
other organizational documents or (ii) any law or contractual restriction
binding on or materially affecting such Loan Party.

            (c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any other
third party is required for the due execution, delivery and performance by
either Loan Party of this Agreement.

            (d) This Agreement has been duly executed and delivered by each Loan
Party. This Agreement is the legal, valid and binding obligation of each Loan
Party enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and equitable principles of general applicability.

                                       36
<PAGE>   41
            (e) The combined balance sheet of the Company as at December 25,
1999, and the related combined statements of operations and cash flows of the
Company for the fiscal year then ended, accompanied by an opinion of KPMG Peat
Marwick, independent public accountants, fairly present the financial condition
of the Company as at such date and the results of the operations of the Company
for the period ended on such date, all in accordance with generally accepted
accounting principles consistently applied. Since December 25, 1999, there has
been no Material Adverse Change that has not been publicly disclosed.

            (f) There is no pending or threatened action, suit, investigation,
litigation or proceeding affecting either Loan Party before any court,
governmental agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect or (ii) would reasonably be likely to affect the
legality, validity or enforceability of this Agreement or any promissory note
issued under this Agreement, if any, or the consummation of the transactions
contemplated hereby.

            (g) It is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any margin stock or to
extend credit to others for the purpose (whether immediate, individual or
ultimate) of purchasing or carrying any margin stock, in either case in a manner
that would cause the Advances or any Lender to be in violation of Regulation U.

            (h) Following application of the proceeds of each Advance, not more
than 25 percent of the value of the assets (either of any Borrower only or of
the Company and its Subsidiaries or the Guarantor and its Subsidiaries, in each
case on a Consolidated basis) subject to the provisions of Section 5.02(a) or
(b)(ii) or subject to any restriction contained in any agreement or instrument
between it and any Lender or any Affiliate of any Lender relating to Debt and
within the scope of Section 6.01 (d) will be margin stock.

            (i) Neither Loan Party is an "investment company", a company
"controlled by", or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended. Neither the making of any Advances nor the application of the proceeds
or repayment thereof by any Borrower will violate any provision of such Act or
any rule, regulation or order of the Securities and Exchange Commission
thereunder.

                                       37
<PAGE>   42
                                    ARTICLE V
                                    COVENANTS

            SECTION 5.01 Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, each Loan Party
will:

            (a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA and Environmental Laws, except where failure so to comply
would not, and would not be reasonably likely to, have a Material Adverse
Effect.

            (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither Loan Party nor
any of its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained, unless
and until any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors and such Lien would be reasonably likely
to have a Material Adverse Effect.

            (c) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory) and franchises; provided,
however, that each Loan Party and its Material Subsidiaries may consummate any
merger or consolidation permitted under Section 5.02(b) and provided further
that neither Loan Party nor any of its Material Subsidiaries shall be required
to preserve any right or franchise if the Board of Directors of such Loan Party
or such Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Loan Party or such Subsidiary,
as the case may be, and that the loss thereof is not disadvantageous in any
material respect to such Loan Party, such Subsidiary or the Lenders.

            (d)   Reporting Requirements.  Furnish to the Lenders:

            (i) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year of the
Company, the Consolidated balance

                                       38
<PAGE>   43
sheet of the Company and its Subsidiaries as of the end of such quarter and
Consolidated statements of operations and cash flows of the Company and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, duly certified (subject to
year-end audit adjustments) by the chief financial officer of the Company as
having been prepared in accordance with GAAP, it being agreed that delivery of
the Company's Quarterly Report on Form 10-Q will satisfy this requirement;

            (ii) as soon as available and in any event within 90 days after the
end of each Fiscal Year of the Company, a copy of the annual audit report for
such year for the Company and its Subsidiaries, containing the Consolidated
balance sheet of the Company and its Subsidiaries as of the end of such Fiscal
Year and Consolidated statements of operations and cash flows of the Company and
its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion by
KPMG Peat Marwick or other independent public accountants of nationally
recognized standing, it being agreed that delivery of the Company's Annual
Report on Form 10-K will satisfy this requirement;

            (iii) as soon as possible and in any event within five days after
the occurrence of each Default continuing on the date of such statement, a
statement of the chief financial officer of the Company setting forth details of
such Default and the action that the Company has taken and proposes to take with
respect thereto; and

            (iv) promptly after the sending or filing thereof, copies of all
annual reports and proxy solicitations that the Company sends to any of its
securityholders, and copies of all reports on Form 8-K that the Company or any
Subsidiary files with the Securities and Exchange Commission.

            SECTION 5.02 Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, neither Loan Party
will:

            (a) Secured Debt. Create or suffer to exist, or permit any of its
Restricted Subsidiaries to create or suffer to exist, any Debt secured by a Lien
on any Principal Property or on any shares of stock of or Debt of any Restricted
Subsidiary unless such Loan Party or such Restricted Subsidiary secures or
causes such Restricted Subsidiary to secure the Advances and all other amounts
payable under this Agreement equally and ratably with such secured Debt, so long
as such secured Debt shall be so secured, unless after giving effect thereto the
aggregate amount of all such Debt so secured does not exceed 15% of Consolidated
Net Tangible Assets, provided that the foregoing restriction does not apply to
Debt secured by:

            (i)  Liens existing prior to the date hereof;

                                       39
<PAGE>   44
            (ii) Liens on property of, or on shares of stock of or Debt of, any
corporation existing at the time such corporation becomes a Restricted
Subsidiary;

            (iii) Liens in favor of a Loan Party or any Restricted Subsidiary;

            (iv) Liens in favor of any governmental bodies to secure progress or
advance payments;

            (v) Liens on property, shares of stock or Debt existing at the time
of acquisition thereof (including acquisition through merger or consolidation)
or liens securing Debt incurred to finance all or any part of the purchase price
or cost of construction of property (or additions, substantial repairs,
alterations or substantial improvements thereto), provided that such Lien and
the Debt secured thereby are incurred within 365 days of the later of
acquisition or completion of construction (or addition, repair, alteration or
improvement) and full operation thereof; and

            (vi) any extension, renewal or refunding of Debt referred to in the
foregoing clauses (i) to (v), inclusive.

            (b) Mergers, Etc. (i) Merge or consolidate with or into any
corporation or (ii) sell, lease, transfer or otherwise dispose of all or
substantially all of the assets of the Company and its Subsidiaries, taken as a
whole, unless the Company or the Guarantor would be the acquiring or surviving
party in such transaction and no Event of Default shall have occurred and be
continuing at the time of such proposed transaction or would result therefrom.

            (c) Subsidiary Debt. Permit any Restricted Subsidiary to create,
incur, assume or permit to exist any Debt, except:

            (i) Debt of the Guarantor and Borrowing Subsidiaries, if any,
created hereunder and under the 5-Year Facility;

            (ii)  Debt existing on the Effective Date;

            (iii) Debt of the Guarantor constituting guaranties of Debt of the
Company;

            (iv) Debt of any Subsidiary to any Loan Party or any other
Subsidiary;

            (v) Debt of any Person that becomes a Subsidiary after the date
hereof; provided that such Debt exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary;

            (vi) any refinancing, refunding or replacement of any Debt permitted
under clause (ii) through (v) above; and

                                       40
<PAGE>   45
            (vii) other Debt in an aggregate principal amount not exceeding 15%
of Consolidated Net Tangible Assets at any time outstanding;

provided, that the foregoing provisions of this Section 5.02(c) shall cease to
apply to the Guarantor from and after the occurrence of the Substitution Date as
provided in Section 2.17.

            (d) Restrictive Agreements. Neither Loan Party will enter into,
incur or permit to exist any agreement or other arrangement that prohibits or
restricts the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to, or otherwise transfer assets to the Company; provided that the
foregoing shall not apply to (i) restrictions and conditions imposed by law or
by this Agreement or the 5-Year Facility, (ii) customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iii)
restrictions or conditions imposed by any agreement relating to secured Debt
permitted by this Agreement if such restrictions or conditions apply only to the
property or assets securing such Debt, (iv) customary provisions in leases and
other contracts restricting the assignment thereof, (v) any agreement in effect
on the Effective Date, as any such agreement is in effect on such date, (vi) any
agreement binding upon such Subsidiary prior to the date on which such
Subsidiary was acquired by the Company and outstanding on such date, (vii)
customary net worth and other financial maintenance covenants in an agreement
relating to Debt or other obligations incurred in compliance with this
Agreement, and (viii) any agreement refinancing, renewing or replacing any
agreement or Debt referred to in (i) through (vii) above, provided that the
relevant provisions are no more restrictive than those in the agreement or Debt
being refinanced, renewed or replaced.

            (e) Ownership. In the case of the Company, cease to own, legally and
beneficially, 75% or more of the membership interests in the Guarantor.

            SECTION 5.03 Financial Covenants.  So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will not:

            (a) Debt to Capitalization Ratio. Permit the Debt to Capitalization
Ratio as at the last day of any Fiscal Quarter that is not an Alternate Covenant
Date to exceed 0.75 to 1.0.

            (b) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any Fiscal Quarter that is an Alternate Covenant
Date to exceed 5.0 to 1.0.

                                       41
<PAGE>   46
                                   ARTICLE VI
                                EVENTS OF DEFAULT

            SECTION 6.01 Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:

            (a) Any Borrower shall fail to pay any principal of, or interest on,
any Advance or to make any other payment under this Agreement, in each case
within five days after the same becomes due and payable; or

            (b) Any representation or warranty made by any Loan Party herein or
by any Borrower (or any of its officers) in connection with this Agreement
(including without limitation by any Borrowing Subsidiary pursuant to any
Designation Letter) shall prove to have been incorrect in any material respect
when made; or

            (c) (i) Any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d), 5.02 or 5.03, or (ii) any
Loan Party shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement on its part to be performed or observed if
such failure shall remain unremedied for 30 days after written notice thereof
shall have been given to either Loan Party by the Agent or any Lender; or

            (d) Any Loan Party or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt that is outstanding in a
principal or notional amount of at least $50,000,000 in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such Subsidiary (as
the case may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate the maturity of such Debt or permit (with or without
the giving of notice, the lapse of time or both) the holder or holders of such
Debt or any trustee or agent on its or their behalf to cause any such Debt to
become due prior to its scheduled maturity; or any such Debt shall be declared
to be due and payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or defeased,
or an offer to prepay, redeem, purchase or defease such Debt shall be required
to be made, in each case prior to the stated maturity thereof; or

                                       42
<PAGE>   47
            (e) Any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against such Loan
Party or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
such Loan Party of any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or

            (f) Any judgment or order for the payment of money in excess of
$50,000,000 shall be rendered against any Loan Party or any of its Material
Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; provided,
however, that any such judgment or order shall not be an Event of Default under
this Section 6.01(f) if and for so long as (i) the amount of such judgment or
order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such insurer, which
shall be rated at least "A" by A.M. Best Company, has been notified of, and has
not disputed the claim made for payment of, the amount of such judgment or
order; or

            (g) Any event, action or condition with respect to an employee
benefit plan of the Company subject to Title IV of ERISA results in any penalty
or action pursuant to ERISA that has a material adverse effect on the business
or financial condition of either Loan Party and its Subsidiaries, taken as a
whole; or

            (h) The Master Bottling Agreement ceases to be valid and binding and
in full force and effect; or Pepsi denies that it has any liability or
obligation under the Master Bottling Agreement and Pepsi ceases performance
thereunder; or

            (i)   A Change of Control shall occur;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Company, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Company, declare the

                                       43
<PAGE>   48
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company; provided, however, that in the event
of an actual or deemed entry of an order for relief with respect to any Loan
Party or any Borrowing Subsidiary under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated and
(B) the Advances, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, protest or any notice of any
kind, all of which are hereby expressly waived by each Loan Party.

                                   ARTICLE VII
                                    THE AGENT

            Each of the Lenders hereby irrevocably appoints the Agent as its
agent and authorizes the Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.

            The bank serving as the Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Agent, and such bank and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Loan Parties or any Subsidiary or other Affiliate thereof as if it were
not the Agent hereunder.

            The Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) the Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Agent is required to exercise in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 8.01), and (c) except
as expressly set forth herein, the Agent shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
the Loan Parties or any if their Subsidiaries that is communicated to or
obtained by the bank serving as Agent or any of its Affiliates in any capacity.
The Agent shall not be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 8.01) or in the absence of its own gross negligence or
wilful misconduct. The Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the Agent by a Loan
Party or a Lender, and the Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this

                                       44
<PAGE>   49
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article III or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Agent.

            The Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for any
Loan Party), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

            The Agent may perform any and all of its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Agent. The Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.

            Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, the Agent may resign at any time by notifying the
Lenders and the Company. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor agent approved by the Company, which
approval will not be unreasonably withheld or delayed; provided that such
approval shall not be required if an Event of Default has occurred and is
continuing. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a commercial bank organized
under the laws of the United States or any State thereof, having a combined
capital and surplus of at least $50,000,000 with an office in New York, New
York, or an Affiliate of any such bank. Upon the acceptance of its appointments
as Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Company to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Company and such successor. After the Agent's resignation hereunder, the
provisions of this Article and Section 8.04 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.

                                       45
<PAGE>   50
            Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.

                                  ARTICLE VIII
                                  MISCELLANEOUS

            SECTION 8.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by any Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (a) except
pursuant to Section 2.05(b), 2.05(c), 2.15 or 2.17, increase the Commitments of
the Lenders or subject the Lenders to any additional obligations, (b) reduce the
principal of, or interest on, the Revolving Credit Advances or any fees or other
amounts payable hereunder, (c) postpone any date fixed for any payment of
principal of, or interest on, the Revolving Credit Advances or any fees or other
amounts payable hereunder, (d) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Revolving Credit Advances, or the
number of Lenders, that shall be required for the Lenders or any of them to take
any action hereunder, (e) release the guarantee as set forth in Section 9.01 or
10.01, or (f) amend this Section 8.01; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of the Agent under this Agreement.

            SECTION 8.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to the Company, any Borrower or the Guarantor, to the Company at its address
at One Pepsi Way, Somers, New York 10589, Attention: General Counsel, Telecopier
No. (914) 767-1161, with a copy to Secretary, Telecopier No. (914) 767-1161; if
to any Initial Lender, at its Domestic Lending Office specified opposite its
name on Schedule 1 hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender; and if to the Agent, at The Chase Manhattan Bank, Loan and Agency
Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New York, 10081,
Attention of Nina Wang (Telecopy No. (212) 552-7500), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention of Randolph
Cates (Telecopy No. (212) 270-1403); or, as to the Company, any Borrower, the
Guarantor or the Agent, at such other address as shall be designated by such
party in a written

                                       46
<PAGE>   51
notice to the other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Company and the
Agent. All such notices and communications shall, when mailed, telecopied,
telegraphed or telexed, be effective when deposited in the mails, telecopied,
delivered to the telegraph company or confirmed by telex answer back,
respectively, except that notices and communications to the Agent pursuant to
Article II, III or VII shall not be effective until received by the Agent.

            SECTION 8.03 No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

            SECTION 8.04 Costs and Expenses.

            (a) The Company agrees to pay on demand all costs and expenses of
the Agent as set forth in the fee letter between the Company and the Agent dated
March 4, 1999. The Company further agrees to pay on demand all reasonable costs
and expenses of the Agent and the Lenders, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other documents to be delivered hereunder, including,
without limitation, reasonable fees and expenses of counsel for the Agent and
each Lender in connection with the enforcement of rights under this Section
8.04(a).

            (b) The Company agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with this Agreement, any promissory
note issued hereunder, any of the transactions contemplated herein or the actual
or proposed use of the proceeds of the Advances, whether or not such
investigation, litigation or proceeding is brought by any Borrower, the
Guarantor, their directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated, except to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.

            (c) To the extent that the Company fails to pay any amount required
to be paid by it to the Agent under paragraph (a) or (b) of this Section 8.04,
each Lender severally agrees to pay to the Agent such Lenders' Applicable
Percentage (determined as of the time that

                                       47
<PAGE>   52
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agent in its capacity as such.

            (d) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or LIBO Rate Advance is made by any Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10
or 2.12, acceleration of the maturity of the Advances pursuant to Section 6.01
or for any other reason, the Company shall, upon demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance.

            (e) Without prejudice to the survival of any other agreement of any
Borrower hereunder, the agreements and obligations of the Company contained in
Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder.

            SECTION 8.05 Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Advances due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of any Loan Party or any Borrower
against any and all of the obligations of such Loan Party or such Borrower now
or hereafter existing under this Agreement, whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Company after any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.

            SECTION 8.06 Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Loan Parties and the Agent and when the Agent
shall have been notified by each Initial Lender that such Initial Lender has
executed it and thereafter shall be binding upon and inure to the benefit of the
Loan Parties, each Subsidiary Borrower (if any), the Agent and each Lender and
their respective

                                       48
<PAGE>   53
successors and assigns, except that no Borrower shall have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lenders.

            SECTION 8.07 Assignments and Participations.

            (a) Each Lender may, upon ten days' notice to the Agent and with the
consent of the Company (which shall not be unreasonably withheld) and, if
demanded by the Company (following a demand by such Lender pursuant to Section
2.11 or Section 2.14 or a suspension of such Lender's obligation to make or
continue Advances as, or convert Advances into, Eurodollar Rate Advances
pursuant to Section 2.12) upon at least ten days' notice to such Lender and the
Agent, will assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and the Revolving Credit Advances owing to it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement (other
than any right to make Competitive Bid Advances or Competitive Bid Advances
owing to it), (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than the lesser of (x)
$25,000,000 and (y) the smallest initial Commitment of any Initial Lender, (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Company pursuant to this Section 8.07(a)
shall be arranged by the Company after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Company pursuant to this
Section 8.07(a) unless and until such Lender shall have received one or more
payments from either the Company or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement and (vi) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined in clause (d) below), an Assignment and Acceptance,
together with a processing and recordation fee of $3,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or

                                       49
<PAGE>   54
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).

            (b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.

            (c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit B hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company.

            (d) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders
and, with respect to Lenders, the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and each Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Loan Parties or any Lender at any reasonable time and from time to time upon
reasonable prior notice.

                                       50
<PAGE>   55
            (e) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Agent and the Company, the option to provide to the Company all or any
part of any Advance that such Granting Lender would otherwise be obligated to
make to the Company pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPC to make any Advance, (ii) if an SPC
elects not to exercise such option or otherwise fails to provide all or any part
of such Advance, the Granting Lender shall be obligated to make such Advance
pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Advance were made by such Granting Lender. Each party hereto agrees that no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 8.07(e), any SPC may (i) with
notice to, but without the prior written consent of, the Company and the Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Advances to the Granting Lender or to any financial
institutions (consented to by the Company and the Agent) providing liquidity
and/or credit support to or for the account of any SPC to support the funding or
maintenance of Advances and (ii) disclose on a confidential basis any non-public
information relating to its Advances to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or liquidity enhancement
to such SPC.

            (f) Each Lender may, upon notice to the Agent and the Company, sell
participations to one or more banks or other entities in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Advances owing to it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any promissory note issued or assigned to it hereunder, (iv) the
Borrowers, the Guarantor, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement, or any consent to any departure by any Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.

                                       51
<PAGE>   56
            (g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to any Loan Party or any Borrower furnished
to such Lender by or on behalf of any Loan Party or any Borrower; provided that,
prior to any such disclosure, the assignee or participant or proposed assignee
or participant shall agree to preserve the confidentiality of any Confidential
Information relating to the Loan Parties or the Borrowers received by it from
such Lender.

            (h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement or any promissory note issued to such Lender
hereunder (including, without limitation, the Advances owing to it) in favor of
any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.

            SECTION 8.08 Confidentiality. Neither the Agent nor any Lender shall
disclose any Confidential Information to any Person without the consent of the
Company, other than (a) to the Agent's or such Lender's Affiliates and their
officers, directors, employees, agents and advisors and to actual or prospective
assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) to any rating
agency when required by it, provided that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Loan Parties or the Borrowers received
by it from such Lender and (d) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.

            SECTION 8.09 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

            SECTION 8.10 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

            SECTION 8.11   Jurisdiction, Etc.

            (a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal

                                       52
<PAGE>   57
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement in the courts
of any jurisdiction.

            (b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York State or federal court sitting in New York City. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

            SECTION 8.12 WAIVER OF JURY TRIAL. EACH BORROWER, THE GUARANTOR, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE
AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.

                                   ARTICLE IX
                                COMPANY GUARANTEE

            SECTION 9.01 Company Guarantee. Subject to the provisions of this
Article IX, the Company unconditionally and irrevocably guarantees to each
Lender and the Agent and their respective successors and assigns, that: (i) the
principal of, premium, if any, and interest on the Advances to each Borrowing
Subsidiary and, following the Substitution Date, the Guarantor (each a
"Guaranteed Party") and any promissory notes issued by any Guaranteed Party
hereunder will be duly and punctually paid in full when due, whether at
maturity, by acceleration, by redemption or otherwise, and interest on overdue
principal, and premium, if any, and (to the extent permitted by law) interest on
any interest, if any, on the Advances and all other obligations of the
Guaranteed Parties to the Lenders or the Agent hereunder (including fees and
expenses) will be promptly paid in full, all in accordance with the terms
hereof; and (ii) in case of any extension of time of payment or renewal of any
of the Advances to any Guaranteed Party or any of such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed, or failing
performance of any other obligation of the Guaranteed Parties to the Lenders or
the Agent, for whatever reason, the Company will be obligated to pay, or to
perform or to cause the performance of, the same immediately. An Event of
Default under this Agreement shall constitute an event of

                                       53
<PAGE>   58
default under this Guarantee, and shall entitle the Lenders to accelerate the
obligations of the Company under this Guarantee in the same manner and to the
same extent as the obligations of the Guaranteed Parties.

      The Company hereby agrees that its obligations under this Guarantee shall
be unconditional, irrespective of the validity, regularity or enforceability of
this Agreement, any Designation Letter or the Substitution Letter, the absence
of any action to enforce the same, any waiver or consent by any Lender or the
Agent of this Agreement any Designation Letter or the Substitution Letter, with
respect to any thereof, the entry of any judgment against any Guaranteed Party,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of the Company. The Company
hereby waives and relinquishes: (a) any right to require the Agent, the Lenders
or any Guaranteed Party (each, a "Benefitted Party") to proceed against any
Guaranteed Party or any other Person or to proceed against or exhaust any
security held by a Benefitted Party at any time or to pursue any other remedy in
any secured party's power before proceeding against the Company; (b) any defense
that may arise by reason of the incapacity, lack of authority, death or
disability of any other Person or Persons or the failure of a Benefitted Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any other Person or Persons; (c) demand, protest and
notice of any kind (except as expressly required by this Agreement), including
but not limited to notice of the existence, creation or incurring of any new or
additional Debt or obligation or of any action or non-action on the part of the
Company, any Benefitted Party, any creditor of the Company or any Guaranteed
Party or on the part of any other Person whomsoever in connection with any
obligations the performance of which are guaranteed under this Guarantee; (d)
any defense based upon an election of remedies by a Benefitted Party, including
but not limited to an election to proceed against the Company or any other
Guaranteed Party for reimbursement; (e) any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal; (f) any defense arising because of a Benefitted Party's election, in
any proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense based on any
borrowing or grant of a security interest under Section 364 of the Bankruptcy
Code. The Company hereby covenants that this Guarantee will not be discharged
except by payment in full of all principal, premium, if any, and interest on the
Advances made to each Guaranteed Party and all other costs provided for under
this Agreement in respect thereof. This is a Guarantee of payment and not of
collectibility.

      If any Lender or the Agent is required by any court or otherwise to return
to either the Company or any Guaranteed Party, or any trustee or similar
official acting in relation to either the Company or any Guaranteed Party, any
amount paid by the Company or any Guaranteed Party to the Agent or such Lender,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. The Company agrees that it will not be entitled to any
right of subrogation in relation to the Lenders or the Agent in respect of any
obligations guaranteed under this Guarantee until payment in full of all
obligations guaranteed hereby. The Company agrees that, as between it, on the
one hand, and the Lenders and the Agent, on the other hand, (x) the

                                       54
<PAGE>   59
maturity of the obligations guaranteed under this Guarantee may be accelerated
as provided in Article VI hereof for the purposes hereof, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article VI hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by such Company for
the purpose of this Guarantee.

                                    ARTICLE X
                              SUBSIDIARY GUARANTEE

            SECTION 10.01 Subsidiary Guarantee. Subject to the provisions of
this Article X, the Guarantor unconditionally and irrevocably guarantees to each
Lender and the Agent and their respective successors and assigns, that: (i) the
principal of, premium, if any, and interest on the Advances and any promissory
note issued hereunder will be duly and punctually paid in full when due, whether
at maturity, by acceleration, by redemption or otherwise, and interest on
overdue principal, and premium, if any, and (to the extent permitted by law)
interest on any interest, if any, on the Advances, any promissory note issued
hereunder and all other obligations of the Company to the Lenders or the Agent
hereunder (including fees and expenses) will be promptly paid in full, all in
accordance with the terms hereof; and (ii) in case of any extension of time of
payment or renewal of any of the Advances or any of such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed, or failing
performance of any other obligation of the Company to the Lenders or the Agent,
for whatever reason, the Guarantor will be obligated to pay, or to perform or to
cause the performance of, the same immediately. An Event of Default under this
Agreement shall constitute an event of default under this Guarantee, and shall
entitle the Lenders to accelerate the obligations of the Guarantor under this
Guarantee in the same manner and to the same extent as the obligations of the
Company.

      The Guarantor hereby agrees that its obligations under this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of this Agreement, the absence of any action to enforce the same,
any waiver or consent by any Lender or the Agent of this Agreement with respect
to any thereof, the entry of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Guarantor. The Guarantor hereby
waives and relinquishes: (a) any right to require the Agent, the Lenders or the
Company (each, a "Benefitted Party") to proceed against the Company or any other
Person or to proceed against or exhaust any security held by a Benefitted Party
at any time or to pursue any other remedy in any secured party's power before
proceeding against the Guarantor; (b) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of any other Person or
Persons or the failure of a Benefitted Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any other
Person or Persons; (c) demand, protest and notice of any kind (except as
ex-

                                       55
<PAGE>   60
pressly required by this Agreement), including but not limited to notice of the
existence, creation or incurring of any new or additional Debt or obligation or
of any action or non-action on the part of the Guarantor, the Company, any
Benefitted Party, any creditor of the Guarantor, the Company or on the part of
any other Person whomsoever in connection with any obligations the performance
of which are guaranteed under this Guarantee; (d) any defense based upon an
election of remedies by a Benefitted Party, including but not limited to an
election to proceed against the Guarantor for reimbursement; (e) any defense
based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome
than that of the principal; (f) any defense arising because of a Benefitted
Party's election, in any proceeding instituted under the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense
based on any borrowing or grant of a security interest under Section 364 of the
Bankruptcy Code. The Guarantor hereby covenants that this Guarantee will not be
discharged except by payment in full of all principal, premium, if any, and
interest on the Advances and all other costs provided for under this Agreement.
This is a Guarantee of payment and not of collectibility.

      If any Lender or the Agent is required by any court or otherwise to return
to either the Company or the Guarantor, or any trustee or similar official
acting in relation to either the Company or the Guarantor, any amount paid by
the Company or the Guarantor to the Agent or such Lender, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect. The
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Lenders or the Agent in respect of any obligations guaranteed
under this Guarantee until payment in full of all obligations guaranteed hereby.
The Guarantor agrees that, as between it, on the one hand, and the Lenders and
the Agent, on the other hand, (x) the maturity of the obligations guaranteed
under this Guarantee may be accelerated as provided in Article VI hereof for the
purposes hereof, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any acceleration of such obligations as provided in
Article VI hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purpose of this
Guarantee.

            SECTION 10.02 Limitation of Guarantor's Liability. The Guarantor,
and by its acceptance hereof, each Lender, hereby confirms that it is the
intention of the parties hereto that this Guarantee not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Code, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or State law. To effectuate the foregoing intention, the Lenders and the
Guarantor hereby irrevocably agree that the obligations of the Guarantor under
this Article X shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of the Guarantor, result in
the obligations of the Guarantor under the Guarantee not constituting a
fraudulent transfer or conveyance under federal or state law.

                                       56
<PAGE>   61
            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.

                                   THE PEPSI BOTTLING GROUP, INC., as Borrower

                                   By    /s/  Christopher Langhoff
                                      -----------------------------------------
                                      Title:   Vice President and Treasurer

                                   BOTTLING GROUP, LLC, as Guarantor

                                   By /s/ John T. Cahill
                                      -----------------------------------------
                                      Title:    Managing Director

                                   THE CHASE MANHATTAN BANK, as Agent

                                   By    /s/  Randolph E. Cates
                                      -----------------------------------------
                                      Title:    Vice President
<PAGE>   62
<TABLE>
<CAPTION>
Commitment                                      Initial Lenders
----------                                      ---------------
<S>                                             <C>
-$30,000,000                                    CITIBANK, N.A.

                                                By    /s/  Laura A. Siracuse
                                                  -----------------------------
                                                  Title: Vice President

-$30,000,000                                    THE CHASE MANHATTAN BANK

                                                By    /s/  Karen M. Sharf
                                                  -----------------------------
                                                  Title: Vice President

$30,000,000                                     BANK OF AMERICA, N.A.

                                                By     /s/ Lisa Choi
                                                  -----------------------------
                                                  Title: Vice President

$25,000,000                                     CREDIT SUISSE FIRST BOSTON

                                                By    /s/ David Kratovil
                                                  -----------------------------
                                                  Title: Director

                                                By    /s/ James P. Moran
                                                  -----------------------------
                                                  Title: Vice President

</TABLE>
<PAGE>   63
<TABLE>
<S>                                             <C>
$25,000,000                                     UBS AG STAMFORD BRANCH

                                                By    /s/ Paula Mueller
                                                  -----------------------------
                                                  Title: Director

$20,000,000                                     LEHMAN COMMERCIAL PAPER INC.

                                                By    /s/ Jeffrey Goodwin
                                                  -----------------------------
                                                  Title: Authorized Signatory

$20,000,000                                     THE NORTHERN TRUST COMPANY

                                                By    /s/ Eric Strickland
                                                  -----------------------------
                                                  Title: Vice President

$17,500,000                                     DEUTSCHE BANK AG, NEW YORK
                                                BRANCH AND/OR CAYMAN ISLANDS
                                                BRANCH

                                                By    /s/ Alexander Karow
                                                  -----------------------------
                                                  Title: Vice President

                                                By    /s/ Christoph A. Koch
                                                  -----------------------------
                                                  Title: Vice President
</TABLE>
<PAGE>   64
<TABLE>
<S>                                             <C>
$15,000,000                                     ROYAL BANK OF CANADA

                                                By    /s/ Gordon C. MacArthur
                                                  -----------------------------
                                                  Title: Senior Manager

$12,500,000                                     BANCO BILBAO VIZCAYA

                                                By    /s/ Alberto Conde
                                                  -----------------------------
                                                  Title: Vice President
                                                         Corporate Banking

                                                By    /s/ Alejandro Lorca
                                                  -----------------------------
                                                  Title: Vice President
                                                         Corporate Banking

$12,500,000                                     FLEET NATIONAL BANK

                                                By   /s/ Jorge A. Schwarz
                                                  -----------------------------
                                                  Title: Director

-$12,500,000                                    THE BANK OF NEW YORK

                                                By    /s/ Eliza S. Adams
                                                  -----------------------------
                                                  Title: Vice President

$250,000,000 Total of the Commitments

</TABLE>
<PAGE>   65
                                   SCHEDULE I

                                LENDING OFFICES

<TABLE>
<CAPTION>
Lender                  Domestic Lending Office        Eurodollar Lending Office
------                  -----------------------        -------------------------
<S>                     <C>                            <C>
CITIBANK, N.A.          399 Park Avenue                399 Park Avenue
                        New York, New York 10043       New York,  New York 10043

THE CHASE MANHATTAN     270 Park Avenue                270 Park Avenue
  BANK                  New York, New York 10017       New York,  New York 10017

BANK OF AMERICA, N.A.   One Independence Center        One Independence Center
                        101 N. Tryon Street            101 N. Tryon Street
                        Charlotte, NC 28255-0001       Charlotte, NC 28255-0001

CREDIT SUISSE  FIRST    11 Madison Avenue              Credit Suisse First Boston
BOSTON                  New York, New York, 10010      Cayman Islands Branch
                                                       c/-11 Madison Avenue
                                                       New York, New York 10010

UBS AG                  677 Washington Blvd.           677 Washington Blvd
                        Stamford, CT 06912             Stamford, CT 06912

LEHMAN COMMERCIAL       c/- Bankers Trust Company      c/- Bankers Trust Company
PAPER INC.              130 Liberty Street             130 Liberty Street
                        9th Floor                      9th Floor
                        New York, New York 10006       New York, New York 10006

                        cc Lehman Commercial           cc Lehman Commercial Paper
                        Paper Inc.                     Inc.
                        101 Hudson Street              101 Hudson Street
                        30th Floor                     30th Floor
                        Jersey City, New Jersey        Jersey City, New Jersey
                        07302                          07302

THE NORTHERN TRUST      50 South La Salle Street,      50 South La Salle Street,
COMPANY                 Chicago, Ill. 60675            Chicago, Ill. 60675

DEUTSCHE BANK AG        31 West 52nd Street            Cayman Islands Branch
NEW YORK BRANCH         New York, New York 10019       c/-31 West 52nd Street
AND/OR CAYMAN                                          New York, New York 10019
ISLANDS BRANCH

ROYAL BANK OF CANADA    One Liberty Plaza              One Liberty Plaza
                        New York, New York             New York, New York
                        10006-1404                     10006-1404

BANCO BILBAO VIZCAYA    1345 Avenue of the             1345 Avenue of the Americas
                        Americas                       New York, New York 10105
                        New York, New York 10105

FLEET NATIONAL BANK     One Landmark Sq.               One Landmark Sq.
                        Stamford, CT 06904             Stamford, CT 06904

THE BANK OF NEW YORK    One Wall Street,               One Wall Street,
                        New York, New York 10286       New York, New York 10286

</TABLE>

                                      -2-
<PAGE>   66
                                   SCHEDULE 2

                                APPLICABLE MARGIN

<TABLE>
<CAPTION>
                        364-Day               364-Day            364-Day
      Rating          Facility Fee          LIBOR Margin        Drawn Cost
      ------          ------------          ------------        ----------

<S>                   <C>                   <C>                 <C>
A/A2                       6.0 bps             29.0 bps          35.0 bps

A-/A3                      7.0 bps             33.0 bps          40.0 bps

BBB+/Baa1                 10.0 bps             40.0 bps          50.0 bps

BBB/Baa2                  15.0 bps             47.5 bps          62.5 bps

(less than or
equal to) BBB-/Baa3       20.0 bps             55.0 bps          75.0 bps
</TABLE>

                                      -3-

<PAGE>   67
                                                 EXHIBIT A-1 - FORM OF NOTICE OF
                                                      REVOLVING CREDIT BORROWING

The Chase Manhattan Bank, as Agent
    for the Lenders parties
    to the 364-Day Credit Agreement
    referred to below
270 Park Avenue
New York, New York 10017                                               [Date]

                  Attention:  Nina Wang

Ladies and Gentlemen:

                  The undersigned, The Pepsi Bottling Group, Inc. (the
"Company"), refers to the 364-Day Credit Agreement, dated as of May 3, 2000
(as amended or modified from time to time, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
Bottling Group, LLC (the "Guarantor"), certain Lenders parties thereto and The
Chase Manhattan Bank, as administrative agent for said Lenders, and hereby gives
you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that
the undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
required by Section 2.02(1) of the Credit Agreement:

         (i)      The Business Day of the Proposed Revolving Credit Borrowing is
                  __________, ____.

         (ii)     The Type of Advances comprising the Proposed Revolving Credit
                  Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

         (iii)    The aggregate amount of the Proposed Revolving Credit
                  Borrowing is $______.

         (iv)     The identity of the Borrower is __________, a ____________
                  corporation.

         [(v)]    [The initial Interest Period for each Eurodollar Rate Advance
                  made as part of the Proposed Revolving Credit Borrowing is ___
                  month[s].]

                  The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Revolving Credit Borrowing:

                                     A-1-1
<PAGE>   68
         (A) the representations and warranties contained in Section 4.01 of the
Credit Agreement (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f) thereof (other than clause (ii)
thereof)) are correct in all material respects, on and as of the date of the
Proposed Revolving Credit Borrowing, before and after giving effect to the
Proposed Revolving Credit Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and

         (B) no event has occurred and is continuing, or would result from such
Proposed Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.

                                                  Very truly yours,

                                                  THE PEPSI BOTTLING GROUP, INC.

                                                  By:
                                                     --------------------------
                                                       Name:
                                                       Title:

                                     A-1-2
<PAGE>   69
                                                    EXHIBIT A-2 - FORM OF NOTICE
                                                                  OF COMPETITIVE
                                                                   BID BORROWING

The Chase Manhattan Bank, as Agent
    for the Lenders parties
    to the 364-Day Credit Agreement
    referred to below
270 Park Avenue
New York, New York 10017                                               [Date]

                  Attention: Nina Wang

Ladies and Gentlemen:

                  The undersigned, The Pepsi Bottling Group, Inc. (the
"Company"), refers to the 364-Day Credit Agreement, dated as of May 3, 2000
(as amended or modified from time to time, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
Bottling Group, LLC (the "Guarantor"), certain Lenders parties thereto and The
Chase Manhattan Bank, as administrative agent for said Lenders, and hereby gives
you notice pursuant to Section 2.03 of the Credit Agreement that the undersigned
hereby requests a Competitive Bid Borrowing under the Credit Agreement, and in
that connection sets forth the terms on which such Competitive Bid Borrowing
(the "Proposed Competitive Bid Borrowing") is requested to be made:

                  (A)      Date of Proposed
                           Competitive Bid Borrowing         ___________________
                  (B)      Aggregate Amount of Proposed
                           Competitive Bid Borrowing         ___________________
                  (C)      Maturity Date                     ___________________
                  (D)      Interest Rate Basis               ___________________
                  (E)      Interest Payment Date(s)          ___________________
                  (F)      Identity of Borrower              ___________________

                  The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:

                  (a) the representations and warranties contained in Section
         4.01 (except the representations set forth in the last sentence of
         subsection (e) thereof and in subsection (f) thereof (other than clause
         (ii) thereof)) are correct in all material respects, on and as of the

                                     A-2-1
<PAGE>   70
         date of the Proposed Competitive Bid Borrowing, before and after giving
         effect to the Proposed Competitive Bid Borrowing and to the application
         of the proceeds therefrom, as though made on and as of such date; and

                  (b) no event has occurred and is continuing, or would result
         from the Proposed Competitive Bid Borrowing or from the application of
         the proceeds therefrom, that constitutes a Default.

                           The undersigned hereby confirms that the Proposed
         Competitive Bid Borrowing is to be made available to it in accordance
         with Section 2.03(2) of the Credit Agreement.

                                                  Very truly yours,

                                                  THE PEPSI BOTTLING GROUP, INC.

                                                   By
                                                       Name:
                                                       Title:

                                     A-2-2
<PAGE>   71
                                                           EXHIBIT A-3 - FORM OF
                                                             EXTENSION AGREEMENT

                               EXTENSION AGREEMENT

The Pepsi Bottling Group, Inc.
One Pepsi Way
Somers, New York 10589
Attention: Treasurer

The Chase Manhattan Bank, as Agent
  under the 364-Day Credit Agreement referred to below
270 Park Avenue
New York, New York 10017
Attention: Nina Wang                                      [Date]

Ladies and Gentlemen:

                  Each undersigned Lender hereby agrees to extend, effective on
[insert effective date, which shall be no more than 29 days prior to the
existing Termination Date] (the "Extension Date"), the Termination Date under
the 364-Day Credit Agreement dated as of May 3, 2000 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") among The Pepsi Bottling Group, Inc., Bottling Group, LLC, the
Lenders and agents party thereto and The Chase Manhattan Bank, as administrative
agent for the Lenders, to [364 days from the effective date of this Extension
Agreement]. Terms defined in the Credit Agreement are used herein as therein
defined.

                  This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

                [Remainder of this page intentionally left blank]

                                     A-3-1
<PAGE>   72
                                                             EXHIBIT B - FORM OF
                                                       ASSIGNMENT AND ACCEPTANCE

                  Reference is made to the 364-Day Credit Agreement dated as of
May 3, 2000 (as amended or modified from time to time, the "Credit Agreement"),
among THE PEPSI BOTTLING GROUP, INC., a Delaware corporation (the "Company"),
Bottling Group, LLC (the "Guarantor"), the Lenders (as defined in the Credit
Agreement) and The Chase Manhattan Bank, as administrative agent for the Lenders
(the "Agent"). Terms defined in the Credit Agreement are used herein with the
same meaning.

                  The "Assignor" and the "Assignee" referred to on Schedule 1
hereto agree as follows:

                  1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement as of the
date hereof (other than in respect of Competitive Bid Advances) equal to the
percentage interest specified on Schedule 1 hereto of all outstanding rights and
obligations under the Credit Agreement (other than in respect of Competitive Bid
Advances). After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Revolving Credit Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.

                  2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or observance by the
Company of any of its obligations or the obligations of any Borrower under the
Credit Agreement or any other instrument or document furnished pursuant thereto.

                  3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement as are
delegated to

                                       B-1
<PAGE>   73
the Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.14 of the Credit
Agreement.

                  4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.

                  5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

                  6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and facility fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.

                  7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the law of the State of New York.

                  8. This Assignment and Acceptance may be executed in any
number of counterparts and by different 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. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.

                  IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.

                                      B-2
<PAGE>   74
                                   Schedule 1
                                       to
                            Assignment and Acceptance

Percentage interest assigned:                                           ___%

Assignee's Commitment:                                           $__________

Aggregate outstanding principal
amount of Revolving Credit Advances assigned:                    $__________

Effective Date(1):                                     _______________, ____

                         [NAME OF ASSIGNOR], as Assignor

                                                 By
                                                 Title:

                                                 Dated:                        ,

                         [NAME OF ASSIGNEE], as Assignee

                                                 By
                                                 Title:

                                                 Dated:                        ,

                                                 Domestic Lending Office:
                                                          [Address]

                                                 Eurodollar Lending Office:
                                                          [Address]

-------------------
(1)      This date should be no earlier than five Business Days after the
         delivery of this Assignment and Acceptance to the Agent.

<PAGE>   75
Accepted and Approved this
____ day of ________, ____

THE CHASE MANHATTAN BANK, as Agent

By   ___________________________________
     Name:
     Title:

Approved this ____ day
of ________, ____

THE PEPSI BOTTLING GROUP, INC.

By   ___________________________________
     Name:
     Title:

                                       2
<PAGE>   76
                                                             EXHIBIT C - FORM OF
                                                              OPINION OF COUNSEL
                                                                 FOR THE COMPANY
                                                               AND THE GUARANTOR

                                                                [Effective Date]

To each of the Lenders parties
to the 364-Day Credit Agreement dated
as of May   , 2000
among The Pepsi Bottling Group, Inc.,
said Lenders and The Chase Manhattan Bank,
as Agent for said Lenders, and
to The Chase Manhattan Bank, as Agent

                         The Pepsi Bottling Group, Inc.

Ladies and Gentlemen:

                  This opinion is furnished to you pursuant to Section
3.01(g)(v) of the 364-Day Credit Agreement, dated as of May 3, 2000 (the
"Credit Agreement"), among The Pepsi Bottling Group, Inc. (the "Company"),
Bottling Group, LLC, (the "Guarantor"), the Lenders parties thereto and The
Chase Manhattan Bank, as Agent for said Lenders, providing for extensions of
credit to be made by said Lenders to the Company in an aggregate principal
amount at any one time outstanding of up to $250,000,000. Terms defined in the
Credit Agreement are used herein as therein defined.

                  I am the General Counsel of the Company and have acted as
counsel to the Company and the Guarantor in connection with the Credit
Agreement. In connection with this opinion, I have examined:

                  (1) The Credit Agreement.

                  (2) The documents furnished by the Company and the Guarantor
         pursuant to subsections 3.01(g)(i)-(iv) of the Credit Agreement.

                  (3) The Articles of Incorporation of the Company and all
         amendments thereto (the "Charter").

                                      C-1
<PAGE>   77
                  (4) The by-laws of the Company and all amendments thereto (the
         "By-laws").

                  (5) A certificate of the Secretary of State of Delaware, dated
         _______________, 1999, attesting to the continued corporate existence
         and good standing of the Company in that State.

                  (6) The Amended and Restated Limited Liability Company
         Agreement of the Guarantor, dated as of March 30, 1999, and all
         amendments thereto (the "LLC Agreement").

                  (7) The Certificate of Formation of the Guarantor and all
         amendments thereto (the "Certificate of Formation").

                  (8) A certificate of the Secretary of State of Delaware dated
         _________, 2000, attesting to the continued existence and good standing
         of the Guarantor in that State.

                  (9) Resolutions of the Board of Directors of the Company
         adopted on        , 2000.

                  (10) Resolutions of the Managing Directors of the Guarantor
         adopted on       , 2000.

                  In addition, I have examined the originals, or copies
certified or otherwise identified to my satisfaction, of such other corporate
records of the Company and the Guarantor, certificates of public officials and
of officers of the Company and the Guarantor, and agreements, instruments and
other documents, as I have deemed necessary as a basis for the opinions
expressed below. I have assumed the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by the Initial Lenders and the Agent.

                  The opinions expressed below are limited to the law of the
State of New York, the Delaware corporate law, the Federal law of the United
States and, with respect to paragraphs 1 and 2 and clauses (i), (ii) and
(iii)(a) of paragraph 3 only, the Delaware General Corporation Law and the
Delaware Limited Liability Company Act.

                  Based upon the foregoing and upon such investigation as I have
deemed necessary and subject to the qualifications set forth herein, I am of the
following opinion:

                  1. The Company is a corporation validly existing and in good
         standing under the laws of the State of Delaware.

                  2. The Guarantor is a limited liability company validly
         existing and in good standing under the laws of the state of Delaware.

                                      C-2
<PAGE>   78
                  3. The execution, delivery and performance by the Company and
         the Guarantor of the Credit Agreement (i) are within the Company's
         corporate, and the Guarantor's limited liability company, powers, (ii)
         have been duly authorized by all necessary corporate, or limited
         liability company, action, and (iii) do not contravene (a) the Charter
         or the Bylaws of the Company or the LLC Agreement or Certificate of
         Formation of the Guarantor or (b) to the best of my knowledge (1) any
         United States Federal or New York State law, rule or regulation
         applicable to the Company or the Guarantor (including, without
         limitation, Regulation X of the Board of Governors of the Federal
         Reserve System) or (2) any contractual or legal restriction contained
         in any material judgment, decree, mortgage, agreement, indenture or
         other instrument to which the Company or the Guarantor is a party. The
         Credit Agreement has been duly executed and delivered on behalf of the
         Company and the Guarantor.

                  4. No authorization, approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         of the State of New York or the Federal government of the United States
         is required for the due execution, delivery and performance by the
         Company or the Guarantor of the Credit Agreement.

                  5. The Credit Agreement is a valid and binding obligation of
         the Company and the Guarantor enforceable against the Company and the
         Guarantor in accordance with its terms.

                  6. To the best of my knowledge and except as disclosed in the
         Company's consolidated financial statements, there are no pending or
         overtly threatened actions or proceedings against the Company or any of
         its Subsidiaries, before any court, governmental agency or arbitrator
         that purport to affect the legality, validity, binding effect or
         enforceability of the Credit Agreement or that are likely to have a
         materially adverse effect upon the financial condition or operations of
         the Company or any of its Subsidiaries.

The opinions set forth above are subject to the following qualifications:

                  (1) My opinion in paragraph 5 above is subject to the effect
         of any applicable bankruptcy, insolvency, reorganization, moratorium or
         similar law affecting creditors' rights generally.

                  (2) My opinion in paragraph 5 above is subject to the effect
         of general principles of equity, including, without limitation,
         concepts of materiality, reasonableness, good faith and fair dealing
         (regardless of whether considered in a proceeding in equity or at law).

                  (3) I express no opinion as to the effect (if any) of the law
         of any jurisdiction (other than the State of New York) wherein any
         Lender may be located or wherein en-

                                      C-3
<PAGE>   79
         forcement of the Credit Agreement may be sought that limits the rates
         of interest that such Lender may charge or collect.

                  (4) I express no opinion as to the effect of Section 548 of
         the United States Bankruptcy Code or any similar provision of State
         law.

                  In all respects and for all purposes, this opinion is given
solely for the benefit of the Agent and the Lenders and may not be relied upon
by any other person or entity without my prior written consent.

                                    Very truly yours,

                                      C-4
<PAGE>   80
                                                                       EXHIBIT D

                           FORM OF DESIGNATION LETTER

                                               ------------, ----

To The Chase Manhattan Bank
  as Agent

Attention: Nina Wang

Ladies and Gentlemen:

                  We make reference to the 364-Day Credit Agreement (as amended,
supplemented and otherwise modified and in effect from time to time, the "Credit
Agreement") dated as of May 3, 2000 among The Pepsi Bottling Group, Inc. (the
"Company"), Bottling Group, LLC (the "Guarantor"), The Chase Manhattan Bank, as
administrative agent (the "Agent"), and the banks party thereto (the "Initial
Lenders"). Terms defined in the Credit Agreement are used herein as defined
therein.

                  The Company hereby designates [______________] (the "Borrowing
Subsidiary"), a Subsidiary of the Company and a corporation duly incorporated
under the laws of [_______________] as a Borrower in accordance with Section
2.17 of the Credit Agreement until such designation is terminated in accordance
with said Section 2.17.

                  The Borrowing Subsidiary hereby accepts the above designation
and hereby expressly and unconditionally accepts the obligations of a Borrower
under the Credit Agreement, adheres to the Credit Agreement and agrees and
confirms that, upon your execution and return to the Company of the enclosed
copy of this letter, such Borrowing Subsidiary shall be a Borrower for purposes
of the Credit Agreement and agrees to be bound by and perform and comply with
the terms and provisions of the Credit Agreement applicable to it as if it had
originally executed the Credit Agreement as a Borrower. The Borrowing Subsidiary
hereby authorizes and empowers the Company to act as its representative and
attorney-in-fact for the purposes of signing documents and giving and receiving
notices (including notices of Borrowing under the Credit Agreement) and other
communications in connection with the Credit Agreement and the transactions
contemplated thereby and for the purposes of modifying or amending any provision
of the Credit Agreement and further agrees that the Agent and each Lender may
conclusively rely on the foregoing authorization.

                                      D-1
<PAGE>   81
                  The Borrowing Subsidiary represents and warrants that each of
the representations and warranties set forth in Section 4.01 (a) (as if the
reference therein to Delaware were a reference to its jurisdiction of
organization), (b), (c) and (d) of the Credit Agreement are true as if each
reference therein to the Company were a reference to the Borrowing Subsidiary
and as if each reference therein to the Loan Documents were a reference to this
Designation Letter.

                  The Borrowing Subsidiary hereby agrees that this Designation
Letter and the Credit Agreement shall be governed by, and construed in
accordance with, the law of the State of New York. The Borrowing Subsidiary
hereby submits to the nonexclusive jurisdiction of any New York state court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Designation Letter, the Credit Agreement or for recognition or
enforcement of any judgment. The Borrowing Subsidiary irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. The Borrowing Subsidiary further agrees that service
of process in any such action or proceeding brought in New York may be made upon
it by service upon the Borrower at the "Address for Notices" specified below its
name on the signature pages to the Credit Agreement.

                  Without limiting the foregoing, the Borrowing Subsidiary joins
in the submission, agreements, waivers and consents in Section 8.11 and 8.12 of
the Credit Agreement.

                                 THE PEPSI BOTTLING GROUP, INC.

                                 By ___________________________________
                                    Name:
                                    Title:

                                 [NAME OF BORROWING SUBSIDIARY]

                                 By ___________________________________
                                    Name:
                                    Title:

                                      D-2
<PAGE>   82
ACCEPTED

THE CHASE MANHATTAN BANK,
  as Agent

By ___________________________________
   Name:
   Title:

                                      D-3
<PAGE>   83
                                                                       EXHIBIT E

                           FORM OF SUBSTITUTION LETTER

                                               ------------, ----

To The Chase Manhattan Bank
  as Agent

Attention: Nina Wang

Ladies and Gentlemen:

                  We make reference to the 364-Day Credit Agreement (as amended,
supplemented and otherwise modified and in effect from time to time, the "Credit
Agreement") dated as of May 3, 2000 among The Pepsi Bottling Group, Inc. (the
"Company"), Bottling Group, LLC (the "Guarantor"), The Chase Manhattan Bank, as
administrative agent (the "Agent"), and the banks party thereto (the "Initial
Lenders"). Terms defined in the Credit Agreement are used herein as defined
therein.

                  The Company hereby elects to terminate its rights as a
Borrower under the Credit Agreement and designates the Guarantor as the
exclusive Borrower thereunder, in accordance with Section 2.17 of the Credit
Agreement.

                  The Guarantor hereby accepts the above substitution and hereby
expressly and unconditionally accepts the obligations of the Company under the
Credit Agreement, adheres to the Credit Agreement and agrees and confirms that,
as of the date hereof, the Guarantor shall become a Borrower for purposes of the
Credit Agreement and agrees to be bound by and perform and comply with the terms
and provisions of the Credit Agreement applicable to it as if it had originally
executed the Credit Agreement as the Company.

                  The Company and the Guarantor hereby represent and warrant to
the Agent and each Lender that, before and after giving effect to this
Substitution Letter, (i) the representations and warranties set forth in Section
4.01 of the Credit Agreement (except the representations set forth in the last
sentence of subsection (e) thereof and in subsection (f) thereof (other than
clause (ii) thereof)) are true and correct in all material respects on the date
hereof and after giving effect to the substitution contemplated hereby as if
made on and as of the date hereof and (ii) no Default has occurred and is
continuing.

                                      E-1
<PAGE>   84
                  The Company and the Guarantor hereby agree that this
Substitution Letter shall be governed by, and construed in accordance with, the
law of the State of New York. The Company and the Guarantor hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Substitution Letter or the transactions contemplated hereby.

                                        THE PEPSI BOTTLING GROUP, INC.

                                        By
                                           ---------------------------
                                           Name:
                                           Title:

                                        BOTTLING GROUP, LLC

                                        By
                                           ---------------------------
                                           Name:
                                           Title:

                                      E-2
<PAGE>   85
                                                                       EXHIBIT F

                           FORM OF TERMINATION LETTER

____________, ____

To The Chase Manhattan Bank,
  as Agent

Attention: Nina Wang

Ladies and Gentlemen:

                  We make reference to the 364-Day Credit Agreement (as amended,
supplemented and otherwise modified and in effect from time to time, the "Credit
Agreement") dated as of May 3, 2000 by and among The Pepsi Bottling Group,
Inc. (the "Company"), Bottling Group, LLC (the "Guarantor"), The Chase Manhattan
Bank, as administrative agent, and the banks party thereto. Terms defined in the
Credit Agreement are used herein as defined therein.

                  The Company hereby terminates the status as a Borrowing
Subsidiary of [_______________], a corporation incorporated under the laws of
[_______________], in accordance with Section 2.17 of the Credit Agreement,
effective as of the date of receipt of this notice by the Agent. The undersigned
hereby represents and warrants that all principal of and interest on any Advance
of the above-referenced Borrowing Subsidiary and all other amounts payable by
such Borrowing Subsidiary pursuant to the Credit Agreement have been paid in
full on or prior to the date hereof. Notwithstanding the foregoing, this
Termination Letter shall not affect any obligation which by the terms of the
Credit Agreement survives termination thereof

                                   THE PEPSI BOTTLING GROUP, INC.

                                   By ___________________________________
                                      Name:
                                      Title:

                                      F-1<PAGE>   1
                                                                   EXHIBIT 10.12

================================================================================

                                      PBG
                                EXECUTIVE INCOME
                                DEFERRAL PROGRAM

                                  As Effective
                                October 11, 2000

================================================================================
<PAGE>   2

                                       PBG
                        EXECUTIVE INCOME DEFERRAL PROGRAM

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                         <C>
ARTICLE I:  INTRODUCTION.....................................................................1

ARTICLE II:  DEFINITIONS.....................................................................2

        2.1  Account.........................................................................2
        2.2  Base Compensation...............................................................2
        2.3  Beneficiary.....................................................................2
        2.4  Bonus Compensation..............................................................3
        2.5  Code............................................................................3
        2.6  Company.........................................................................3
        2.7  Deferral Subaccount.............................................................3
        2.8  Disability......................................................................3
        2.9  Distribution Date...............................................................3
        2.10  Election Form..................................................................3
        2.11  Employer.......................................................................3
        2.12  ERISA..........................................................................4
        2.13  Executive......................................................................4
        2.14  Fair Market Value..............................................................4
        2.15  Misconduct.....................................................................4
        2.16  Participant....................................................................4
        2.17  PBG............................................................................4
        2.18  Performance Unit Payout........................................................5
        2.19  Plan...........................................................................5
        2.20  Plan Administrator.............................................................5
        2.21  Plan Year......................................................................5
        2.22  Prior Plan.....................................................................5
        2.23  Retirement.....................................................................5
        2.24  Risk of Forfeiture Subaccount..................................................5
        2.25  Start Date.....................................................................5
        2.26  Stock Option Gains.............................................................5
        2.27  Termination of Employment......................................................6
        2.28  Valuation Date.................................................................6

ARTICLE III:  PARTICIPATION..................................................................7

        3.1  Eligibility to Participate......................................................7
        3.2  Deferral Election...............................................................8
</TABLE>

                                      -i-
<PAGE>   3

<TABLE>
<S>                                                                                        <C>
        3.3  Time and Manner of Deferral Election............................................8
        3.4  Period of Deferral.............................................................10

ARTICLE IV:  INTERESTS OF PARTICIPANTS......................................................12

        4.1  Accounting for Participants' Interests.........................................12
        4.2  Vesting of a Participant's Account.............................................16
        4.3  Risk of Forfeiture Subaccounts.................................................17
        4.4  Distribution of a Participant's Account........................................19
        4.5  Acceleration of Payment in Certain Cases.......................................22
        4.6  Conversion of Deferral Subaccounts by Certain Participants.....................23

ARTICLE V:  PLAN ADMINISTRATOR..............................................................25

        5.1  Plan Administrator.............................................................25
        5.2  Action.........................................................................25
        5.3  Powers of the Plan Administrator...............................................25
        5.4  Compensation, Indemnity and Liability..........................................26
        5.5  Taxes..........................................................................26

ARTICLE VI:  CLAIMS PROCEDURE...............................................................28

        6.1  Claims for Benefits............................................................28
        6.2  Appeals........................................................................28

ARTICLE VII:  AMENDMENT AND TERMINATION.....................................................29

        7.1  Amendments.....................................................................29
        7.2  Termination of Plan............................................................29

ARTICLE VIII:  MISCELLANEOUS................................................................30

        8.1  Limitation on Participant's Rights.............................................30
        8.2  Unfunded Obligation of Individual Employer.....................................30
        8.3  Other Plans....................................................................30
        8.4  Receipt or Release.............................................................30
        8.5  Governing Law..................................................................30
        8.6  Adoption of Plan by Related Employers..........................................31
        8.7  Gender, Tense and Examples.....................................................31
        8.8  Successors and Assigns; Nonalienation of Benefits..............................31
        8.9  Facility of Payment............................................................31
        8.10  Separate Plans................................................................32

APPENDIX

        ARTICLE A  INITIAL PUBLIC OFFERING OF PBG...........................................35
        ARTICLE B  SUPPLEMENTAL EXECUTIVE INCENTIVE COMPENSATION AWARDS.....................39
</TABLE>

                                      -ii-
<PAGE>   4

                                   ARTICLE I

                                  INTRODUCTION

        The Pepsi Bottling Group, Inc. (the "Company") established the PBG
Executive Income Deferral Program (the "Plan") to permit eligible executives to
defer base pay, certain cash and stock awards made under its executive
compensation programs, and certain gains on stock options. The Plan is a
successor to the PepsiCo Executive Income Deferral Program and was originally
adopted effective as of April 7, 1999. Thereafter, the Plan was amended and
restated in its entirety effective as of October 11, 2000 (subject to other
specific effective dates set forth in this restatement).

        This document sets forth the terms of the Plan, specifying the group of
executives of the Company and certain affiliated employers that are eligible to
make deferrals, the procedures for electing to defer compensation and the Plan's
provisions for maintaining and paying out amounts that have been deferred.
Additional provisions applicable to certain executives are set forth in the
Articles A and B of the Appendix, which modifies and supplements the general
provisions of the Plan.

        The Plan is unfunded and unsecured, except as provided in Article B of
the Appendix. Amounts deferred by an executive are an obligation of that
executive's individual employer. With respect to his or her employer, the
executive has the rights of a general creditor.

                                       1
<PAGE>   5

                                   ARTICLE II

                                   DEFINITIONS

        When used in this Plan, the following underlined terms shall have the
meanings set forth below unless a different meaning is plainly required by the
context:

                2.1 Account: The account maintained for a Participant on the
books of his or her Employer to determine, from time to time, the Participant's
interest under this Plan. The balance in such Account shall be determined by the
Plan Administrator. Each Participant's Account shall consist of at least one
Deferral Subaccount for each separate deferral under Section 3.2. In accordance
with Section 4.3, some or all of a separate deferral may be held in a Risk of
Forfeiture Subaccount. The Plan Administrator may also establish such additional
Deferral Subaccounts as it deems necessary for the proper administration of the
Plan. The Plan Administrator may also combine Deferral Subaccounts to the extent
it deems separate accounts are not needed for sound recordkeeping. Where
appropriate, a reference to a Participant's Account shall include a reference to
each applicable Deferral Subaccount that has been established thereunder.

                2.2 Base Compensation: An eligible Executive's adjusted base
salary, as determined by the Plan Administrator and to the extent paid in U.S.
dollars from an Employer's U.S. payroll. For any applicable payroll period, an
eligible Executive's adjusted base salary shall be determined after reductions
for applicable tax withholdings, Executive authorized deductions (including
deductions for the PBG 401(k) Plan, Benefits Plus and charitable donations), tax
levies, garnishments and such other amounts as the Plan Administrator recognizes
as reducing the amount of base salary available for deferral.

                2.3 Beneficiary: The person or persons (including a trust or
trusts) properly designated by a Participant, as determined by the Plan
Administrator, to receive the amounts in one or more of the Participant's
Deferral Subaccounts in the event of the Participant's death. To be effective,
any Beneficiary designation must be in writing, signed by the Participant, and
filed with the Plan Administrator prior to the Participant's death, and it must
meet such other standards (including any requirement for spousal consent) as the
Plan Administrator shall require from time to time. If no designation is in
effect at the time of a Participant's death or if all designated Beneficiaries
have predeceased the Participant, then the Participant's Beneficiary shall be
his or her estate. A Beneficiary designation of an individual by name (or name
and relationship) remains in effect regardless of any change in the designated
individual's relationship to the Participant. A Beneficiary designation solely
by relationship (for example, a designation of "spouse," that does not give the
name of the spouse) shall designate whoever is the person in that relationship
to the Participant at his or her death. An individual who is otherwise a
Beneficiary with respect to a Participant's Account ceases to be a Beneficiary
when all payments have been made from the Account.

                                       2
<PAGE>   6

                2.4 Bonus Compensation: An eligible Executive's adjusted annual
incentive award under his or her Employer's annual incentive plan or the PBG
Executive Incentive Compensation Plan, as determined and adjusted by the Plan
Administrator and to the extent paid in U.S. dollars from an Employer's U.S.
payroll. An eligible Executive's annual incentive awards shall be adjusted to
reduce them for applicable tax withholdings, Executive authorized deductions
(including deductions for the PBG 401(k) Plan, Benefits Plus and charitable
donations), tax levies, garnishments and such other amounts as the Plan
Administrator recognizes as reducing the amount of such awards available for
deferral.

                2.5 Code: The Internal Revenue Code of 1986, as amended from
time to time.

                2.6 Company: The Pepsi Bottling Group, Inc., a corporation
organized and existing under the laws of the State of Delaware, or its successor
or successors.

                2.7 Deferral Subaccount: A subaccount of a Participant's Account
maintained to reflect his or her interest in the Plan attributable to each
deferral (or separately tracked portion of a deferral) of Base Compensation,
Bonus Compensation, Performance Unit Payout and Stock Option Gains,
respectively, and earnings or losses credited to such subaccount in accordance
with Section 4.1(b).

                2.8 Disability: A Participant who is entitled to receive
benefits under the PBG Long Term Disability Plan shall be deemed to suffer from
a disability. Participants who are not covered by the PBG Long Term Disability
Plan shall be deemed to suffer from a disability if, in the judgment of the Plan
Administrator, they satisfy the standards for disability under the PBG Long Term
Disability Plan (determined using such plan's administrative procedures, as
selected by the Plan Administrator).

                2.9 Distribution Date: Distribution Date shall have the same
meaning as Valuation Date; provided, however, if the Valuation Date is more
frequent than once per month, the Distribution Date shall mean the first day of
each month.

                2.10 Election Form: The form prescribed by the Plan
Administrator on which a Participant specifies the amount of his or her Base
Compensation, Bonus Compensation, Performance Unit Payout or Stock Option Gains
to be deferred pursuant to the provisions of Article III. An Election Form need
not exist in a paper format, and it is expressly contemplated that the Plan
Administrator may adopt such technologies, including voice response systems and
electronic forms, as it deems appropriate from time to time.

                2.11 Employer: Each division of the Company and each of the
Company's subsidiaries and affiliates (if any) that is currently designated as
an Employer by the Plan Administrator.

                                       3
<PAGE>   7

                2.12 ERISA: Public Law 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.

                2.13 Executive: Any person in an executive classification of an
Employer who (i) is receiving remuneration for personal services rendered in the
employment of the Employer, and (ii) is paid in U.S. dollars from the Employer's
U.S. payroll.

                2.14 Fair Market Value: For purposes of converting a
Participant's deferrals to phantom PBG Common Stock as of any date (or phantom
PepsiCo Capital Stock prior to January 1, 2001), the Fair Market Value of such
stock is determined as the average of the high and low price on such date (or if
such date is not a trading date, the immediately preceding date that is a
trading date) for PBG Common Stock (or PepsiCo Capital Stock) as reported on the
composite tape for securities listed on the New York Stock Exchange, Inc.,
rounded to four decimal places. For purposes of determining the value of a Plan
distribution or for reallocating amounts between phantom investment options
under the Plan, the Fair Market Value of phantom PBG Common Stock (or phantom
PepsiCo Capital Stock prior to January 1, 2001) is determined as the closing
price on the applicable Valuation Date (identified based on the Plan
Administrator's current procedures) for PBG Common Stock (or PepsiCo Capital
Stock) as reported on the composite tape for securities listed on the New York
Stock Exchange, Inc., rounded to four decimal places.

                2.15 Misconduct: A Termination of Employment that results from
the Participant's (a) criminal conduct, (b) deliberate continual refusal to
perform employment duties on substantially a full time basis, (c) deliberate and
continued refusal to act in accordance with any specific lawful instructions of
an authorized officer or more senior employee, or (d) deliberate conduct which
could be materially damaging to the Company or any of its business operations
without a reasonable good faith belief by the Employee that such conduct was in
the best interests of the Company. A Termination of Employment shall not be
deemed on account of Misconduct hereunder unless the senior personnel executive
of the Company shall confirm that any such termination is on account of
Misconduct as defined hereunder. Any voluntary termination in anticipation of an
involuntary Termination of Employment on account of Misconduct shall be deemed
to be a Termination of Employment on account of Misconduct.

                2.16 Participant: Any Executive who is qualified to participate
in this Plan in accordance with Section 3.1 and who has an Account. A
Participant includes any individual who deferred compensation under the Prior
Plan prior to the Start Date and for whom any Employer maintains on its books an
Account for such deferred compensation as of the Start Date. An active
Participant is one who is currently deferring under Section 3.2.

                2.17 PBG: The Pepsi Bottling Group, Inc., a corporation
organized and existing under the laws of the State of Delaware, or its successor
or successors.

                                       4
<PAGE>   8

                2.18 Performance Unit Payout: The adjusted performance unit
award payable to an Executive under the Company's Long Term Incentive Plan or
any other plan that is designated by the Plan Administrator during a Plan Year,
to the extent paid in U.S. dollars from an Employer's U.S. payroll. An eligible
Executive's performance unit award shall be adjusted to reduce it for applicable
tax withholdings, Executive authorized deductions, tax levies, garnishments and
such other amounts as the Plan Administrator recognizes as reducing the amount
of such awards available for deferral.

                2.19 Plan: The PBG Executive Income Deferral Program, the plan
set forth herein, as it may be amended and restated from time to time.

                2.20 Plan Administrator: The Compensation and Management
Development Committee of the Board of Directors of the Company or its delegate
or delegates, which shall have the authority to administer the Plan as provided
in Article V.

                2.21 Plan Year: Except with respect to the first Plan Year,
which begins on the Start Date and ends on December 31, 1999, the 12-consecutive
month period beginning on January 1 and ending on December 31.

                2.22 Prior Plan: The PepsiCo Executive Income Deferral Program,
as in effect for periods before the Start Date.

                2.23 Retirement: Termination of service with the Company and its
affiliates after attaining eligibility for retirement. A Participant attains
eligibility for retirement when he or she attains (i) at least age 55 with 10 or
more years of service, (ii) at least age 65 with 5 or more years of service, or
(iii) such other eligibility requirement for retirement under the PBG Salaried
Employees Retirement Plan as may apply to the Participant (whichever occurs
earliest) while in the employment of the Company or any of its affiliates that
are determined by the Plan Administrator to qualify for this purpose. A
Participant's service is determined under the terms of the PBG Salaried
Executives Retirement Plan.

                2.24 Risk of Forfeiture Subaccount: The Deferral Subaccount
provided for by Section 4.3 to contain the portion of each separate deferral
that is subject to forfeiture.

                2.25 Start Date: The date this Plan originally became effective,
12:00 A.M., Eastern Daylight Time, on the 1st day of April, 1999.

                2.26 Stock Option Gains: The gains on an eligible Executive's
stock options that have been granted by PepsiCo or PBG and designated as
eligible for deferral under the Plan by the Plan Administrator pursuant to
Section 3.3(c). With respect to any options that are made subject to a Stock
Option Gain deferral election, the gains on such options shall be determined
through a sale of related shares by the issuer of the underlying shares net of:
(i) the exercise price of the options, (ii) any transaction costs incurred when
such gains are

                                       5
<PAGE>   9

captured through the sale of related shares, and (iii) any related taxes that
the issuer determines will not otherwise be satisfied by the Participant. For
purposes of such sales, the issuer may aggregate shares related to the options
of different Participants, sell them over one or more days and divide the net
proceeds from such aggregate sales between the Participants in a reasonable
manner. The issuer shall have absolute discretion with respect to the timing and
aggregation of such sales.

                2.27 Termination of Employment: A Participant's cessation of
employment with the Company, all Employers and all other Company subsidiaries
and affiliates (as defined for this purpose by the Plan Administrator). For
purposes of determining forfeitures under Section 4.3 and distributing a
Participant's Account under Section 4.4, the following shall apply:

                      (a) A Participant does not have a Termination of
        Employment when the business unit or division of the Company that
        employs him is sold if the Participant and substantially all employees
        of that entity continue to be employed by the entity or its successor
        after the sale. A Participant also does not have a Termination of
        Employment when the subsidiary of the Company that employs him is sold
        if: (i) the Participant continues to be employed by the entity or its
        successor after the sale, and (ii) the Participant's interest in the
        Plan continues to be carried as a liability by that entity or its
        successor after the sale through a successor arrangement. In each case,
        the Participant's Termination of Employment shall occur upon the
        Participant's post-sale termination of employment from such entity or
        its successor (and their related organizations, as determined by the
        Plan Administrator).

                      (b) With respect to any individual deferral, the term
        "Termination of Employment" may encompass a Participant's death or death
        may be considered a separate event, depending upon the convention the
        Plan Administrator follows with respect to such deferral.

                      (c) A Participant who transfers to PepsiCo with the
        approval of PBG shall not be deemed to have terminated employment.

                2.28 Valuation Date: Each date as specified by the Plan
Administrator from time to time as of which Participant Accounts are valued in
accordance with Plan procedures that are currently in effect. As of the Start
Date, the Valuation Dates are March 31, June 30, September 30 and December 31.
In accordance with procedures that may be adopted by the Plan Administrator, any
current Valuation Date may be changed. Values are determined as of the close of
a Valuation Date or, if such date is not a business day, as of the close of the
immediately preceding business day.

                                       6
<PAGE>   10

                                   ARTICLE III

                                  PARTICIPATION

                3.1 Eligibility to Participate.

                      (a) An Executive shall be eligible to defer compensation
        under the Plan while employed by an Employer as an Executive classified
        (or grandfathered) as Band II or above (or an equivalent level for
        employees not under the band system). Notwithstanding the preceding
        sentence, from time to time the Plan Administrator may modify, limit or
        expand the class of Executives eligible to defer hereunder, pursuant to
        criteria for eligibility that need not be uniform among all or any group
        of Executives. During the period an individual satisfies all of the
        eligibility requirements of this section, he or she shall be referred to
        as an eligible Executive.

                      (b) Each eligible Executive becomes an active Participant
        on the date an amount is first withheld from his or her compensation
        pursuant to an Election Form submitted by the Executive to the Plan
        Administrator under Section 3.3.

                      (c) An individual's eligibility to participate actively by
        making deferrals under Section 3.2 shall cease upon the election
        termination date (as defined below) occurring after the earlier of:

                             (1) The date he or she ceases to be an Executive
                who is described in the first sentence of subsection (a) above
                (unless a less restrictive eligibility standard has been adopted
                in accordance with the second sentence of subsection (a), in
                which case only Paragraph (2) below shall apply); or

                             (2) The date the Executive ceases to be eligible
                under criteria described in the second sentence of subsection
                (a) above.

        For purposes of this subsection, an individual's election termination
        date shall be a date as soon as administratively practicable following
        the cessation of eligibility (or such other date as may be determined in
        accordance with rules of the Plan Administrator).

                      (d) An individual, who has been an active Participant
        under the Plan, ceases to be a Participant on the date his or her
        Account is fully paid out.

                                       7
<PAGE>   11

                3.2 Deferral Election.

                      (a) Each eligible Executive may make an election to defer
        under the Plan any whole percentage (up to 100%) of his or her Base
        Compensation, Bonus Compensation, Performance Unit Payout and Stock
        Option Gains in the manner described in Section 3.3. The Plan
        Administrator may also permit the Participant to specify two alternative
        deferral percentages that will be applicable to Bonus Compensation; one
        deferral percentage will apply to a Participant's Bonus Compensation if
        his or her bonus is equal to or greater than the target amount, and the
        other deferral percentage will apply to a Participant's Bonus
        Compensation if his or her bonus is less than the target amount. Any
        percentage of Base Compensation deferred by an eligible Executive for a
        Plan Year will be deducted each pay period during the Plan Year for
        which he or she has Base Compensation and is an eligible Executive. The
        percentage of Bonus Compensation or Performance Unit Payout deferred by
        an eligible Executive for a Plan Year will be deducted from his or her
        payment under the applicable compensation program at the time it would
        otherwise be made, provided he or she remains an eligible Executive at
        such time. Any Stock Option Gains deferred by an eligible Executive
        shall be captured as of the date or dates applicable for the category of
        underlying options under procedures adopted by the Plan Administrator,
        provided that the Plan Administrator determines the eligible Executive's
        rights in such options may still be recognized at such time.

                      (b) To be effective, an eligible Executive's Election Form
        must set forth the percentage of Base Compensation, Bonus Compensation
        or Performance Unit Payout to be deferred (or for a deferral of Stock
        Option Gains, the specific options on which any gains are to be
        deferred), the investment choice under Section 4.1 (which investment
        must be stated in multiples of 5 percent), the deferral period under
        Section 3.4, the eligible Executive's Beneficiary designation, and any
        other information that may be requested by the Plan Administrator from
        time to time. In addition, the Election Form must meet the requirements
        of Section 3.3 below.

                      (c) Notwithstanding subsection (a) above, the Plan
        Administrator in its discretion may implement rules and procedures from
        time to time that allow Participants (i) to elect to defer Base
        Compensation and/or Bonus Compensation in amounts other than whole
        percentages, such as in whole dollar amounts, or (ii) to specify a
        dollar maximum that would limit their percentage deferral elections of
        Base Compensation and/or Bonus Compensation.

                3.3 Time and Manner of Deferral Election.

                      (a) Deferrals of Base Compensation. Subject to the next
        sentence, an eligible Executive must make a deferral election for a Plan
        Year with respect to Base Compensation at least two months prior to the
        Plan Year in which the Base

                                       8
<PAGE>   12

        Compensation would otherwise be paid. An individual who newly becomes an
        eligible Executive will have 30 days from the date the individual
        becomes an eligible Executive to make an election with respect to
        compensation for payroll cycles that begin after the election is
        received (if this 30-day period is a longer election period than applies
        under the preceding sentence).

                      (b) Deferrals of Bonuses and Performance Unit Payouts.
        Subject to the next two sentences, an eligible Executive must make a
        deferral election for a Plan Year with respect to his or her Bonus
        Compensation or Performance Unit Payout at least six months prior to the
        Plan Year in which the Bonus Compensation or Performance Unit Payout
        would otherwise be paid. An individual who newly becomes an eligible
        Executive may make a deferral election with respect to his or her Bonus
        Compensation or Performance Unit Payout to be paid during the succeeding
        Plan Year later than the date applicable under the previous sentence so
        long as the deferral election is made: (i) within 30 days of the date
        the individual becomes an eligible Executive, and (ii) sufficiently
        prior to the first day of such succeeding Plan Year to ensure, in the
        discretionary judgment of the Plan Administrator, that the amount to be
        deferred will not have been constructively received (under all the facts
        and circumstances).

                      (c) Deferrals of Stock Option Gains. With respect to each
        grant of PepsiCo or PBG stock options that are held by eligible
        Executives, the Plan Administrator shall designate at such time as it
        deems appropriate whether gains on the grant shall be eligible for
        deferral. Such designation may apply to all (or less than all) of the
        Executives that hold such grant. Thereafter, the Plan Administrator
        shall notify Executives holding designated options that such options
        then qualify for deferral of their related Stock Option Gains. Subject
        to the next sentence, an eligible Executive who has such qualifying
        options must make a deferral election with respect to his or her related
        Stock Option Gains at least 6 months before such qualifying options'
        proposed capture date (as defined below) or, if earlier, in the calendar
        year preceding the year of the proposed capture date. The "proposed
        capture date" for a set of options shall be the earliest date that the
        issuer of the underlying stock would capture a Participant's Stock
        Option Gains in accordance with the deferral agreement prepared for such
        purpose by the Plan Administrator.

                      (d) General Provisions. A separate deferral election under
        (a), (b) or (c) above must be made by an eligible Executive for each
        category of a Plan Year's compensation that is eligible for deferral. If
        an eligible Executive fails to file a properly completed and executed
        Election Form with the Plan Administrator by the prescribed time, he or
        she will be deemed to have elected not to defer any Base Compensation,
        Bonus Compensation, Performance Unit Payout or Stock Option Gains, as
        the case may be, for the applicable Plan Year. An election is
        irrevocable once received and determined by the Plan Administrator to be
        properly completed.

                                       9
<PAGE>   13

        Increases or decreases in the amount or percentage a Participant elects
        to defer shall not be permitted during a Plan Year. Notwithstanding the
        preceding three sentences, to the extent necessary because of
        circumstances beyond the control of the Executive, the Plan
        Administrator may grant an extension of any election period and may
        permit (to the extent deemed necessary for orderly Plan administration
        or to avoid undue hardship to an eligible Executive) the complete
        revocation of an election with respect to future deferrals. Any such
        extension or revocation shall be available only if the Plan
        Administrator determines that it shall not trigger constructive receipt
        of income and is desirable for plan administration, and only upon such
        conditions as may be required by the Plan Administrator.

                      (e) Beneficiaries. A Participant designates on the
        Election Form a Beneficiary to receive payment, in the event of his or
        her death, of the amounts credited to his or her applicable Deferral
        Subaccount; provided, however, the Plan Administrator may require a
        Participant to make an aggregate Beneficiary designation, which shall
        apply to some or all of his or her Deferral Subaccounts (as specified in
        the discretion of the Plan Administrator) on a uniform basis. A
        Beneficiary is paid in accordance with the terms of a Participant's
        Election Form, as interpreted by the Plan Administrator in accordance
        with the terms of this Plan. At any time, a Participant may change a
        Beneficiary designation for his or her Deferral Subaccounts in a writing
        that is signed by the Participant and filed with the Plan Administrator
        prior to the Participant's death, and that meets such other standards as
        the Plan Administrator shall require from time to time.

                3.4 Period of Deferral. An eligible Executive making a deferral
election shall specify a deferral period on his or her Election Form by
designating a specific payout date, one or more specific payout events or both a
date and one or more specific events from the choices that are made available to
the eligible Executive by the Plan Administrator. From time to time in its
discretion, the Plan Administrator may condition a Participant's right to
designate one or more specific payout events on the Participant also specifying
a payout date. Subject to the next sentence, an eligible Executive's elected
period of deferral shall run until the earliest occurring date or event
specified on his or her Election Form. Notwithstanding an eligible Executive's
actual election, an eligible Executive shall be deemed to have elected a period
of deferral of not less than:

                      (a) For Base Compensation, at least until January 1 of the
        second Plan Year following the Plan Year during which the Base
        Compensation would have been paid absent the deferral (until 6 months
        after the Plan Year during which the Base Compensation would have been
        paid for deferral elections made before the Start Date);

                                       10
<PAGE>   14

                      (b) For Bonus Compensation, at least 2 years after the
        date the Bonus Compensation would have been paid absent the deferral (1
        year for deferral elections made before the Start Date);

                      (c) For Performance Unit Payouts, at least 2 years after
        the date the Performance Unit Payout would have been paid absent the
        deferral (1 year for deferral elections made before the Start Date); and

                      (d) For Stock Option Gains, at least 2 years after the
        date the Stock Option Gain is credited to a Deferral Subaccount for the
        benefit of the Participant (1 year for deferral elections made before
        the Start Date).

                                       11
<PAGE>   15

                                   ARTICLE IV

                            INTERESTS OF PARTICIPANTS

                4.1 Accounting for Participants' Interests.

                      (a) Deferral Subaccounts. Each Participant shall have at
        least one separate Deferral Subaccount for each separate deferral of
        Base Compensation, Bonus Compensation, Performance Unit Payout or Stock
        Option Gains made by the Participant under this Plan. A Participant's
        deferral shall be credited to his or her Account as soon as practicable
        following the date when the deferral of compensation actually occurs, as
        determined by the Plan Administrator. A Participant's Account is a
        bookkeeping device to track the value of his or her deferrals (and his
        or her Employer's liability therefor). No assets shall be reserved or
        segregated in connection with any Account, and no Account shall be
        insured or otherwise secured.

                      (b) Account Earnings or Losses. As of each Valuation Date,
        a Participant's Account shall be credited with earnings and gains (and
        shall be debited for expenses and losses) determined as if the amounts
        credited to his or her Account had actually been invested as directed by
        the Participant in accordance with this section (as modified by Section
        4.3, if applicable). The Plan provides only for "phantom investments,"
        and therefore such earnings, gains, expenses and losses are hypothetical
        and not actual. However, they shall be applied to measure the value of a
        Participant's Account and the amount of his or her Employer's liability
        to make deferred payments to or on behalf of the Participant.

                      (c) Investment Options. Each of a Participant's Deferral
        Subaccounts (other than those containing Stock Option Gains) shall be
        invested on a phantom basis in any combination of phantom investment
        options specified by the Participant (or following the Participant's
        death, by his or her Beneficiary) from those offered by the Plan
        Administrator for this purpose from time to time. Subsection (e) below
        governs the phantom investment options available for deferrals of Stock
        Option Gains. The Plan Administrator may discontinue any phantom
        investment option with respect to some or all Accounts, and it may
        provide rules for transferring a Participant's phantom investment from
        the discontinued option to a specified replacement option (unless the
        Participant selects another replacement option in accordance with such
        requirements as the Plan Administrator may apply).

                                       12
<PAGE>   16

                             (1) Phantom Investment Options Beginning January 1,
                2001. Effective as of January 1, 2001, the phantom investment
                options offered under the Plan are as follows:

                                    (i) Phantom PBG Stock Account. Participant
                      Accounts invested in this phantom option are adjusted to
                      reflect an investment in PBG Common Stock. An amount
                      deferred or transferred into this option is converted to
                      phantom shares (or units) of PBG Common Stock of
                      equivalent value by dividing such amount by the Fair
                      Market Value of a share of PBG Common Stock (or of a unit
                      in the Account) on the date as of which the amount is
                      treated as invested in this option by the Plan
                      Administrator. The Plan Administrator shall adopt a fair
                      valuation methodology for valuing a phantom investment in
                      this option, such that the value shall reflect the
                      complete value of an investment in PBG Common Stock in
                      accordance with Clause (A) or (B) below.

                                            (A) The Plan Administrator may value
                             a phantom investment in PBG Common Stock pursuant
                             to an accounting methodology which unitizes partial
                             shares as well as any amounts that would be
                             received by the Account as dividends (if dividends
                             were paid on phantom shares/units of PBG Common
                             Stock as they are on actual shares of equivalent
                             value). For the time period this methodology is
                             chosen, partial shares and the above dividends
                             shall be converted to units and credited to the
                             Participant's Phantom PBG Stock Account.

                                            (B) The Plan Administrator may also
                             value a phantom investment in PBG Common Stock by
                             separately accounting for partial shares and any
                             amounts that would be received by the Account as
                             dividends (if dividends were paid on phantom shares
                             of PBG Common Stock as they are on actual shares).
                             For the time period this methodology is chosen, a
                             dividend subaccount shall be created to separately
                             account for the dollar value of the partial shares
                             and the dividends and such dividend subaccount
                             shall be invested in a phantom investment option
                             designated by the Plan Administrator from those
                             currently in effect.

                      A Participant's interest in the Phantom PBG Stock Account
                      is valued as of a Valuation Date by multiplying the number
                      of phantom shares (or units) credited to his or her
                      Account on such date by the Fair Market Value of a share
                      of PBG Common Stock (or of a unit in the Account) on such
                      date, and then adding the value of the Participant's
                      dividend

                                       13
<PAGE>   17

                      subaccount (if the methodology in clause (B) above is
                      used). If shares of PBG Common Stock change by reason of
                      any stock split, stock dividend, recapitalization, merger,
                      consolidation, spin-off, combination or exchange of shares
                      or other any other corporate change treated as subject to
                      this provision by the Plan Administrator, such equitable
                      adjustment shall be made in the number and kind of phantom
                      shares/units credited to an Account or subaccount as the
                      Plan Administrator may determine to be necessary or
                      appropriate. In no event will shares of PBG Common Stock
                      actually be purchased or held under this Plan, and no
                      Participant shall have any rights as a shareholder of PBG
                      Common Stock on account of an interest in this phantom
                      option.

                                    (ii) PBG 401(k) Accounts. From time to time,
                      the Plan Administrator shall designate which (if any) of
                      the investment options under the Company's 401(k) Plan
                      shall be available as phantom investment options under
                      this Plan. Effective as of January 1, 2001, such available
                      phantom options are the Security Plus Fund, Bond Index
                      Fund, Total U.S. Equity Index Fund, Large Cap Equity Index
                      Fund, Mid Cap Equity Index Fund, Small Cap Equity Index
                      Fund and the International Equity Index Fund. Participant
                      Accounts invested in these phantom options are adjusted to
                      reflect an investment in the corresponding investment
                      options under the PBG 401(k) Plan. An amount deferred or
                      transferred into one of these options is converted to
                      phantom units in the applicable PBG 401(k) fund of
                      equivalent value by dividing such amount by the value of a
                      unit in such fund on the date as of which the amount is
                      treated as invested in this option by the Plan
                      Administrator. Thereafter, a Participant's interest in
                      each such phantom option is valued as of a Valuation Date
                      by multiplying the number of phantom units credited to his
                      or her Account on such date by the value of a unit in the
                      applicable PBG 401(k) fund on such date.

                                    (iii) Other Accounts. From time to time, the
                      Plan Administrator shall designate which (if any) other
                      investment options shall be available as phantom
                      investment options under this Plan. These may be in
                      addition to those provided for above. They may also be in
                      lieu of some or all of them. Any of these phantom
                      investment options shall be administered under procedures
                      implemented from time to time by the Plan Administrator.

                             (2) Phantom Investment Options Before January 1,
                2001. For Plan Years ending before January 1, 2001, the phantom
                investment options

                                       14
<PAGE>   18

                offered under the Plan shall be those phantom investment options
                provided for in Section 4.1(c)(1), except as modified and
                supplemented below:

                                    (i) Phantom PBG Stock Account. Investments
                      in the Phantom PBG Stock Account shall be governed by the
                      provisions of Section 4.1(c)(1)(i), except that the
                      valuation methodology in Section 4.1(c)(1)(i)(B) shall be
                      used and that amounts credited to the dividend subaccount
                      shall be invested in the phantom Interest Bearing Cash
                      Account.

                                    (ii) PBG 401(k) Accounts. Investments in any
                      phantom options based on the Company's 401(k) Plan shall
                      be governed by the provisions of Section 4.1(c)(1)(ii),
                      except that the available phantom options shall be the
                      Equity-Index Account, the Equity-Income Account and the
                      Security Plus Account.

                                    (iii) Phantom Interest Bearing Cash Account.
                      Participant Accounts may be invested in this phantom
                      option and shall accrue a return based upon the prime rate
                      of interest announced from time to time by Citibank, N.A.
                      (or another bank designated by the Plan Administrator from
                      time to time). Returns accrue during the period since the
                      last Valuation Date based on the prime rate in effect on
                      the first business day after such Valuation Date and are
                      compounded annually. An amount deferred or transferred
                      into this option is credited with the applicable rate of
                      return beginning with the date as of which the amount is
                      treated as invested in this option by the Plan
                      Administrator.

                               (3) Transfer Rules for 2001 Investment Option
                Change. Unless a Participant selects another replacement option
                prior to January 1, 2001 in accordance with such requirements as
                the Plan Administrator may implement, the Plan Administrator
                shall transfer and convert a Participant's phantom investments
                effective as of January 1, 2001 as follows:

                                    (i) Phantom investments in the Interest
                      Bearing Cash Account shall be converted and transferred
                      into the Security Plus Fund;

                                    (ii) Phantom investments in the Security
                      Plus Account shall be converted and transferred into the
                      Security Plus Fund;

                                    (iii) Phantom investments in the
                      Equity-Index Account shall be converted and transferred
                      into the Large Cap Index Fund; and

                                       15
<PAGE>   19

                                    (iv) Phantom investments in the
                      Equity-Income Account shall be converted and transferred
                      into the Total U.S. Equity Index Fund.

                All the above conversions and transfers shall be effectuated
                pursuant to procedures implemented by the Plan Administrator.

                      (d) Method of Allocation. With respect to any deferral
        election by a Participant, the Participant must use his or her Election
        Form to allocate the deferral in 5 percent increments among the phantom
        investment options then offered by the Plan Administrator. Thereafter, a
        Participant may reallocate previously deferred amounts in a Deferral
        Subaccount by properly completing and submitting a fund transfer form
        provided by the Plan Administrator and specifying, in 5 percent
        increments, the reallocation of his or her Deferral Subaccount among the
        phantom investment options then offered by the Plan Administrator for
        this purpose. The Plan Administrator may provide that such allocations
        or reallocations are to be made in such different increment as is
        selected by the Plan Administrator. Any such transfer form shall be
        effective as of the date specified by the Plan Administrator in its
        discretion from time to time. The Plan Administrator may specify any
        date as the effective date of such transfer forms, including the
        Valuation Date, and the Plan Administrator may also specify a minimum
        number of days in advance of which such transfer form must be received
        in order for the form to become effective as of the specified effective
        date. Notwithstanding the preceding provisions of this subsection, the
        Plan Administrator may at any time alter the effective date of any
        allocation pursuant to Section 5.3(j). If more than one transfer form is
        received on a timely basis for a Deferral Subaccount, the transfer form
        that the Plan Administrator determines to be the most recent shall be
        followed. In the case of a Participant who is determined by the Plan
        Administrator to be subject to Section 16 of the Securities Exchange Act
        of 1934, as amended (the "Act"), the reallocation of any Subaccount of
        the Participant may be delayed to the extent the Plan Administrator
        deems it necessary to satisfy Rule 16b-3 promulgated under the Act. The
        preceding sentence shall apply notwithstanding any provision of the Plan
        to the contrary.

                      (e) Investment Choices for Stock Option Gains. Deferrals
        of Stock Option Gains initially may be invested only in the Phantom PBG
        Stock Account. In the case of a Participant who has attained eligibility
        for Retirement, the Plan Administrator may make available some or all of
        the other phantom investment options described in subsection (c) above.
        In this case, any election to reallocate the balance in the
        Participant's applicable Deferral Subaccount shall be governed by the
        foregoing provisions of this section.

                4.2 Vesting of a Participant's Account. Except as provided in
Section 4.3, a Participant's interest in the value of his or her Account shall
at all times be 100 percent

                                       16
<PAGE>   20

vested, which means that it will not forfeit as a result of his or her
Termination of Employment.

                4.3 Risk of Forfeiture Subaccounts. A Participant may elect to
defer Base Compensation, Bonus Compensation or Performance Unit Payouts to a
Risk of Forfeiture Subaccount only if: (i) he or she had, as of June 1, 1994, a
deferred compensation subaccount under the Prior Plan maintained under a
forfeiture agreement (as defined below), and (ii) he or she has not yet attained
eligibility for Retirement when the first amount would be deferred pursuant to
his or her current risk-of-forfeiture election. A "forfeiture agreement" is an
agreement with the Company, any Employer, or one of their predecessors providing
that the subaccount would be forfeited if the employee terminated employment
voluntarily or on account of Misconduct prior to Retirement. A Participant who
meets these requirements may elect under Article III to defer some or all of his
or her Base Compensation, Bonus Compensation or Performance Unit Payouts to a
Risk of Forfeiture Subaccount subject to the following terms. (The date when a
Participant attains eligibility for Retirement is specified in the definition of
"Retirement.")

                      (a) A Risk of Forfeiture Subaccount will be terminated and
        forfeited in the event that the Participant has a Termination of
        Employment that is voluntary or because of his or her Misconduct prior
        to the earliest of:

                             (1) The end of the deferral period designated in
                his or her Election Form for such deferral (or if later, the end
                of such minimum period as may be required under Section 3.4);

                             (2)  The date the Participant attains eligibility
                for Retirement; or

                             (3) The date indicated on his or her Election Form
                as the end of the risk of forfeiture condition (but not before
                completing the minimum risk of forfeiture period required by the
                Plan Administrator from time to time).

                      (b) A Risk of Forfeiture Subaccount shall become fully
        vested (and shall cease to be a Risk of Forfeiture Subaccount) when:

                             (1) The Participant reaches any of the dates in
                subsection (a) above while still employed by the Company or one
                of its affiliates (as defined by the Plan Administrator for this
                purpose), or

                             (2) On the date the Participant terminates
                involuntarily from his or her Employer (including death and
                termination for Disability), provided that such termination is
                not for his or her Misconduct.

                                       17
<PAGE>   21

                      (c) No amounts credited to a Risk of Forfeiture Subaccount
        may be transferred to a subaccount of the Participant that is not a Risk
        of Forfeiture Subaccount. No amounts credited to a subaccount of the
        Participant that is not a Risk of Forfeiture Subaccount may be
        transferred to a Risk of Forfeiture Subaccount.

                      (d) A Participant may initially direct and then reallocate
        his or her Risk of Forfeiture Subaccount to any of the phantom
        investment options under the Plan that are currently available for such
        direction or reallocation, whichever applies. During the period before a
        Risk of Forfeiture Subaccount ceases to be a Risk of Forfeiture
        Subaccount, the return under any such phantom investment option shall be
        supplemented as follows.

                             (1)  In the case of the Phantom PBG Stock Account:

                                    (A) If the Plan Administrator is using the
                      dividend subaccount valuation methodology of Section
                      4.1(c)(1)(i)(B), the Participant's dividend subaccount
                      thereunder shall be credited with an additional year-end
                      dividend amount equal to 2 percent of the average closing
                      price of PBG Common Stock for the 30 business days
                      preceding the end of the Company's fiscal year multiplied
                      by the number of phantom shares of PBG Common Stock
                      credited to the Participant's Account as of the end of the
                      year. In addition, the Participant's dividend subaccount
                      shall earn interest at a rate that is 2 percent above the
                      rate ordinarily applicable under the phantom investment
                      option in which the dividend subaccount is invested for
                      the period that it is contained within a Risk of
                      Forfeiture Subaccount.

                                    (B) If the Plan Administrator is using the
                      unit valuation methodology of Section 4.1(c)(1)(i)(A), the
                      Participant's interest in the PBG Phantom Stock Account
                      shall be increased in value by 2% as of the end of the
                      Plan Year.

                If the Participant's subaccount was not a Risk of Forfeiture
                Subaccount for the entire year (or if the Participant
                reallocated amounts to the Phantom PBG Stock Account after the
                beginning of the year), the above additional investment return
                for the year will be prorated down appropriately, as determined
                by the Plan Administrator.

                             (2) In the case of any other available phantom
                investment option for the Plan Year, the return on each such
                option shall be supplemented with an additional 2% annual return
                for the period that it is held within a Risk of Forfeiture
                Subaccount (but prorated for periods of such investment of less
                than a year).

                                       18
<PAGE>   22

                4.4 Distribution of a Participant's Account. A Participant's
Account shall be distributed as provided in this Section 4.4, subject to Section
5.3(j). The portion of any Deferral Subaccount that is invested in the Phantom
PBG Stock Account may be distributed, at the option of the Plan Administrator,
either in the form of cash or in whole shares of PBG Common Stock (with cash for
any partial share and, if applicable, the value of the dividend subaccount). The
Plan Administrator may also adopt a rule that eliminates the option to pay out
cash under the prior sentence (except for any partial share and, if applicable,
the value of the dividend subaccount). All other Deferral Subaccount balances
shall be distributed in cash.

                      (a)  Scheduled Payout Date. With respect to a specific
        deferral, a Participant's "Scheduled Payout Date" shall be the earlier
        of:

                             (1) The first day of the calendar quarter (or at
                the Plan Administrator's Option, the first Distribution Date)
                that follows the date selected by the Participant for such
                deferral in accordance with Section 3.4, or

                             (2) The first day of the calendar quarter (or at
                the Plan Administrator's Option, the first Distribution Date)
                that follows the earliest to occur event selected by the
                Participant for such deferral in accordance with Section 3.4.

        With respect to any deferral, if a Participant selects only a payout
        event that might not occur (such as Retirement) and then terminates
        employment before the occurrence of the event, the Plan Administrator
        may adopt rules to specify the Scheduled Payout Date that shall apply to
        the deferral, notwithstanding the terms of the Participant's election.
        Unless an election has been made in accordance with subsection (b) below
        (or unless subsection (f) requires an earlier distribution), the
        Participant's Deferral Subaccount containing the deferral shall be
        distributed to the Participant in a single lump sum as soon as
        practicable following the Scheduled Payout Date.

                      (b) Payment Election. Unless subsection (f) below requires
        an earlier payout, a Participant may delay receipt of a Deferral
        Subaccount beyond its Scheduled Payout Date, or elect to receive
        installments rather than a lump sum, by making a payment election under
        this subsection. A payment election must be made by the end of the
        calendar year immediately preceding the calendar year containing the
        Scheduled Payout Date (or if earlier, at least 6 months before the
        Scheduled Payout Date). This deadline applies without regard to whether
        the Participant has received any notice of the deadline or the
        availability of a payment election. Any payment election to receive a
        lump sum at a later time must specify a revised payout date that is at
        least 2 years after the Scheduled Payout Date. Any payment election to
        receive installment payments in lieu of a lump sum shall specify the
        amount (or method for determining) each installment and a set of revised
        payout dates, the last of which must be at least 2 years

                                       19
<PAGE>   23

        after the Scheduled Payout Date. With respect to any Deferral
        Subaccount, only one election may be made under this subsection.
        Beneficiaries are not permitted to make elections under this subsection.
        Actual payments shall be made as soon as practicable following a revised
        payout date.

                      (c) Valuation. In determining the amount of any individual
        distribution pursuant to subsection (a), (b) or (f), the Participant's
        Deferral Subaccount shall continue to be credited with earnings and
        gains (and debited for expenses and losses) under Sections 4.1 and 4.3
        until the Valuation Date preceding the Scheduled Payout Date or revised
        or earlier payout date for such distribution (whichever is applicable).
        In determining the value of a Participant's remaining Deferral
        Subaccount following an installment distribution, such installment
        distribution shall reduce the value of the Participant's Deferral
        Subaccount as of the close of the Valuation Date preceding the revised
        payout date for such installment.

                      (d) Limitations. The following limitations apply to
        distributions from the Plan:

                             (1) Installments may only be made at the time
                intervals as specified by the Plan Administrator in its
                discretion for this purpose from time to time. Specifically, the
                Plan Administrator may allow monthly, quarterly, semi-annual or
                annual installments. However, installments may be paid over a
                period of no more than 20 years, and not later than the
                Participant's 80th birthday (or what would have been his or her
                80th birthday, if the Participant dies earlier).

                             (2) If a Participant has elected a Scheduled Payout
                Date that would be after his or her 80th birthday, the
                Participant shall be deemed to have elected his or her 80th
                birthday as his or her Scheduled Payout Date.

                             (3) If a Participant has elected to defer income,
                which would qualify as performance-based compensation under Code
                section 162(m), into a Risk of Forfeiture Subaccount, then such
                subaccount may not be paid out at any time while the Participant
                is a covered employee under Code section 162(m)(3), to the
                extent the Plan Administrator determines it would result in
                compensation being paid to the Participant in such year that
                would not be deductible under Code section 162(m). The payout of
                any such amount shall be deferred until a year when the
                Participant is no longer a section 162(m) covered employee. The
                Plan Administrator may waive the foregoing provisions of this
                paragraph to the extent necessary to avoid an undue hardship to
                the Participant. This paragraph shall apply notwithstanding any
                provision of the Plan to the contrary.

                                       20
<PAGE>   24

                             (4) In the case of a Participant who is determined
                by the Plan Administrator to be subject to Section 16 of the
                Securities Exchange Act of 1934, as amended (the "Act"), the
                Participant's Scheduled Payout Date and related distribution may
                be delayed to the extent the Plan Administrator deems it
                necessary to satisfy Rule 16b-3 promulgated under the Act. This
                paragraph shall apply notwithstanding any provision of the Plan
                to the contrary.

                      (e) Upon a Participant's death, his or her Beneficiary
        shall be paid each Deferral Subaccount still standing to the
        Participant's credit under the Plan in accordance with the terms of the
        Participant's payout election for such subaccount under Section 3.4, or
        his or her payment election under subsection (b) above, whichever is
        applicable. Any claim to be paid any amounts standing to the credit of a
        Participant in connection with the Participant's death must be received
        by the Plan Administrator at least 14 days before any such amount is
        paid out by the Plan Administrator. Any claim received thereafter is
        untimely, and it shall not lie against the Plan, the Company, any
        Employer, the Plan Administrator or any other party acting for one or
        more of them.

                      (f) Notwithstanding subsections (a) and (b) above, if a
        Participant's Termination of Employment is voluntary (but not counting a
        Retirement) or is on account of his or her Misconduct, all of the
        Participant's Deferral Subaccounts shall be distributed as provided in
        this subsection.

                             (1) If the total balance of all of the
                Participant's Deferral Subaccounts as of the end of the calendar
                quarter (or such other period as the Plan Administrator
                specifies from time to time) during which the Termination of
                Employment occurs equals $25,000 or less, all Deferral
                Subaccounts shall be distributed to the Participant as a single
                lump sum as soon as practicable after the first day of the
                calendar quarter (or at the Plan Administrator's option, the
                first Distribution Date) that follows the Participant's last day
                of employment.

                             (2) If the total balance of all of the
                Participant's Deferral Subaccounts as of the end of the calendar
                quarter (or such other period as the Plan Administrator
                specifies from time to time) during which the Termination of
                Employment occurs is greater than $25,000, all Deferral
                Subaccounts shall be distributed to the Participant as a single
                lump sum as soon as practicable after the first day of the
                calendar quarter (or at the Plan Administrator's option, the
                first Distribution Date) that follows at least one year after
                the Participant's last day of employment.

        Notwithstanding (1) and (2) above, a Deferral Subaccount shall not be
        distributed under this subsection before the end of the minimum period
        of deferral that is

                                       21
<PAGE>   25

        applicable to the Deferral Account under Section 3.4. If the preceding
        sentence delays payout of a distribution, payout shall be made as soon
        as practicable after the minimum period of deferral.

                4.5 Acceleration of Payment in Certain Cases. Except as
expressly provided in this Section 4.5, no payments shall be made under this
Plan prior to the date (or dates) applicable under Section 4.4.

                      (a) A Participant who is suffering severe financial
        hardship resulting from extraordinary and unforeseeable events beyond
        the control of the Participant (and who does not have other funds
        reasonably available that could satisfy the severe financial hardship)
        may file a written request with the Plan Administrator for accelerated
        payment of all or a portion of the amount credited to his or her
        Account. A committee composed of representatives from the Company's
        Compensation Department, Tax Department and Law Department, or such
        other parties as the Plan Administrator may specify from time to time,
        shall have sole discretion to determine whether a Participant satisfies
        the requirements for a hardship request and the amount that may be
        distributed (which shall not exceed the amount reasonably necessary to
        alleviate the Participant's hardship).

                      (b) After a Participant has filed a written request
        pursuant to this section, along with all supporting material, the
        committee shall grant or deny the request within 60 days (or such other
        number of days as is customarily applied from time to time) unless
        special circumstances warrant additional time.

                      (c) The Plan Administrator may adjust the standards for
        hardship withdrawals from time to time to the extent it determines such
        adjustment to be necessary to avoid triggering constructive receipt of
        income under the Plan.

                      (d) A Beneficiary may also request a hardship distribution
        upon satisfaction of the foregoing requirements and subject to the
        foregoing limitations.

                      (e) When determined to be necessary in the interest of
        sound plan administration, the Plan Administrator may accelerate the
        payment of a class of Participants' Deferral Subaccounts hereunder. This
        shall only occur to the extent the Plan Administrator determines that
        such acceleration will not trigger constructive receipt of Deferral
        Subaccounts that are not paid out.

                      (f) When some or all of a Participant's Deferral
        Subaccount is distributed pursuant to this section, the distribution and
        such subaccount shall be valued as provided by the Plan Administrator,
        using rules patterned after those in Section 4.4(c) above, on the
        Valuation Date coincident with or immediately preceding

                                       22
<PAGE>   26

        the date on which the decision to make accelerated payment is made (or
        if later, the date on which it is deemed to be effective).

                4.6 Conversion of Deferral Subaccounts by Certain Participants.
Participants who are employed as an Executive classified as Band VI or above (or
an equivalent level for employees not under the band system) may elect to
convert all or any portion of one or more Deferral Subaccounts (other than a
Risk of Forfeiture Subaccount) to a form of split-dollar life insurance pursuant
to the terms and conditions of this section.

                      (a) To convert a Deferral Subaccount, the Participant must
        make a conversion election in the manner specified by the Plan
        Administrator from time to time. Any such election for a Deferral
        Subaccount must be made prior to making a payment election under Section
        4.4(b) for the Deferral Subaccount and not later than the earlier of:
        (i) the end of the calendar year immediately preceding the calendar year
        containing the Scheduled Payout Date applicable to such subaccount as
        set forth in Section 4.4(a) above, and (ii) the date 6 months before the
        Scheduled Payout Date. This deadline applies without regard to whether
        the Participant has received any notice of the deadline or the
        availability of a conversion election. In addition to other items or
        information that the Plan Administrator may require or request from time
        to time, the Participant must specify which Deferral Subaccounts the
        Participant desires to convert, the portion of each such Deferral
        Subaccount to be converted and the Participant must relinquish in
        writing all of his or her rights to the converted portion of such
        Deferral Subaccounts.

                      (b) To implement a conversion election, the Participant
        must also execute a split-dollar life insurance agreement with the
        Company in a form to be determined by the Plan Administrator. Such
        agreement shall set forth the interests of the Company and the
        Participant in the life insurance policy and, in addition to any other
        provisions that the Plan Administrator or Company shall require, such
        agreement shall (i) provide for the Company to receive, out of the life
        insurance policy's death proceeds, an amount equal to the cash value of
        the policy (or if greater, the total amount of premiums paid for the
        policy), (ii) require the Company to purchase and pay the premiums on a
        life insurance policy on the life of the Participant (or, at the
        Participant's election, on the joint lives of the Participant and the
        Participant's spouse), and (iii) specify the owner of the life insurance
        policy.

                      (c) The conversion of a Participant's Deferral Subaccounts
        shall be administered under rules and procedures implemented from time
        to time by the Plan Administrator. The Plan Administrator may require
        the Participant from time to time to execute other agreements, forms or
        elections as may be necessary to properly effectuate the conversion.

                                       23
<PAGE>   27

                      (d) The conversion election provided by this Section 4.6
        may be eliminated or otherwise restricted at any time in the discretion
        of the Plan Administrator.

                                       24
<PAGE>   28

                                    ARTICLE V

                               PLAN ADMINISTRATOR

                5.1 Plan Administrator. The Plan Administrator is the
Compensation and Management Development Committee of the Company's Board of
Directors (the "Committee") or its delegate or delegates, who shall act within
the scope of their delegation pursuant to such operating guidelines as the
Committee shall establish from time to time. The Plan Administrator is
responsible for the administration of the Plan.

                5.2 Action. Action by the Committee may be taken in accordance
with procedures that the Committee adopts from time to time or that the
Company's Law Department determines are legally permissible.

                5.3 Powers of the Plan Administrator. The Plan Administrator
shall administer and manage the Plan and shall have all powers necessary to
accomplish that purpose, including (but not limited to) the following:

                      (a) To exercise its discretionary authority to construe,
        interpret, and administer this Plan;

                      (b) To exercise its discretionary authority to make all
        decisions regarding eligibility, participation and deferrals, to make
        allocations and determinations required by this Plan, and to maintain
        records regarding Participants' Accounts;

                      (c) To compute and certify to the Employer the amount and
        kinds of payments to Participants or their Beneficiaries, and to
        determine the time and manner in which such payments are to be paid;

                      (d) To authorize all disbursements by the Employer
        pursuant to this Plan;

                      (e) To maintain (or cause to be maintained) all the
        necessary records for administration of this Plan;

                      (f) To make and publish such rules for the regulation of
        this Plan as are not inconsistent with the terms hereof;

                      (g) To delegate to other individuals or entities from time
        to time the performance of any of its duties or responsibilities
        hereunder;

                                       25
<PAGE>   29

                      (h) To establish or to change the phantom investment
        options or arrangements under Article IV;

                      (i) To hire agents, accountants, actuaries, consultants
        and legal counsel to assist in operating and administering the Plan; and

                      (j) Notwithstanding any other provision of this Plan, the
        Plan Administrator may take any action it deems appropriate in
        furtherance of any policy of the Company respecting insider trading as
        may be in effect from time to time. Such actions may include, but are
        not limited to, altering the effective date of allocations or
        distributions of Accounts or Deferral Subaccounts.

The Plan Administrator has the exclusive and discretionary authority to construe
and to interpret the Plan, to decide all questions of eligibility for benefits,
to determine the amount and manner of payment of such benefits and to make any
determinations that are contemplated by (or permissible under) the terms of this
Plan, and its decisions on such matters will be final and conclusive on all
parties. Any such decision or determination shall be made in the absolute and
unrestricted discretion of the Plan Administrator, even if (A) such discretion
is not expressly granted by the Plan provisions in question, or (B) a
determination is not expressly called for by the Plan provisions in question,
and even though other Plan provisions expressly grant discretion or call for a
determination. As a result, benefits under this Plan will be paid only if the
Plan Administrator decides in its discretion that the applicant is entitled to
them. In the event of a review by a court, arbitrator or any other tribunal, any
exercise of the Plan Administrator's discretionary authority shall not be
disturbed unless it is clearly shown to be arbitrary and capricious.

                5.4 Compensation, Indemnity and Liability. The Plan
Administrator will serve without bond and without compensation for services
hereunder. All expenses of the Plan and the Plan Administrator will be paid by
the Employer. To the extent deemed appropriate by the Plan Administrator, any
such expense may be charged against specific Participant Accounts, thereby
reducing the obligation of the Employer. No member of the Committee, and no
individual acting as the delegate of the Committee, shall be liable for any act
or omission of any other member or individual, nor for any act or omission on
his or her own part, excepting his or her own willful Misconduct. The Employer
will indemnify and hold harmless each member of the Committee and any employee
of PBG (or a PBG affiliate, if recognized as an affiliate for this purpose by
the Plan Administrator) acting as the delegate of the Committee against any and
all expenses and liabilities, including reasonable legal fees and expenses,
arising out of his or her membership on the Committee (or his or her serving as
the delegate of the Committee), excepting only expenses and liabilities arising
out of his or her own willful Misconduct.

                5.5 Taxes. If the whole or any part of any Participant's Account
becomes liable for the payment of any estate, inheritance, income, employment,
or other tax which the

                                       26
<PAGE>   30

Employer may be required to pay or withhold, the Employer will have the full
power and authority to withhold and pay such tax out of any moneys or other
property in its hand for the account of the Participant. To the extent
practicable, the Employer will provide the Participant notice of such
withholding. Prior to making any payment, the Employer may require such releases
or other documents from any lawful taxing authority as it shall deem necessary.

                                       27
<PAGE>   31

                                   ARTICLE VI

                                CLAIMS PROCEDURE

                6.1 Claims for Benefits. If a Participant, Beneficiary or other
person (hereafter, "Claimant") does not receive timely payment of any benefits
which he or she believes are due and payable under the Plan, he or she may make
a claim for benefits to the Plan Administrator. The claim for benefits must be
in writing and addressed to the Plan Administrator or to the Company. If the
claim for benefits is denied, the Plan Administrator will notify the Claimant in
writing within 90 days after the Plan Administrator initially received the
benefit claim. However, if special circumstances require an extension of time
for processing the claim, the Plan Administrator will furnish notice of the
extension to the Claimant prior to the termination of the initial 90-day period
and such extension may not exceed one additional, consecutive 90-day period. Any
notice of a denial of benefits should advise the Claimant of the basis for the
denial, any additional material or information necessary for the Claimant to
perfect his or her claim, and the steps which the Claimant must take to have his
or her claim for benefits reviewed.

                6.2 Appeals. Each Claimant whose claim for benefits has been
denied may file a written request for a review of his or her claim by the Plan
Administrator. The request for review must be filed by the Claimant within 60
days after he or she received the written notice denying his or her claim. The
decision of the Plan Administrator will be made within 60 days after receipt of
a request for review and will be communicated in writing to the Claimant. Such
written notice shall set forth the basis for the Plan Administrator's decision.
If there are special circumstances which require an extension of time for
completing the review, the Plan Administrator's decision may be rendered not
later than 120 days after receipt of a request for review.

                                       28
<PAGE>   32

                                   ARTICLE VII

                            AMENDMENT AND TERMINATION

                7.1 Amendments. The Compensation and Management Development
Committee of the Board of Directors of the Company, or its delegate, has the
right in its sole discretion to amend this Plan in whole or in part at any time
and in any manner, including the manner of making deferral elections, the terms
on which distributions are made, and the form and timing of distributions.
However, except for mere clarifying amendments necessary to avoid an
inappropriate windfall, no Plan amendment shall reduce the amount credited to
the Account of any Participant as of the date such amendment is adopted. Any
amendment shall be in writing and adopted by the Committee or an officer of the
Company who is authorized by the Committee for this purpose. All Participants
and Beneficiaries shall be bound by such amendment.

                7.2 Termination of Plan. The Company expects to continue this
Plan, but does not obligate itself to do so. The Company, acting by the
Compensation and Management Development Committee of its Board of Directors (or
its delegate), reserves the right to discontinue and terminate the Plan at any
time, in whole or in part, for any reason (including a change, or an impending
change, in the tax laws of the United States or any State). Termination of the
Plan will be binding on all Participants (and a partial termination shall be
binding upon all affected Participants), but in no event may such termination
reduce the amounts credited at that time to any Participant's Account. If this
Plan is terminated (in whole or in part), amounts theretofore credited to
affected Participants' Accounts may either be paid in a lump sum immediately, or
distributed in some other manner consistent with this Plan, as determined by the
Plan Administrator in its sole discretion.

                                       29
<PAGE>   33

                                  ARTICLE VIII

                                  MISCELLANEOUS

                8.1 Limitation on Participant's Rights. Participation in this
Plan does not give any Participant the right to be retained in the Employer's or
Company's employ (or any right or interest in this Plan or any assets of the
Company or Employer other than as herein provided). The Company and Employer
reserve the right to terminate the employment of any Participant without any
liability for any claim against the Company or Employer under this Plan, except
for a claim for payment of deferrals as provided herein.

                8.2 Unfunded Obligation of Individual Employer. The benefits
provided by this Plan are unfunded. All amounts payable under this Plan to
Participants are paid from the general assets of the Participant's individual
Employer. Nothing contained in this Plan requires the Company or Employer to set
aside or hold in trust any amounts or assets for the purpose of paying benefits
to Participants. Neither a Participant, Beneficiary, nor any other person shall
have any property interest, legal or equitable, in any specific Employer asset.
This Plan creates only a contractual obligation on the part of a Participant's
individual Employer, and the Participant has the status of a general unsecured
creditor of this Employer with respect to amounts of compensation deferred
hereunder. Such a Participant shall not have any preference or priority over,
the rights of any other unsecured general creditor of the Employer. No other
Employer guarantees or shares such obligation, and no other Employer shall have
any liability to the Participant or his or her Beneficiary. In the event, a
Participant transfers from the employment of one Employer to another, the former
Employer shall transfer the liability for deferrals made while the Participant
was employed by that Employer to the new Employer (and the books of both
Employers shall be adjusted appropriately).

                8.3 Other Plans. This Plan shall not affect the right of any
eligible Executive or Participant to participate in and receive benefits under
and in accordance with the provisions of any other employee benefit plans which
are now or hereafter maintained by any Employer, unless the terms of such other
employee benefit plan or plans specifically provide otherwise or it would cause
such other plan to violate a requirement for tax favored treatment.

                8.4 Receipt or Release. Any payment to a Participant in
accordance with the provisions of this Plan shall, to the extent thereof, be in
full satisfaction of all claims against the Plan Administrator, the Employer and
the Company, and the Plan Administrator may require such Participant, as a
condition precedent to such payment, to execute a receipt and release to such
effect.

                8.5 Governing Law. This Plan shall be construed, administered,
and governed in all respects in accordance with applicable federal law and, to
the extent not preempted by

                                       30
<PAGE>   34

federal law, in accordance with the laws of the State of New York. If any
provisions of this instrument shall be held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining provisions hereof shall continue
to be fully effective.

                8.6 Adoption of Plan by Related Employers. The Plan
Administrator may select as an Employer any division of the Company, as well as
any corporation related to the Company by stock ownership, and permit or cause
such division or corporation to adopt the Plan. The selection by the Plan
Administrator shall govern the effective date of the adoption of the Plan by
such related Employer. The requirements for Plan adoption are entirely within
the discretion of the Plan Administrator and, in any case where the status of an
entity as an Employer is at issue, the determination of the Plan Administrator
shall be absolutely conclusive.

                8.7 Gender, Tense and Examples. In this Plan, whenever the
context so indicates, the singular or plural number and the masculine, feminine,
or neuter gender shall be deemed to include the other. Whenever an example is
provided or the text uses the term "including" followed by a specific item or
items, or there is a passage having a similar effect, such passage of the Plan
shall be construed as if the phrase "without limitation" followed such example
or term (or otherwise applied to such passage in a manner that avoids limitation
on its breadth of application).

                8.8 Successors and Assigns; Nonalienation of Benefits. This Plan
inures to the benefit of and is binding upon the parties hereto and their
successors, heirs and assigns; provided, however, that the amounts credited to
the Account of a Participant are not (except as provided in Section 5.5) subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any right to
any benefits payable hereunder, including, without limitation, any assignment or
alienation in connection with a separation, divorce, child support or similar
arrangement, will be null and void and not binding on the Plan or the Company or
Employer. Notwithstanding the foregoing, the Plan Administrator reserves the
right to make payments in accordance with a divorce decree, judgment or other
court order as and when cash payments are made in accordance with the terms of
this Plan from the Deferral Subaccount of a Participant. Any such payment shall
be charged against and reduce the Participant's Account.

                8.9 Facility of Payment. Whenever, in the Plan Administrator's
opinion, a Participant or Beneficiary entitled to receive any payment hereunder
is under a legal disability or is incapacitated in any way so as to be unable to
manage his or her financial affairs, the Plan Administrator may direct the
Employer to make payments to such person or to the legal representative of such
person for his or her benefit, or to apply the payment for the benefit of such
person in such manner as the Plan Administrator considers advisable. Any payment
in accordance with the provisions of this section shall be a complete discharge

                                       31
<PAGE>   35

of any liability for the making of such payment to the Participant or
Beneficiary under the Plan.

                8.10 Separate Plans. This Plan document encompasses two separate
plans of deferred compensation for all legal purposes (including ERISA, federal
tax law, and state tax law) as set forth in subsections (a) and (b) below.

                      (a) The portion of the Plan that provides for deferrals of
        Base Compensation, Bonus Compensation and Performance Unit Payouts
        (which shall be known as the "PBG Executive Income Deferral Plan").

                      (b) The portion of the Plan that provides for deferrals of
        Stock Option Gains (which shall be known as the "PBG Option Gains
        Deferral Plan").

Together, these two separate plans of deferred compensation are referred to as
the PBG Executive Income Deferral Program, and are severable for any and all
purposes as directed by the Company. (However, see Section B.6(a) of Article B
which also provides for a separate plan.)

                                       32
<PAGE>   36

        The above restated Plan is hereby adopted and approved by the Company's
duly authorized officer to be effective as stated herein.

                  THE PEPSI BOTTLING GROUP, INC.

                  Submitted by:
                                        ---------------------------------------
                                        Mr. David Kasiarz
                                        Vice President, Compensation & Benefits

                  Consented to by:
                                        ---------------------------------------
                                        Ms. Pamela McGuire
                                        Senior Vice President, General Counsel
                                        & Secretary

                  Executed by:
                                        ---------------------------------------
                                        Mr. Kevin Cox
                                        Senior Vice President & Chief Personnel
                                        Officer

                                       33
<PAGE>   37

                      PBG EXECUTIVE INCOME DEFERRAL PROGRAM

                                    APPENDIX

        The following Appendix articles modify and supplement the general terms
of the Plan as it applies to certain executives as provided therein.

                                       34

<PAGE>   38
                                  ARTICLE A

                        INITIAL PUBLIC OFFERING OF PBG

         This Article sets forth provisions that apply in connection with the
Company's initial public offering.  Except as specifically modified in this
Appendix Article A, the foregoing provisions of the Plan shall fully apply.
In the event of a conflict between this Article A and the foregoing provisions
of the Plan, this Article A shall govern with respect to the conflict.

         A.1  Definitions:  When used in this Article, the following
underlined terms shall have the meanings set forth below.  Except as otherwise
provided in this Article, all terms that are defined in Article II of the Plan
shall have the meaning assigned to them by Article II.

                  (a) Employee Programs Agreement:  The 1999 Employee Programs
     Agreement between PepsiCo and PBG.

                  (b) Offering Date:  The "Offering Date" as that term is
     defined in the 1999 Separation Agreement between PepsiCo and PBG.

                  (c) PepsiCo:  PepsiCo, Inc., a North Carolina Corporation.

                  (d) PepsiCo Group:  PepsiCo and its subsidiaries and
     affiliates, as determined by the Plan Administrator.

                  (e) Transferred Individual: A nonterminated "Transferred
     Individual" as that term is defined in the Employee Programs Agreement.
     For this purpose, a Transferred Individual shall be considered
     "nonterminated" if he or she is actively employed by (or on a leave of
     absence from and expected to return to) the Company and any of its
     affiliates, as of the end of the day on the Offering Date.

                  (f) Transition Individuals:  A "Transition Individual" as
     that term is defined in the Employee Programs Agreement.

         A.2 Assumption of Benefits and Liabilities. Effective as of the
beginning of the day on the Start Date, all interests in the Prior Plan of
(and Prior Plan liabilities with respect to) Transferred Individuals shall be
assumed by this Plan.

                  (a) In the case of a Transferred Individual, effective as of
         the beginning of the day on the Start Date, his or her Account shall
         be credited with the amount that stood to his or her credit under the
         Prior Plan immediately prior to the

                                      35

<PAGE>   39

         Start Date. The allocation of this amount to phantom investment
         options under this Plan shall mirror the allocation then in effect
         for the Transferred Individual under the Prior Plan (except to the
         extent the Plan Administrator permits, and an authorized Executive
         makes, an investment change at a special Valuation Date offered to
         such Executive in connection with PBG's initial public offering).

                 (b) Any deferral election made under the Prior Plan for a
         Transferred Individual shall be carried over and continued under this
         Plan, subject to the provisions of this Plan (as interpreted by the
         Plan Administrator). Notwithstanding the prior sentence, following
         the Start Date, to the extent permitted by the Plan Administrator, a
         Transferred Individual may revise any Prior Plan deferral election
         during the period before the deadline for making such election has
         been reached.

                 (c) A Transferred Individual who has made a deferral election
         with respect to a performance unit award payable to him under the
         PepsiCo Long Term Incentive Plan shall, once the deferral occurs, be
         credited with such deferral solely under this Plan. Any designation
         to have some or all of this deferral invested in the PepsiCo capital
         stock account under the Prior Plan shall be converted to a
         designation for investment in a phantom investment option under this
         Plan (other than the Phantom PepsiCo Stock Account) which is
         designated by the Plan Administrator for this purpose.

         A.3 Special PepsiCo Stock Investment Option.  As of the Start Date,
the Plan Administrator shall establish a temporary phantom investment option
under the Plan, the Phantom PepsiCo Stock Account.  In no event will shares of
PepsiCo capital stock actually be purchased or held under this Plan, and no
Participant shall have any rights as a shareholder of PepsiCo capital stock on
account of an interest in the Phantom PepsiCo Stock Account.

                  (a) General Principles: The Phantom PepsiCo Stock Account
         shall be administered under rules that are similar to those
         applicable to the Phantom PBG Stock Account, but with such
         modifications as the Plan Administrator may apply from time to time.

                  (b) Valuation and Adjustment: A Participant's interest in
         the Phantom PepsiCo Stock Account is valued as of a Valuation Date by
         multiplying the number of phantom shares credited to his or her
         Account on such date by the fair market value of a share of PepsiCo
         capital stock on such date, and then adding the value of the
         Participant's dividend subaccount. If shares of PepsiCo capital stock
         change by reason of any stock split, stock dividend,
         recapitalization, merger, consolidation, spin-off, combination or
         exchange of shares, complete or partial liquidation or other
         corporate change treated as subject to this provision by the Plan
         Administrator, such

                                      36

<PAGE>   40

         equitable adjustment shall be made in the number and kind of phantom
         shares credited to an Account or subaccount as the Plan Administrator
         may determine to be necessary or appropriate.

                  (c) Investment Allocations and Reallocations. No deferrals
         after the Start Date may be directed for investment in the Phantom
         PepsiCo Stock Account, except for a deferral of a Transferred
         Individual's 1999 base salary that he or she directed for investment
         in the Phantom PepsiCo Stock Account prior to the Start Date. In
         accordance with Section 4.1(d), a Participant with an interest in the
         Phantom PepsiCo Stock Account may reallocate amounts from his or her
         Subaccounts in the Phantom PepsiCo Stock Account to other phantom
         investment options under the Plan that are available for this purpose
         (e.g., in the case of Stock Option Gains, no other phantom options
         are available for this purpose). No Participant may reallocate
         amounts into the Phantom PepsiCo Stock Account.

                  (d) Termination of the Phantom PepsiCo Stock Account.
         Effective as of the end of the day on December 31, 2000 (the
         "effective time"), the Phantom PepsiCo Stock Account shall cease to
         be available under the Plan. Unless a Participant selects another
         phantom investment option prior to the effective time, in accordance
         with such requirements as the Plan Administrator may implement, the
         Participant's phantom investment in the Phantom PepsiCo Stock Account
         shall be transferred and converted by the Plan Administrator into an
         investment in the Phantom Security Plus Fund as of the effective
         time. Notwithstanding the prior sentence, any Stock Option Gains that
         are invested in the Phantom PepsiCo Stock Account shall be
         automatically transferred and converted by the Plan Administrator
         into an investment in the Phantom PBG Stock Account as of the
         effective time.

         A.4 Employment Transfers by Transition Individuals.  This section
shall apply to individuals who transfer between PBG and PepsiCo under
circumstances that cause them to be Transition Individuals.

                  (a) Transfers to PepsiCo. If a Participant, who is a
         Transition Individual, is transferred to the PepsiCo Group, such
         transfer to the PepsiCo Group shall not be considered a Termination
         of Employment or other event that could trigger distribution of the
         Participant's interest in the Plan. In this case, the Participant's
         interest in the Plan (and all Plan liabilities with respect to the
         Participant) may be retained by the Plan, or they may be transferred
         to the PepsiCo Executive Income Deferral Program as determined by the
         Plan Administrator in its discretion. If a transfer of the
         Participant's interest occurs, this transfer shall constitute a
         complete payout of the Participant's Account for purposes of
         determining who is a Participant or Beneficiary under the Plan. If a
         transfer does not occur, for purposes of determining the distribution
         of such Participant's interest in the Plan, the Participant's

                                      37

<PAGE>   41

         Termination of Employment shall not be deemed to occur before his or
         her termination of employment with the PepsiCo Group.

                  (b) Transfers from PepsiCo. If an individual is transferred
         by the PepsiCo Group to an Employer under circumstances that cause
         him to be a Transition Individual and such individual's interest in
         the PepsiCo Executive Income Deferral Program is transferred to this
         Plan, such Transition Individual shall become a Participant in this
         Plan. In connection with any such transfer of the individual's
         interest, the individual's phantom investment in PepsiCo capital
         stock under the PepsiCo Executive Income Deferral Program shall be
         carried over and replicated hereunder until December 31, 2000 (except
         to the extent the Plan Administrator permits, and an authorized
         Executive makes, an investment change at a special Valuation Date
         offered to such Executive in connection with the transfer). Any other
         phantom investment of the individual under the PepsiCo Executive
         Income Deferral Program may be carried over and replicated hereunder,
         or it may be converted to a phantom investment available under the
         Plan (depending upon the procedures then applied by the Plan
         Administrator). In determining the time of payout of a Transition
         Individual who has an interest transferred to this Plan, the
         elections of the Participant under the PepsiCo Executive Income
         Deferral Program shall be given effect, subject to this Plan's
         provisions on payouts (as interpreted by the Plan Administrator).

                                      38

<PAGE>   42

                                  ARTICLE B

             SUPPLEMENTAL EXECUTIVE INCENTIVE COMPENSATION AWARDS

         Effective as of December 21, 1999, this Article B sets forth
provisions that apply in connection with cash and stock awards that have been
granted to certain executives under the 1999 Executive Incentive Compensation
Plan. Except as specifically modified in this Appendix Article B, the
foregoing provisions of the Plan shall fully apply. In the event of a conflict
between this Article B and the foregoing provisions of the Plan, this Article
B shall govern with respect to the conflict.

          B.1  Definitions:  When used in this Article B, the following
underlined terms shall have the meanings set forth below.  Except as otherwise
provided in this Article B, all terms that are defined in Article II of the
Plan shall have the meaning assigned to them by Article II.

                  (a) PBG Group: The group of corporations or other entities
     comprised of (i) PBG and all of its divisions, subsidiaries and
     affiliates, (ii) PepsiCo, and (iii) such other corporations and entities
     as the Plan Administrator designates from time to time.

                  (b)  Cash Award:  The Supplemental Executive Incentive
     Compensation award that PBG granted in cash to certain executives under
     the 1999 Executive Incentive Compensation Plan.

                  (c) Change of Control: A Change of Control occurs on a date
     when (1) any individual, corporation, partnership, group, associate or
     other entity, other than PepsiCo, is or becomes the "beneficial owner"
     (as defined in Rule 13D-3 under the Securities Exchange Act of 1934),
     directly or indirectly, of 50% or more of the combined voting power of
     PBG's outstanding securities ordinarily having the right to vote at
     elections of directors, (2) any individual, corporation, partnership,
     group, associate or other entity is or becomes the "beneficial owner" (as
     defined in Rule 13D-3 under the Securities Exchange Act of 1934),
     directly or indirectly, of 50% or more of the combined voting power of
     PepsiCo's outstanding securities ordinarily having the right to vote at
     elections of directors, (3) the approval by the shareholders of PBG of a
     plan or agreement providing for a merger or consolidation of PBG, other
     than with PepsiCo, or for a sale, exchange or other disposition of all or
     substantially all of the assets of PBG, or (4) the approval by the
     shareholders of PepsiCo of a plan or agreement providing for a merger or
     consolidation of PepsiCo, other than with PBG, or for a sale, exchange or
     other disposition of all or substantially all of the assets of PepsiCo.

                                      39

<PAGE>   43

                  (d) Employee: Any person who received a Cash Award or Stock
     Award under the Trust Agreement and is currently rendering services to a
     member of the PBG Group.

                  (e) Extension Form:  The form prescribed by the Plan
     Administrator on which an Employee extends the Vesting Date of his or her
     Stock Award pursuant to the provisions of this Article B.

                  (f) PepsiCo:  PepsiCo, Inc., a North Carolina corporation,
     and any successor or successors thereto.

                  (g) Stock Award: The Supplemental Executive Incentive
     Compensation award that PBG granted to certain executives under the 1999
     Executive Incentive Compensation Plan that is invested and payable in PBG
     Common Stock. If an Employee completes an Extension Form pursuant to
     Section B.3 below and elects a Vesting Date to apply to the award, each
     portion of the award that has a different Vesting Date (whether future or
     current) shall be considered to be a separate Stock Award hereunder.

                  (h) Trust Agreement:  The Trust Agreement (including any and
     all appendices), by and between PBG and Boston Safe Deposit and Trust
     Company, as amended and restated from time to time.

                  (i) Vesting Date:  The date on which a Stock Award will no
     longer be subject to a risk of forfeiture as provided in the Trust
     Agreement or Section B.4, whichever applies.

         B.2 Deferral of Cash Awards and Stock Awards.

                  (a) An Employee's Cash Award shall be deferred under this
     Plan pursuant to the terms and conditions of the Trust Agreement and
     shall become vested and distributed to the Employee or his or her
     beneficiary in the amount and at the time as provided by the Trust
     Agreement.

                  (b) Prior to February 1, 2003, an Employee's Stock Award
     shall be deferred under this Plan pursuant to the terms and conditions of
     the Trust Agreement and, unless the Vesting Date is extended pursuant to
     this Article B, the Stock Award shall become vested and distributed to
     the Employee or his or her beneficiary in the amount and form and at the
     time as provided by the Trust Agreement. If the Employee extends the
     Vesting Date of the Stock Award pursuant to this Article B (so that the
     Vesting Date extends beyond February 1, 2003), such extension shall be
     governed by the terms and conditions of this Article B. Except as
     specifically

                                      40

<PAGE>   44

     modified in this Article B, the provisions of the Trust Agreement shall
     fully apply. In the event of a conflict between this Article B and the
     provisions of the Trust Agreement, this Article B shall govern with
     respect to the conflict.

         B.3 Extension of Vesting for Stock Awards.

                  (a) Manner of Election. Each Employee with a Stock Award may
     elect to extend the vesting under the Plan of his or her Stock Award by
     completing and filing with the Plan Administrator an Extension Form for
     such purpose. Such Extension Form must be completed in the manner and
     within the time limits prescribed by this Article B and the Plan
     Administrator from time to time. The Extension Form shall permit the
     Employee to elect a delayed Vesting Date to apply to all or only a
     portion of the Stock Award. To be effective, an Employee's Extension Form
     must set forth the Vesting Date that will be applicable to the Stock
     Award, the Employee's Beneficiary designation and any other information
     that may be requested by the Plan Administrator from time to time. In
     addition, the Extension Form must meet the requirements of Sections
     B.3(b) and (c) below. If permitted by the Plan Administrator, an Employee
     may select a different Beneficiary for his or her Stock Awards than the
     Beneficiary selected for his or her Deferral Subaccounts.

                  (b) Timing of Election. If an Employee desires to extend the
     vesting and receipt of his or her Stock Award beyond February 1, 2003, an
     Employee must initially so elect by completing and filing an Extension
     Form with the Plan Administrator by July 31, 2002. Subsequent vesting
     extensions (if any) of a Stock Award must be made by an Employee at least
     6 months prior to the then applicable Vesting Date or, if earlier, in the
     calendar year preceding the calendar year of the then applicable Vesting
     Date. If an Employee fails to file a properly completed and executed
     Extension Form with the Plan Administrator by the prescribed time, he or
     she will be deemed to have elected not to extend the vesting and receipt
     of his or her Stock Award. An Extension Form is irrevocable once received
     and determined by the Plan Administrator to be properly completed, and
     changes or modifications thereafter shall not be permitted.
     Notwithstanding the preceding, to the extent necessary because of
     circumstances beyond the control of the Employee, the Plan Administrator
     may grant a delay of any extension period and may permit (to the extent
     deemed necessary for orderly Plan administration or to avoid undue
     hardship to an Employee) the complete revocation of an Extension Form.
     Any such delay or revocation shall be available only if the Plan
     Administrator determines that it shall not trigger constructive receipt
     of income (or other early taxation of income) and that it is desirable
     for Plan administration, and only upon such conditions as may be required
     by the Plan Administrator.

                                      41

<PAGE>   45

                  (c) Period of Extension. An Employee shall specify a Vesting
     Date on his or her Extension Form by designating a specific date from the
     choices that are then made available to the Employee by the Plan
     Administrator. Notwithstanding an Employee's actual election, an Employee
     shall be deemed to have elected a Vesting Date that is not less than 24
     months from the previous Vesting Date, but no later than September 30,
     2009. In addition, notwithstanding an Employee's actual election, if an
     Employee selects a Vesting Date that is later than September 30, 2009, an
     Employee shall be deemed to have elected a Vesting Date of September 30,
     2009.

         B.4 Forfeiture.  An Employee's interest in a Stock Award shall be
terminated and the Stock Award shall be forfeited in the event that the
Employee's employment is terminated with the PBG Group and such termination is
voluntary or on account of his or her Misconduct prior to the date the Stock
Award vests in accordance with Section B.5(a) below.

         B.5 Vesting and Distribution.

                  (a) Vesting. A Stock Award shall become fully vested (and
     shall cease to be subject to forfeiture) on the earliest of the following
     to occur:

                           (1) When the Employee reaches the Vesting Date
         applicable to the Stock Award while employed by a member of the PBG
         Group or while on an approved leave of absence (as determined by the
         Plan Administrator);

                           (2) When the Employee terminates employment,
         voluntarily or involuntarily, from any and all members of the PBG
         Group on account of the Employee's death or Disability;

                           (3) When the Employee is involuntarily terminated
         from the PBG Group following a Change of Control (regardless of
         whether such termination is on account of Misconduct), unless it is
         determined otherwise by a majority of the "Outside Directors" (within
         the meaning of Code section 162(m)) serving on the PBG Board of
         Directors on December 23, 1999 (the "Incumbent Outside Directors") or
         subsequently elected to the PBG Board of Directors by a vote of at
         least three-fourths of the directors constituting the Incumbent
         Outside Directors;

                           (4) When the Employee is involuntarily terminated
         from the PBG Group and such involuntary termination is not on account
         of Misconduct; or

                           (5) September 30, 2009.

                                      42

<PAGE>   46

                  (b)  Distribution.

                           (1) Once an Employee's Stock Award becomes fully
         vested as provided in Section B.5(a) above, the Stock Award, in the
         amount and form determined pursuant to the Trust Agreement, shall be
         distributed in a lump sum to the Employee or his or her Beneficiary
         as soon as practicable after the first Distribution Date coincident
         with or next following the full vesting of such Stock Award as
         provided in Section B.5(a) above.

                           (2) In the case of a Participant who is determined
         by the Plan Administrator to be subject to Section 16 of the
         Securities Exchange Act of 1934, as amended (the "Act"), a
         distribution required under paragraph (1) above may be delayed to the
         extent the Plan Administrator deems it necessary to satisfy Rule
         16b-3 promulgated under the Act. This paragraph shall apply
         notwithstanding any provision of this Article B to the contrary.

         B.6  General Provisions.

                  (a) This Article B (which together with the corresponding
     provisions of the Trust Agreement shall be known as the "PBG SEIC
     Deferral Plan") shall encompass a plan of deferred compensation that is
     separate and distinct from the PBG Executive Income Deferral Plan and the
     PBG Option Gains Deferral Plan (as defined in Section 8.10) for all legal
     purposes (including ERISA, federal tax law and state tax law). Together,
     these three plans of deferred compensation shall be referred to as the
     PBG Executive Income Deferral Program, and all three such plans are
     severable for any and all purposes as directed by the Company.
     Additionally, Cash Awards may only be deferred for a maximum time period
     of 27 months and Stock Awards may only be deferred for a maximum time
     period of ten years. Therefore, since the Cash Awards and Stock Awards do
     not provide retirement income to the Employees and do not result in a
     deferral of income by Employees for periods extending to the termination
     of their covered employment or beyond, the PBG SEIC Deferral Plan is not
     subject to ERISA.

                  (b) In addition to those Plan provisions which may be in
     conflict with this Article B (and therefore the provisions of this
     Article B governs pursuant to the first paragraph of this Article B),
     Section 4.2, Section 4.5, Section 4.6, Section 8.2 and Article VI of this
     Plan shall neither apply to this Article B nor to any Cash Award or Stock
     Award.

                                      43

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