Document:

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                                    AGREEMENT

                  License Agreement entered into as of the 17th day of March,
2000 (the "Effective Date") by and between International Sports Wagering Inc., a
corporation organized under the laws of the State of Delaware, having its
principal place of business at 201 Lower Notch Road, Little Falls, New Jersey
07424 ("Licensor") and Global Interactive Gaming, Inc., a corporation organized
under the laws of the State of Delaware ("Licensee").

                                  ARTICLE ONE

                             BACKGROUND OF AGREEMENT

                  A. Licensor is the owner of certain patents and technical
information relating to wagering and contests on sporting events.

                  B. Licensor is making certain modifications to its "Licensed
Technology" (as defined herein ) to meet specifications agreed to by Licensor
and Licensee and set forth in the "Functional Requirements" (as defined herein).

                  C. Licensee wishes to acquire a License to use the Licensed
Technology as it is modified to meet such specifications.

                  D. Contemporaneous with the execution of this Agreement the
parties and/or certain of their Affiliates are entering into another license
agreement covering a different territory, a Warrant Agreement, two Escrow
Agreements and an amendment to certain Non-Disclosure Agreements.

                                   ARTICLE TWO

                                   DEFINITIONS

                  Section 2.1. Definitions.

                  "Affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with a specified person; provided, however, that except for
purposes of Section 3.7, with respect to Prisma Sports & Media AG and Prisma
iVentures AG, such term shall include only such persons controlled by Prisma
Sports & Media AG and Prisma iVentures AG. For purposes hereof, the term
"control" (including the correlative terms "controlled by" and "under common
control voting" means the power to vote a majority of the voting rights or to
appoint a majority of the directors of any person.

                  "Designated Locations" means the offices or facilities of
Licensee at which Licensee's computer servers are located on the Effective Date
or at any time during the Term as to which Licensor is notified in writing by
Licensee from time to time.

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                  "Documentation" means the materials listed on Exhibit A that
Licensor previously provided to Licensee, that describe generally the
functionality of the Licensed Software as it exists on the Effective Date and
which is in use in the State of Nevada, and such other materials prepared by
Licensor from time to time in accordance with the requirements of this
Agreement.

                  "Field of Use" means all business activities in which the
Licensed Technology is legally useable, other than Lotteries and transactions or
business activities involving the trading of stocks, bonds, options to acquire
or sell stock, warrants, commodities, currency, derivative securities and
similar instruments over the Internet or through a stock or other exchange or
quotation system.

                  "Government Regulatory Requirements" means any United States
or foreign federal, state, municipal or local law, rule, regulation, ordinance,
order or other requirement relating to the Licensed Technology or the licensing
thereof by Licensor or the use thereof by Licensee, one of its Affiliates or
other permitted user thereof.

                  "Gross Profit" when used in connection with (a) advertising,
merchandising and other activities related to (but not including) Transactions
using, or Wagering uses or applications of, the Licensed Technology, means the
gross revenue relating thereto less the direct expenses specifically related
thereto (such as credit card fees), without deduction for any operating expenses
related thereto, and (b) games, contests and other competitions other than
Wagering, means the gross revenue relating thereto (including, but not limited
to, subscription fees paid by users of any service relating to such games,
contests and other competitions), less the direct expenses specifically related
thereto (such as prizes, license fees to teams, leagues and/or broadcasters and
credit card fees), without deduction for any operating expenses related thereto;
provided that any fees paid to Licensee's Affiliates shall not be subtracted
from gross revenue in order to determine Gross Profit.

                  "Handle" means the total amount Wagered by players by means of
the Licensed Technology and/or through the System employing the Licensed
Technology, in whole or in part, without deduction for any payments or expenses
other than credit card fees.

                  "Hold" means the Handle minus the amount paid out to winners
of Wagers that have been decided at the time of computation of the Hold, but
without deduction for any other payments or expenses other than credit card
fees.

                  "Improvement" means any modification of, or Enhancement to,
the Licensed Technology conceived by Licensor or Licensee during the Term, which
is useable by Licensee in the Field of Use.

                  "Licensed Software" means the software described in Exhibit C
attached hereto in Object Code form including all modifications, Improvements
and Enhancements thereto in accordance with this Agreement in order to provide
the functionality in substantially the form described in Exhibit C.

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                  "Licensed Technology" means the Patents, Technical Information
and Licensed Software.

                  "Lotteries" means games of chance in which (i) players select
or are given entries from among a series of choices and (ii) winners or winning
entries are selected at random or on a basis that cannot be controlled by the
players.

                  "NDA" means those certain Non-Disclosure Agreements by and
between each of Prisma Sports & Media AG and En Passant Ltd., and Licensor dated
September 30, 1999, as the same may be amended or modified from time to time.

                  "Object Code" means a form of software code resulting from the
translation or processing of a computer program in Source Code form by a
computer into machine language or intermediate code, which thus is in a form
that would not be convenient to human understanding of the program logic, but
which is appropriate for execution or interpretation by a computer and has been
compiled using a known, commercially available and current (but not necessarily
the latest) version program.

                  "Patents" means the United States and foreign patents and
applications owned by Licensor and listed or described on Schedule 1 hereto
which are applicable to the Licensed Technology and any patents issued during
the Term pursuant to such patent applications, and all continuations,
continuations-in-part, divisions, reissues, and re-examinations thereof that are
applicable to the Licensed Technology.

                  "Products" means the Licensed Software and the Documentation
provided to Licensee by Licensor pursuant to this Agreement.

                  "Project" means certain modifications to the Licensed
Technology that are required in order to meet the Functional Requirements and
the Milestones (as defined herein).

                  "Proprietary and Confidential Information" means (a) the
Licensed Technology and any and all elements thereof, and (b) all other
information relating to Licensor's or Licensee's business or affairs, including,
but not limited to, technical or nontechnical data, formulae, tools, patterns,
plans, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, lists of actual or potential customers, players or
suppliers, marketing plans and business strategies; provided that, Proprietary
and Confidential Information shall not include information that the receiving
party can demonstrate (i) is or has become generally available to the public
other than as a result of unauthorized disclosure by the receiving party or
persons to whom the receiving party has made such information available; (ii)
was available to the receiving party on a non-confidential basis prior to
receipt thereof from the disclosing party as evidenced by written or other
tangible documentation or other evidence in receiving party's files prior to the
Effective Date, or is received thereafter by the receiving party from a third
party lawfully entitled to such information without continuing restrictions on
the use thereof; (iii) is required to be disclosed pursuant to a requirement of
a court or government agency or in connection with judicial or governmental
proceedings; provided, however, that, prior to any disclosure pursuant to this
clause (iii), the party required to disclose the information shall have given
notice to the other party of any proposed disclosure and given the other party a

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reasonable opportunity to interpose an objection or obtain a protective order,
requiring that the Proprietary and Confidential Information to be disclosed be
used only for the purposes for which the order was issued, or in connection with
such judicial proceedings, as applicable, or (iv) is approved for release or
disclosure in writing without restriction by disclosing party's authorized
representative.

                  "Software Defect" means a defect in the Licensed Software
which renders the System on which the Licensed Software is being utilized, or
the Licensed Software, unusable in a live environment for the acceptance and
processing of Wagers or other Transactions.

                  "Source Code" means native language program that will be
compiled or assembled by a commercially available and current (but not
necessarily the latest) version program and, to the extent that the following
documentation is in existence as of the Effective Date and as such documentation
may be changed to reflect the modifications, Enhancements and Improvements
required by the Project: system level documentation, including definitions,
screen layouts, naming conventions, database layouts, libraries, flow charts,
algorithms, processes, methodologies, logic diagrams, formulas and other related
materials that are necessary to provide sufficient information to enable a
skilled programmer/analyst to understand the program logic and perform
maintenance and make enhancements to the program.

                  "System" and "System Environment" means the hardware and
operating system software selected by Licensee after consultation with Licensor,
as the same may be modified from time to time as necessary to meet the
Functional Requirements.

                  "Technical Information" means know-how, trade secrets, and
technical data not commonly known and used relating to the Licensed Technology
and the System or System Environment, that is required or useful in order to use
the Licensed Technology, and which Technical Information is in the possession of
Licensor on the Effective Date and any time thereafter.

                  "Territory" means the United States and its territories,
except that Licensor reserves the right for itself and its licensees to use the
Licensed Technology for Wagering solely within the State of Nevada in such
manner as to prohibit any access from any jurisdiction outside the State of
Nevada.

                  "Transactions" means any transactions, other than Wagers, for
which Licensee is using the Licensed Technology or for which the Licensed
Technology is useable.

                  "Wagers" (including the correlative terms Wagering, Wagered,
and the like) means all transactions considered to be wagers by the Governmental
Regulatory Requirement of any relevant jurisdiction, other than Lotteries.

                  "Warrant Agreement" means that certain Warrant Agreement dated
as of the date hereof issued by Licensor to Licensee or any of Licensee's
Affiliates.

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                  Section 2.2. Additional Definitions.

                  In addition to the foregoing defined terms, the following
terms are defined in the section listed opposite such term:

                  Defined Term                            Section Reference
                  ------------                            -----------------
                  "AAA"                                   15.19
                  "Acceptance"                            4.4
                  "Acceptance Notice"                     4.4
                  "Acceptance Testing"                    4.4
                  "Bankruptcy"                            7.2(b)(iii)
                  "Bonus"                                 5.10
                  "Carry Forward Amount"                  5.4
                  "Concept Notice"                        4.3
                  "Concept Testing"                       4.3
                  "Default"                               7.2(b)
                  "Deliverables"                          4.2
                  "Early Deliverables"                    5.10
                  "Effective Date"                        Introductory Paragraph
                  "Enhancements"                          4.10
                  "Escrow Agent"                          5.6
                  "Escrow Agreement"                      5.6
                  "Escrow Account"                        5.6
                  "First Year Minimum"                    5.2(a)
                  "FOURS Software"                        4.8
                  "Functional Requirements"               4.2
                  "Future Minimum"                        5.2(c)
                  "Indemnified Claim"                     11.3
                  "Indemnified Party"                     11.3
                  "Indemnifying Party"                    11.3
                  "Infringement Claim"                    11.1
                  "License"                               3.1(a)
                  "Licensee"                              Introductory Paragraph
                  "Licensor"                              Introductory Paragraph
                  "Milestones"                            4.2
                  "Minimum"                               5.2(c)
                  "Percentage Fee"                        5.3
                  "PRMs"                                  4.6
                  "Second Year Minimum"                   5.2(b)
                  "Selling Shareholders                   2.1
                  "Software Escrow Agent"                 Article 13
                  "Software Warranty Services"            10.1
                  "Taxes"                                 5.8
                  "Term"                                  7.1
                  "Testing"                               4.2
                  "Warranty Period"                       8.6

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                                  ARTICLE THREE

                                GRANT OF LICENSE

                  Section 3.1. Scope of License.

                  (a) Licensor hereby grants to Licensee, subject to the terms
and conditions of this Agreement, an exclusive license (the "License") to use
the Licensed Technology, in the Field of Use, within the Territory and at the
Designated Locations.

                  (b) The Licensee shall not, directly or indirectly, use the
Licensed Technology to accept Wagers from any person known to Licensee after
reasonable inquiry to be located in any jurisdiction from which, to the best of
Licensee's knowledge after reasonable inquiry, it is illegal to do so or in any
other way that, to the best of Licensee's knowledge after reasonable inquiry, is
not permitted by the laws of any relevant jurisdiction. As used herein
"reasonable inquiry" means Licensee's reasonable efforts consistent with
standards prevailing in the industry and the then currently available
technologies, to determine the location of a person placing a Wager.

                  (c) Use of the Licensed Software shall consist of either
copying any portion of the software programs from storage units or media into a
central processing unit, or the processing of data with the programs, or both.

                  (d) Except as otherwise specifically permitted herein,
Licensee shall not sell, assign, distribute, provide, license, sub-license,
lease, sublease, or grant any right to use, or otherwise transfer the Licensed
Technology or the Products, directly or indirectly, to or through third parties,
other than to players or other persons intending to make or place Wagers or
other Transactions legally through means of the Licensed Technology and/or the
Licensee's System, utilizing the Licensed Software.

                  (e) During the Term, Licensor covenants and agrees to pay all
filing and maintenance fees relating to the Patents in the jurisdictions set
forth on Schedule 1 hereto. Licensor shall, upon the written request of
Licensee, file and use commercially reasonable efforts to prosecute the Patents
in any jurisdictions not set forth on Schedule 1, as Licensor may be so
requested by Licensee, provided that Licensee agrees to pay all reasonable
out-of-pocket expenses in connection therewith, including but not limited to,
filing fees, legal and other fees of prosecuting the Patents and, if any such
Patents are issued, all maintenance fees related thereto.

                  Section 3.2. Copying Rights.

                  Licensee may copy, duplicate or reproduce the Products and the
Technical Information as many times as the Licensee, in its reasonable
discretion, deems necessary, consistent with reasonable business requirements,
in its use of the Licensed Technology, including for backup, test, archival or
disaster recovery purposes. Any copy which Licensee makes of the Products or
Technical Information, in whole or in part, is, and shall remain, the property
of Licensor. Licensee shall reproduce and include in their entirety and without
alteration, Licensor's patent numbers, copyright, trademark and other
proprietary rights notices on any copy of any Product or Technical Information,
in the manner designated by Licensor from time to time by notice to Licensee.

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                  Section 3.3. Reservation of Rights.

                  The Products and Licensed Technology are the sole and
exclusive property of Licensor. Licensor reserves all rights not expressly
granted pursuant to this Agreement, including without limitation, all rights to
derivative works (as defined under any relevant intellectual property law) in
and to the Products and Licensed Technology. This Agreement is not a sale of the
Products or Licensed Technology or any copy or part thereof, and Licensee shall
have no title to or ownership interest in the Products or Licensed Technology,
or any copies or part thereof, regardless of the form in which the original and
any copies may exist. Licensee acknowledges that the Products are protected by
patent, trademark and copyright law, including international treaties, and other
laws protecting intellectual property.

                  Section 3.4. Prohibited Actions by Licensee.

                  Licensee shall not (i) decompile, disassemble,
reverse-assemble, analyze or otherwise examine the Licensed Technology for
reverse engineering thereof or any similar purpose, (ii) copy or otherwise
duplicate the Licensed Technology except as permitted in this Agreement, or
(iii) modify the Licensed Technology in any manner except as specifically
permitted by Licensor. Any modification of the Licensed Technology by any person
other than Licensor, or otherwise approved by Licensor, shall immediately
terminate any warranty issued by Licensor with respect to the Licensed
Technology.

                  Section 3.5. Confidentiality.

                  (a) Each party hereto acknowledges that the Proprietary and
Confidential Information of the other party or its Affiliates constitutes
valuable assets and trade secrets of the other party and its Affiliates, has not
been published and is protected by civil and criminal law and that the use and
disclosure thereof must be carefully and continuously controlled. Accordingly,
during the Term of this Agreement and at all times thereafter, each party agrees
that:

                      (i) it will hold the other party's Proprietary and
Confidential Information in strict confidence and will use commercially
reasonable efforts to protect such Proprietary and Confidential Information from
any use, reproduction, publication, disclosure, or distribution except as
specifically authorized by this Agreement;

                      (ii) it will not, and will cause its directors and
officers, and will use it best efforts to cause its employees not to, sell,
lease, sublease, license, sublicense, assign, transfer, distribute, disclose or
grant any right to use or otherwise make available any Proprietary and
Confidential Information of the other party, or the benefit thereof, to others,
except as authorized by the terms and conditions of this Agreement. Each party
will also use commercially reasonable efforts to cause its agents and
representatives not to, sell, lease, sublease, license, sublicense, assign,
transfer, distribute, disclose or grant any right to use or otherwise make
available any of the other party's Proprietary and Confidential Information, or
the benefit thereof, to others, except as authorized by the terms and conditions
of this Agreement;

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                      (iii) it will not remove or permit to be removed from any
item embodying the other party's Proprietary and Confidential Information any
notice placed thereon indicating the confidential nature and/or the proprietary
right of the other party in such items;

                      (iv) it will honor, reproduce and include the patent,
trademark and copyright notices and other proprietary notices (in the form
reasonably specified by the party which owns such patents, trademarks and
copyrights) on all copies, in any form, including partial copies and excerpts,
of the Proprietary and Confidential Information of the other party;

                      (v) it will (A) limit access to the other party's
Proprietary and Confidential Information to those of its directors, officers,
employees, agents, representatives, consultants and, it the case of Licensee,
its sublicensees in connection with their employment or sublicense, who have a
need to use the Proprietary and Confidential Information for the purposes
intended under this Agreement in connection with their employment, (B) prohibit
access to the other party's Proprietary and Confidential Information by any
third party without the prior written consent of the party owning such
information and (C) require the foregoing persons to execute nondisclosure
agreements to the same effect as this Section 3.5 in all material respects; and

                      (vi) in the event the other party becomes aware that any
person or entity (including, but not limited to, any of its employees) is
taking, threatens to take or has taken any action which would violate any of the
foregoing provisions were that person or entity a party to this Agreement, such
party shall promptly and fully advise the other party (with written confirmation
as soon as practicable thereafter) of all facts known to such party concerning
such action or threatened action. Neither party shall in any way aid, abet or
encourage any such action or threatened action. Each party shall use
commercially reasonable efforts to prevent such action or threatened action,
including, but not limited to, assigning any cause of action it may have related
to the violation of the foregoing provisions to the other party, and each party
shall do all reasonable things and to cooperate in all reasonable ways in this
regard as may be requested by the other party. Should either party request the
assistance of the other party regarding a violation of this Section 3.5 by
someone other than an employee or agent of such party, the other party shall
reimburse the party making such request for its reasonable expenses in
connection with such assistance.

                  (b) Each party's commercially reasonable efforts and
obligations as provided in this Section 3.5 shall mean employing procedures with
respect to the Proprietary and Confidential Information which are no less
restrictive than the strictest procedures established or employed by that party
to protect its own Proprietary and Confidential Information.

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                  Section 3.6. Responsibility for Consultants and Sublicensees;
 Patent Assignment Agreements.

                  Each party shall be responsible for the activities of the
consultants retained by such party in connection with the performance of this
Agreement and, in the case of Licensee, its sublicensees, in the event that any
such consultants or sublicensees violate the terms of the non-disclosure
agreements contemplated by Section 3.5(a)(v) or any other provision of this
Agreement. Licensor agrees to cause its officers, employees and consultants to
sign agreements by which such officers, employees and consultants agree, among
other things, to assign to Licensor any inventions conceived in connection with
their employment or retention by Licensor, which agreements shall be in
substantially the form heretofore provided to Licensee.

                  Section 3.7. Sublicensing Rights.

                  Licensee shall have the right to sublicense the Licensed
Technology to any person or entity in the Territory, subject to the following
conditions:

                  (a) If such sublicense is to an Affiliate of Licensee, the
fees payable to Licensor by Licensee (calculated on a Percentage Fee basis)
shall be equal to the fees payable to Licensor (calculated on a Percentage Fee
basis) had the sublicense not been granted and the activity for which the
sublicense was granted had been conducted directly by the Licensee.

                  (b) If such sublicense is to a non-Affiliate of Licensee, the
fees payable to Licensor by Licensee (calculated on a Percentage Fee basis)
shall be no less that 85% of the fees payable to Licensor (calculated on a
Percentage Fee basis) had the sublicense not been granted and the activity for
which the sublicense was granted had been conducted directly by the Licensee.

                  (c) All such sublicenses shall contain provisions relating to
inspection of records and audit rights substantially the same in all material
respects as those contained in Article Six hereof; such sublicenses shall not be
assignable or further sublicensable without the prior written consent of
Licensor; and such sublicenses shall be specifically subject to the provisions
of this License Agreement.

                  (d) Copies of all such sublicenses shall be provided to
Licensor promptly after execution thereof; in the event that a sublicense
contains terms and conditions that are not related to the subject matter of this
License, such provisions may be redacted prior to giving copies thereof to
Licensor.

                  (e) All sublicenses shall contain provisions similar in all
material respects to those contained in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 6.1,
6.2, 10.3, 11.2, 12.1, 12.2, and shall be specifically subject to the terms of
this Agreement.

                  (f) At Licensor's request, Licensee shall, at Licensee's sole
cost and expense, use commercially reasonable efforts to enforce the provisions
referred to in clause (e) above of all sublicenses.

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                  Section 3.8. Use of SportXction Mark.

                  At the request of Licensee, Licensor shall grant to Licensee
without payment of any additional fee, the right to use the mark "SportXction"
in connection with the use of the Licensed Technology.

                                  ARTICLE FOUR

                   EMPLOYMENT AGREEMENTS; PRODUCT DEVELOPMENT;
                             PROJECT REVIEW MEETINGS

                  Section 4.1. Employment Agreements.

                  Upon execution of this Agreement, Barry Mindes and Bernard
Albanese shall have executed employment agreements with Licensor which
employment agreements shall (a) be for a term ending no sooner than the
scheduled date for delivery of the last Milestone set forth in Exhibit D, (b)
contain provisions prohibiting Mr. Mindes and Mr. Albanese from competing with
the business of Licensor and Licensee during the term of their respective
employment agreements and until the later to occur of three years from the
Effective Date or one year following the termination or nonrenewal of such
employment agreement and (c) such other provisions as the parties thereto may
agree.

                  Section 4.2. Project Development.

                  The Project Functional Requirements ("Functional
Requirements") attached hereto as Exhibit C describe criteria, characteristics
and specifications of performance which the Licensee and the Licensor have
negotiated and to which the Licensee and Licensor have agreed relating to the
Licensed Software. The Deliverable Milestones ("Milestones") attached hereto as
Exhibit D contain the estimated dates, which Licensee and Licensor have
negotiated and to which Licensee and Licensor have agreed, by which the
deliverables described therein ("Deliverables") are to be delivered. Licensor
shall use all resources reasonably required to meet each of the agreed upon
Milestones described in Exhibit D. After delivery of Deliverables required for
each Milestone, the Deliverables shall be installed and subjected to Concept
Testing, Acceptance Testing and Beta Testing (collectively "Testing") as
hereinafter described. The time required for installation and Testing of the
Deliverables and training and support by Licensor is not included in the
estimated delivery dates set forth on Exhibit D. The period of time during which
Licensor is involved in such installation, Testing, training and support shall
be added to the time period allowed for completing any Milestone.

                  Section 4.3. Proof of Concept.

                  Upon modification of the existing Licensed Software in order
to meet the Functional Requirements in accordance with each of the Milestones,
the Licensed Software as so modified will be subjected to proof of concept
testing ("Concept Testing") in accordance with a System Concept Protocol to be
mutually agreed upon by the parties. Licensor shall give notice to Licensee (the
"Concept Notice") advising Licensee of the date Licensor and Licensee jointly
shall perform Concept Testing thereof, at Licensor's facility, in order for
Licensee, in the exercise of its reasonable judgment, to determine whether or
not such Licensed Software, as modified, meets the Functional Requirements

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required by the applicable Milestone in all material respects. Licensee shall
have its representatives present at Licensor's facility to observe such Concept
Testing. If the Licensed Software, as modified, fails to pass the Concept
Testing, Licensor shall further modify such Licensed Software so that it meets
the Functional Requirements required by the applicable Milestone in all material
respects and passes the Concept Testing. In the event that Licensee believes
that the Licensed Software does not pass the Concept Testing because it does not
meet the Functional Requirements required by any Milestone, Licensee shall
within five (5) days after such Concept Testing give written notice to Licensor
describing in reasonable detail the reasons why the Functional Requirements of
the applicable Milestone have not been met. Licensor shall repeat the foregoing
process until the modifications to the Licensed Software pass the Concept
Testing. Upon passing the Concept Testing, Licensee and Licensor shall each sign
a document stating that the Concept Testing has been passed.

                  Section 4.4. Acceptance Testing.

                  Upon passing the Concept Testing referred to in Section 4.3,
Licensor shall send that number of the members of Licensor's technical staff as
Licensor and Licensee shall mutually agree, to the facility designated by
Licensee for the purpose of installing the applicable Licensed Software on the
System provided by Licensee. Prior to installation of the Licensed Software,
Licensee shall demonstrate to Licensor's reasonable satisfaction that all
equipment, communications, interfaces, facilities and other necessary System
adjuncts provided by Licensee are properly sized, installed, configured and
operating. Licensor shall install the Licensed Software on the System and System
Environment provided by Licensee. After installation of the applicable Licensed
Software, the Licensed Software will be subjected to acceptance testing
("Acceptance Testing") in accordance with a System Acceptance Protocol to be
mutually agreed upon by the parties. Licensor shall give notice to Licensee (the
"Acceptance Notice") advising Licensee that the System is ready for Licensee to
perform Acceptance Testing thereof in order for Licensee, in the exercise of its
reasonable judgment, to determine whether or not such Licensed Software, as
installed into the full System and System Environment with interfaces to third
party applications and other software systems as set forth in the Functional
Requirements and accessible by Licensee's end users, meets the Functional
Requirements required by the applicable Milestone in all material respects.
Representatives of the Licensee shall be present to observe such Acceptance
Testing. If the Licensed Software, as installed into the full System and System
Environment as provided above, fails to pass the Acceptance Testing, Licensor
shall further modify such Licensed Software so that it meets the Functional
Requirements required by the applicable Milestone in all material respects and
passes the Acceptance Testing. In the event that Licensee believes that the
Licensed Software does not pass the Acceptance Testing because it does not meet
the Functional Requirements required by any Milestone, Licensee shall within
five (5) days after such Acceptance Testing give written notice to Licensor
describing in reasonable detail the reasons why the Functional Requirements of
the applicable Milestone have not been met. Licensor shall repeat the foregoing
process until the modifications to the Licensed Software pass the Acceptance
Tests. The Licensed Software, as so modified, shall be deemed to be accepted in
connection with each Milestone (each, an "Acceptance") when Licensee, in good
faith and in its reasonable judgment, applying general computer software
industry standards, determines that the Functional Requirements required by the
applicable Milestone have been proven in all material respects. Upon passing the
Acceptance Testing, Licensee and Licensor shall each sign a document stating
that the Acceptance Testing has been passed. Any use of the Licensed Software by

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Licensee for any commercial purpose other than testing shall be deemed to be
Acceptance.

                  Section 4.5. Beta Testing.

                  Upon passing the Acceptance Testing referred to in Section
4.4, Licensee shall, at its sole cost and expense, perform all such Beta Testing
and provide Licensor with all data reflecting the results thereof. At least ten
(10) days prior to commencement of Beta Testing, Licensee shall give written
notice to Licensor of the date on which such Beta Testing shall begin. Licensor
may have its representatives present at Licensee's facility to observe the
conduct of the Beta Tests. If in the course of such Beta Testing, "bugs" or
other problems with the Licensed Software appear, Licensee shall give notice to
Licensor and Licensor shall remedy such bugs or other problems in the following
manner: (a) if the bug or problem is a recurring problem but is not reproducible
by Licensee, Licensor shall render reasonable assistance to Licensee in locating
it; (b) if the bug or problem is a Software Defect that is recurring and is
reproducible, Licensor shall, as promptly as is practicable, (i) determine the
cause of the Software Defect, (ii) develop the means for curing such Software
Defect and (iii) implement the cure, and (c) if the bug or problem does not
impede use of the Licensed Software in a material manner, Licensee and Licensor
shall mutually determine in their good faith judgment, applying computer
software industry standards, whether Licensor shall correct the bug or problem,
(i) in the manner as set forth in clause (b) above or (ii) in a subsequent
release of the Licensed Software.

                  Section 4.6. Project Review Meetings.

                  Licensor shall conduct Project Review Meetings ("PRMs") at
Licensor's headquarters with Licensee and its representatives at least monthly.
At each PRM, there will be detailed reviews of process, issues, scheduling and
Deliverables or system components. In the event that any material Deliverables
set forth in the applicable Milestone have not been delivered in all material
respects, Licensor will consult with the Licensee in order to establish means of
achievement of the Milestone. If, not less than 90 days after the Milestone,
such Deliverable has not been delivered, Licensee may, at Licensee's sole cost
and expense, retain a consultant, reasonably acceptable to Licensor, to assist
Licensor in preparing the Deliverables so that they may meet the applicable
Functional Requirement in all material respects. In connection with assistance
provided by any consultant retained by Licensee as herein provided, Licensor
agrees to make available to such consultant, for use only at Licensor's
facility, the Source Code for the portion of the Licensed Technology with
respect to which such consultant is rendering assistance, provided that such
consultant signs a confidentiality agreement to the same effect as provided in
Section 3.5 hereof. Licensor further agrees to cooperate with and provide
reasonable assistance to such consultant to the extent necessary in preparing
the Deliverables so that they may meet the applicable Functional Requirement in
all material respects.

                                       12

<PAGE>

                  Section 4.7. Consultation.

                  Upon request of Licensee, Licensor will advise and consult
with Licensee on matters relating to the use of the Licensed Software for
Wagering, Transactions, contests and competitions involving sports.

                  Section 4.8. FOURS Software.

                  Not less than 90 days prior to the date scheduled for delivery
of the modifications to the Licensed Software described in Milestone C, Licensee
shall give written notice to Licensor advising Licensor whether or not Licensee
intends to use the Licensed Software as proposed to be modified with respect to
Wagering on FOURS ("FOURS Software"). If Licensee advises Licensor that Licensee
intends to use the FOURS Software, Licensor shall use commercially reasonable
efforts to modify the Licensed Software to meet the applicable Milestone for
Wagering on FOURS. If Licensor develops the FOURS Software at the request of
Licensee as aforesaid, Licensor shall be entitled to the Percentage Fee relating
to FOURS, whether or not Licensee uses the FOURS Software alone, in combination
with any other Software, or does not use the FOURS Software developed by
Licensor. If Licensee advises Licensor that Licensee will not use the FOURS
Software developed by Licensor, Licensor shall be relieved of any obligations to
develop the FOURS Software, without any reduction in any of the Fees payable to
Licensor hereunder. If Licensee does not so advise Licensor that Licensee
intends to use the FOURS Software, then Licensor shall be under no obligation to
modify the Licensed Software to meet the applicable Milestone for Wagering on
FOURS and Licensee shall be under no obligation to pay any fees to Licensor with
respect to Wagering on FOURS, provided that no portion of the Licensed
Technology is used in connection with Wagering or other Transactions relating to
FOURS.

                  Section 4.9. Training and Documentation.

                  (a) Licensor shall provide training and support services to
Licensee at the time, place and in the manner mutually agreed by the parties.

                  (b) Licensor shall provide to Licensee the Documentation and
any changes thereto prepared in order to reflect the modifications, Enhancements
and Improvements required by the Project including but not limited to user level
documentation that contains sufficient definitions, user instructions, screen
layouts, functional descriptions of the Licensed Software, operating
instructions and examples of common business solutions to enable a user to use
the program for its intended purposes.

                  Section 4.10. Enhancements.

                  Upon the request of Licensee, Licensor shall use commercially
reasonable efforts, consistent with its other business commitments and
consistent with the efficient and expeditious consummation of the Project, to
design, develop and provide enhancements to the Licensed Software in addition to
the Milestones set forth in the Functional Requirements ("Enhancements"),
provided that the design and development of such Enhancements do not
unreasonably interfere with Licensor's ability to meet the Milestones and if
requested, install such Enhancements on the Licensee's operating system, at a

                                       13

<PAGE>

fee of $150 per man hour during the first year after the Effective Date, which
hourly rate may be increased by Licensor annually thereafter to no more than
105% of the hourly rate existing during the prior year, plus reasonable travel,
living and communications expenses if Licensor's employees or representatives
are requested to be present at any facility of Licensee. All such Enhancements
shall remain the property of Licensor but shall be deemed Licensed Software
hereunder. The Licensee acknowledges that development of any such Enhancements
are likely to adversely impact the estimated delivery dates set forth in the
Milestones. If Licensor is unable or unwilling to design, develop or provide
such Enhancements, Licensee may, at Licensee's sole cost and expense, engage a
consultant to do so and Licensor agrees to render reasonable assistance to such
consultant in connection therewith, provided that such activities do not
unreasonably interfere with Licensor's ability to meet the Milestones.

                                  ARTICLE FIVE

                                     PAYMENT

                  Section 5.1. General.

                  In consideration for the grant of the License with respect to
the Licensed Technology, Licensee shall pay to Licensor the greater of the
Minimum or the Percentage Fees, each as described below:

                  Section 5.2. Minimum.

                  (a) For the period from the Effective Date through February
15, 2001, Licensee shall pay to Licensor at the rate of $3 million per annum
(the "First Year Minimum"), payable as follows: (i) $500,000 for the period from
the Effective Date through May 15, 2000 plus $750,000 for the three-months
commencing May 16, 2000, and (ii) $750,000 for each of the three-month periods
commencing on August 16 and November 16, 2000, in the manner provided in
Sections 5.5 and 5.6.

                  (b) For the 12-month period from February 16, 2001 through
February 15, 2002, the Licensee shall pay to Licensor a minimum of $5,000,000
(the "Second Year Minimum") payable at the rate of $1,250,000 on the 16th day of
February, May, August and November, 2001, in the manner provided in Sections 5.5
and 5.6.

                  (c) For the 12-month period commencing on February 16, 2002,
and each 12-month period thereafter during the Term, the annual minimum ("Future
Minimum") shall increase to 120% of the Minimum that was paid or payable to
Licensor during the prior 12-month period. (For example, the Minimum for the
12-month period from February 16, 2002 through February 15, 2003 shall be
$6,000,000 (120% of $5,000,000), and the Minimum for the 12-month period
beginning February 16, 2003 and ending February 15, 2004 shall be $7,200,000,
and so on, throughout the Term unless and until this Agreement is terminated as
herein provided). (The First Year Minimum, Second Year Minimum and Future
Minimums are collectively referred to as the "Minimums" and individually
sometimes referred to as a "Minimum"). Each Minimum shall be paid to Licensor at
the rate of one-quarter of the total amount of such Minimum on the 16th day of

                                       14

<PAGE>

February, May, August and November of each calendar year in the manner provided
in Sections 5.5 and 5.6.

                  Section 5.3. Percentage Fee.

                  Licensee shall pay to Licensor the aggregate percentage fee
calculated as set forth in Sections 5.3(a), (b), (c) and (d) (collectively the
"Percentage Fee") described below, to the extent that for each three-month
period commencing on and after February 16, 2001, the Percentage Fee calculated
on a cumulative basis, reduced by the amount that the Carry Forward Amount, if
any, exceeds the Minimum paid or payable for the relevant three-month period.
The Percentage Fee, if any, shall be paid to Licensor on the tenth business day
following the end of each calendar quarter, with respect to the calendar quarter
immediately preceding the date such payment is due.

                  (a) Percentage Fee - Wagering (other than FOURS). With respect
to all revenue generated by or for the benefit of Licensee, any of its
Affiliates or any of its sublicensees, directly or indirectly, from Wagering
activities utilizing the Licensed Technology, in whole or in part, other than
Wagering on FOURS as described below, the Percentage Fee shall be the lesser of
(i) 25% of the Hold, or (ii) 1% of the Handle.

                  (b) Percentage Fee - Wagering on FOURS. With respect to all
revenue generated by or for the benefit of Licensee, any of its Affiliates or
any of its sublicensees, directly or indirectly, from Wagering relating to
FOURS, utilizing the Licensed Technology, in whole or in part, the Percentage
Fee shall be the lesser of (i) 17 1/2% of the Hold or (ii) 0.7% of the Handle;
provided, however, that (except as provided in Section 4.8) in the event that
the Licensed Technology is not used in whole or in part in connection with
Wagering on FOURS, Licensor shall not be entitled to receive a Percentage Fee
with respect thereto.

                  (c) Percentage Fee - Non-Wagering. With respect to all revenue
generated by or for the benefit of Licensee, any of its Affiliates or any of its
sublicensees, directly or indirectly, from (i) games, contests or other
competitions (including, but not limited to, FOURS) not involving Wagering and
(ii) subscription fees paid by users or players, in each case, utilizing the
Licensed Technology, in whole or in part, the Percentage Fee shall be 25% of the
Gross Profit related thereto; provided, however, that in the event that the
Licensed Technology is not used in whole or in part in connection with any of
the revenue generating activities set forth in clause (i), (ii) and (iii) above,
Licensor shall not be entitled to receive a Percentage Fee with respect thereto.

                  (d) Percentage Fee - Advertising, Merchandising and the like.
With respect to all revenue from advertising and merchandising and all other
revenue related to Wagering, including Wagering on FOURS, and/or non-Wagering
activities (but not including revenue generated as described in subclauses (a),
(b) and (c) of this Section 5.3) generated by or for the benefit of Licensee,
any of its Affiliates or any of its sublicensees, directly or indirectly,
through the use of the Licensed Technology, in whole or in part, the Percentage
Fee shall be 25% of the Gross Profit related thereto.

                                       15

<PAGE>

                  Section 5.4. Credit for Minimum.

                  For each 12-month period commencing after February 15, 2001
that the Licensee is not required to pay a Percentage Fee because the Percentage
Fee as calculated in Sections 5.3(a), (b), (c) and (d) above is not in excess of
the Minimum for that 12-month period, the Licensee shall be permitted to carry
forward the difference between the Minimum and the Percentage Fee (the "Carry
Forward Amount"). The Carry Forward Amount may be used by Licensee to reduce
future Percentage Fees that are payable to Licensor hereunder, provided that in
no event shall Licensor be paid less than (i) the relevant Minimum with respect
to any 12-month period or (ii) the relevant portion of the Minimum payable with
respect to any three-month period within any 12-month period.

                  Section 5.5. Initial Payment.

                  On the Effective Date, Licensee shall pay to Licensor
$1,250,000, which amount covers the period from the Effective Date through
August 15, 2000.

                  Section 5.6. Escrow.

                  Licensee has deposited with Citibank N.A., New York, New York
(the "Escrow Agent") into an escrow account (the "Escrow Account"), the Minimum
fee for the 12-month period commencing on August 16, 2000 and ending August 15,
2001. The Agreement among the parties and Citibank N.A. by which the Escrow
Account was set up is referred to as the "Escrow Agreement." Commencing on
August 16, 2000 and the 16th day of November, February and May thereafter during
the Term, (a) the portion of Minimum fee for the forthcoming three-month period
shall be paid to Licensor, without any requirement for notice to Licensee, out
of the Escrow Account in accordance with the terms of Section 5.2 of this
Agreement and the Escrow Agreement, and (b) the Licensee shall deposit into the
Escrow Account an amount equal to the portion of Minimum fee for the quarter
commencing one year after the date such deposit into the Escrow Account is to be
made, such that the Escrow Account shall always contain the Minimum fee due to
Licensor for the ensuing 12-month period. The parties shall cause the escrow
agent to invest the funds held in escrow as mutually agreed. All interest earned
on the amount in escrow, after payment of the fees of the escrow agent, shall be
paid to Licensee. Licensee shall continue to deposit sums into the Escrow
Account in accordance with Section 5.2 and the Escrow Agreement, unless (i)
Licensor is subject to Bankruptcy, (ii) Licensee has been issued an arbitral
award stating that Licensor is in Default as provided in Section 7.2, or (iii)
this Agreement has been terminated as herein provided.

                  Section 5.7. Immediately Available Funds.

                  All payments made to Licensor by Licensee or the escrow agent,
or by Licensee into the Escrow Account, shall be wire transferred in U.S.
dollars, in immediately available funds, to an account designated by Licensor,
or the escrow agent, as the case may be.

                                       16

<PAGE>

                  Section 5.8. Taxes.

                  Licensee shall be responsible for payment of all franchise,
sales, use, property, excise, value-added, or other federal, state, municipal or
local taxes (other than gaming taxes) imposed by or pursuant to, any
Governmental Regulatory Requirements, relating to the Licensed Technology, the
System and/or the License, or use thereof or the activities contemplated by this
Agreement ("Taxes") except for (i) Taxes based solely on Licensor's net income
and (ii) any Taxes directly related to Wagering. Licensor and Licensee shall
each pay their proportionate share of any Taxes directly related to Wagering and
any gaming Taxes, calculated in the manner described set forth on Exhibit E. If
Licensor is required to pay any Taxes based upon the License granted hereunder
or on Licensee's use of the Licensed Technology, Documentation, hereunder or
otherwise (in each case, other than its proportionate share of Taxes calculated
as set forth on Exhibit E hereto), then the amount of such Taxes shall be billed
to and paid by Licensee. If Licensee is required by law to withhold from any
amount owed or payable to Licensor, Licensee shall withhold any amount required
to be withheld and shall pay such amount to the applicable tax authority when
due and provide Licensor with an original receipt or other reasonable evidence
from such tax authority for the amount so withheld and paid.

                  Section 5.9. Interest Charge.

                  Any payments due under this Agreement which are not paid when
due shall accrue interest at a rate of 12% per annum until such payments have
been made.

                  Section 5.10. Bonus.

                  In the event that the Deliverables that are required to meet
Milestone A have passed the required Concept Testing and Acceptance Testing
prior to the date specified in Exhibit D therefor (such Deliverables, the "Early
Deliverables"), Licensee shall pay Licensor a bonus (the "Bonus") calculated in
the following manner. For each day prior to the Milestone A delivery date
specified in Exhibit D that Licensor provides the Early Deliverables, Licensee
shall pay to Licensor $5,000, up to a maximum of $600,000. Fifty percent (50%)
of any such Bonus shall be paid to by Licensee to Licensor promptly after it is
determined that it is due and payable in accordance herewith and fifty percent
(50%) shall be paid 9 months thereafter.

                                  ARTICLE SIX

                        INSPECTION; RECORDS; AUDIT RIGHTS

                  Section 6.1. Inspection.

                  Licensor shall have the right to inspect any of Licensee's or
any sublicensees premises, including without limitation, the Designated
Locations, upon reasonable notice given and during normal business hours, to
verify that the Licensed Technology is being used and protected as specified
herein; provided that any such inspection shall not unreasonably disrupt any of
Licensee's business activities; and provided further that any inspection of a
sublicensee's premises shall be conducted through the Licensee (with Licensor's
representatives having the right to participate in such inspection), all
communications with such sublicensee shall be exclusively through the Licensee
and Licensor shall have no direct communication with any such sublicensee.

                                       17

<PAGE>

                  Section 6.2. Royalty Reports.

                  (a) Commencing on the 25th day of May, 2001 and on the 25th
day of July, November and February thereafter during the Term (i) Licensee
shall, and shall contractually require all sublicensees to, furnish to Licensor,
with respect to the three-month period immediately prior to the date of the
statement, and for the 12-month period or portion thereof in question, on a
cumulative basis, a written statement (certified by the Chief Financial Officer
of Licensee or such sublicensee), in such form and with such detail as Licensor
may reasonably require, setting forth (i) the Handle, Hold, Gross Profit
generated during such quarter, as a result of the use of the System and/or and
the Licensed Technology, or any part thereof, (ii) the calculation of, and
method of calculating, the Percentage Fees and (iii) such other information
relating to the computation of the fees owed to Licensor under this Agreement as
Licensor may reasonably request from time to time. All such statements shall to
the extent practicable be generated directly by the System or using the Licensed
Software.

                  (b) Licensee shall, and shall contractually require all of its
sublicensees to, keep accurate written records of all activities relating to the
Handle, Hold, Gross Profit and calculation of the Percentage Fees. Such records
shall be retained by Licensee or its sublicensees during the Term and for a
period of at least two (2) years thereafter. Upon reasonable notice and during
regular business hours, Licensee shall, and it shall contractually require its
sublicensees to, make available such records for audit by Licensor or its
representatives to verify the accuracy of the statements provided to Licensor;
provided that any audit of a sublicensee shall be conducted through the
Licensee, all communications with such sublicensee shall be exclusively through
the Licensee and Licensor shall have no direct communication with any such
sublicensee unless Licensee fails to fulfill the requirements of Section 3.7(f).
In the event it is determined that the fees paid to Licensor hereunder were less
than the fees to which Licensor was entitled as provided herein, Licensee shall
immediately pay such fees plus interest as provided in Section 5.9, and Licensee
shall pay all reasonable, out-of-pocket expenses of Licensor or its
representatives relating to such audit, including, but not limited to the
reasonable, out-of-pocket expenses of traveling to Licensee's or its
sublicensees' facilities or otherwise, and reasonable, out-of-pocket living
expenses while at Licensee's or its sublicensees' facility. In the event that,
more than twice during the Term, it is determined that the fees paid to Licensor
hereunder were less than 90% of the fees to which the Licensor was entitled in
accordance with the terms of this Agreement, Licensee shall be deemed to be in
material breach of this Agreement and Licensor, in addition to any other rights
or remedies to which it is entitled, shall have the right to terminate this
Agreement forthwith.

                                  ARTICLE SEVEN

                          TERM AND TERMINATION; DEFAULT

                  Section 7.1. Term.

                  This Agreement shall commence on the Effective Date and shall
terminate upon expiration of the last to expire of the Patents (the "Term").
Upon the expiration of the Term of this Agreement in accordance with this
Section 7.1, Licensee shall hold a fully paid up exclusive license to the
Licensed Technology in the Territory, in the Field of Use.

                                       18

<PAGE>

                  Section 7.2. Termination Events.

                  (a) Mutual Consent. This Agreement may be terminated at any
time by mutual consent of the parties.

                  (b) Default. This Agreement may be terminated by either party
upon written notice of termination for Default by the other party. A party shall
be deemed to be in "Default" of this Agreement if: -------

                      (i) in the case of Licensee, Licensee fails to make any
                  payment to Licensor or into the Escrow Account, required by
                  this Agreement when due, and such failure remains unremedied
                  for a period of thirty (30) business days after written notice
                  thereof is given by Licensor to Licensee; provided that if
                  more than two payments required to be made by Licensee to
                  Licensor hereunder during any year during the Term are not
                  made when due, thereafter the notice period required by this
                  Section 7.2(b)(i) shall be reduced to five (5) days;

                      (ii) except as provided in Section 7.2(c), such party has
                  breached or otherwise failed to observe a material obligation
                  imposed upon such party by this Agreement which if curable,
                  has not been cured within thirty (30) days after written
                  notice thereof has been given by the other party, unless such
                  breach is not susceptible of being cured within thirty (30)
                  days and such party has taken steps to cure such breach and is
                  using diligent efforts to cure such breach, provided that in
                  any event such breach has been cured within ninety (90) days
                  after notice of such breach is given by the other party; or

                      (iii) such party shall have been subject to "Bankruptcy"
                  which shall mean, (A) the entry of a decree or order for
                  relief of such party by a court of competent jurisdiction in
                  any involuntary case involving such party under any
                  bankruptcy, insolvency, or other similar law now or hereafter
                  in effect; (B) the appointment of a receiver, liquidator,
                  assignee, custodian, trustee, sequestrator, or other similar
                  agent for such party; (C) the filing with respect to such
                  party of a petition in any such involuntary bankruptcy case,
                  which petition remains undismissed for a period of 90 days or
                  which is dismissed or suspended pursuant to Section 305 of the
                  U.S. Bankruptcy Code (or any corresponding or comparable
                  provision of any foreign, future federal or state bankruptcy
                  or insolvency law); or (D) the commencement by such party of a
                  voluntary case under any bankruptcy, insolvency, or other
                  similar law now or hereafter in effect.

                  (c) Failure to Meet Milestones. In the event that Licensor has
not provided a Deliverable by the date which is 90 days after the Milestone date
for such Deliverable, Licensee may give notice to Licensor that Licensee
desires, in accordance with the terms of Section 4.6 and at Licensee's sole cost
and expense, to retain a consultant to assist Licensor in modifying the Licensed
Software so that it meets the Functional Requirements required by the relevant
Milestone. Licensor agrees, in accordance with the terms of Section 4.6, to
cooperate with and provide reasonable assistance to such consultant to the
extent necessary in preparing the Deliverables so that they may meet the
applicable Functional Requirement in all material respects. In the event that
Licensee elects to so retain a consultant, and at least 120 days after such
consultant has been retained by Licensee and has provided assistance to
Licensor, the Functional Requirements for the relevant Milestone still have not

                                       19

<PAGE>

been met, the parties may renegotiate the terms of this Agreement or the
Licensee may terminate this Agreement by giving not less than thirty (30) days
prior written notice, provided that during such notice period, Licensor has not
provided the relevant Deliverable to Licensee. In the event of such termination
by Licensee, the Licensee shall not be entitled to a refund of any amounts
previously paid to Licensor; provided, however, that Licensor has used all
resources reasonably required to meet the applicable Functional Requirements
required by the Milestone. In the event of a termination by Licensee pursuant to
this Section 7.2(c), each party shall continue to be bound by the terms of the
NDA. Notwithstanding anything to the contrary provided in this Agreement, the
remedy set forth in this Section 7.2(c) shall be the sole and exclusive remedy
of Licensee and sole liability of Licensor, for failure of Licensor to provide a
Deliverable in accordance with any of the Milestones set forth in the Functional
Requirements.

                  (d) By Licensee. Licensee shall have the right to terminate
this Agreement in the event that:

                      (i) Licensee is enjoined from using any of the Licensed
                  Technology in any portion of the Territory resulting in a
                  material adverse effect on Licensee's business, provided
                  however that, in lieu of such termination, Licensee, at its
                  option, may cease to use such Licensed Technology in such
                  affected portion of the Territory and may obtain a reduction
                  in the Minimum as shall be determined through agreement
                  between the parties or, if no agreement can be reached, by
                  arbitration as herein provided;

                      (ii) the Licensed Technology (other than any modification,
                  Enhancement or Improvement requested by Licensee or developed
                  by Licensor in order to meet the Functional Requirements) is
                  found, by a court of last resort not subject to appeal, to
                  infringe the patent or other intellectual property rights of a
                  third party; or

                      (iii) any of the Patents are held to be invalid or
                  unenforceable, provided that if any Patents or any specific
                  claims in any such Patents are held to be invalid or
                  unenforceable, but the Licensee is still able to make gainful
                  use of the Licensed Technology, Licensee shall not have the
                  right to terminate this Agreement.

                  (e) By Licensor. Licensor shall have the right to terminate
this Agreement in the event that Licensee is in material breach of this
Agreement and has failed after thirty (30) days written notice from Licensor to
take active steps to cure such breach.

                  Section 7.3. Obligations Upon Termination.

                  Upon the effective date of termination of this Agreement for
any reason, other than the expiration of the Term or pursuant to Section 7.1
herein, Licensee shall immediately (i) discontinue use of the Products and
Licensed Technology and all portions thereof, and (ii) return to Licensor
forthwith all such Products, Licensed Technology and all other Proprietary and
Confidential Information of Licensor in its possession to Licensor, including
all copies or partial copies thereof.

                                       20

<PAGE>

                                  ARTICLE EIGHT

                   REPRESENTATIONS AND WARRANTIES OF LICENSOR

                  Licensor represents and warrants to Licensee as follows:

                  Section 8.1. Power and Authority.

                  Licensor has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by Licensor, constitutes the valid and binding agreement
of Licensor and is enforceable against Licensor in accordance with its terms.

                  Section 8.2. Conflicting Instruments.

                  (a) The execution and delivery by Licensor of this Agreement
does not, and the consummation of the transactions contemplated hereby will not
(i) violate any provision of the articles of incorporation or by-laws of
Licensor or (ii) conflict with or result in a breach of, create an event of
default (or an event that, with the giving of notice or lapse of time or both,
would constitute an event of default) under, or give any third party the right
to accelerate any obligation under, any agreement, mortgage, license, lease,
indenture, instrument, order, arbitration award, judgment or decree to which
Licensor is a party or by which Licensor is bound or affected.

                  (b) The execution and delivery by Licensor of this Agreement
do not, and the consummation of the transactions contemplated hereby will not,
result in a violation of, or require any authorization, approval, consent or
other action by, or require any registration, declaration or filing with or
notice to, any court or pursuant to any statute, law, rule, regulation or
ordinance applicable to Licensor; except that Licensor must give notice of the
execution of this Agreement to the Nevada gaming authorities and provide them
with a copy of this Agreement. There is no pending or, to the best knowledge of
Licensor, threatened action, suit, proceeding or investigation against Licensor
before or by any court or governmental body or agency (i) to restrain or prevent
the consummation of the transactions contemplated by this Agreement or (ii) that
might affect the rights of Licensor or Licensee in any material respect with
respect to the License.

                  Section 8.3. Patents.

                  Schedule 1 sets forth a true and complete list as of the date
of this Agreement of all patents, pending patent applications and applications
therefor owned or filed by or licensed to Licensor and all jurisdictions wherein
such patents have been granted, are pending or for which an application is being
made.

                  Section 8.4. Title.

                  The Licensed Technology is original to, and was developed by,
Licensor. Except as set forth in Exhibit F, Licensor has all right, title and
interest in and to the Licensed Technology free and clear of all liens, charges,
encumbrances and claims whatsoever and the Licensed Technology is not subject to
any restriction with respect to its transferability pursuant to this Agreement.
No third party, including any past, present or future director, officer,
employee, incorporator, agent or stockholder or Affiliate of Licensor has or

                                       21

<PAGE>

shall have grounds for any claims against Licensor in respect of the ownership
the Licensed Technology.

                  Section 8.5. Infringement.

                  Except as set forth in Exhibit F, there is no action, suit,
claim, proceeding, inquiry or investigation pending or, to the best knowledge of
the officers and directors of Licensor, threatened, against or affecting
Licensor, either at law or in equity, or before or by any arbitrator or any
federal, state, local or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign alleging that the
Licensed Technology infringes the rights of third parties or is invalid or
unenforceable, and none of the officers or directors of Licensor know of any
basis for any of the foregoing.

                  Section 8.6. Conformity to Functional Requirements.

                  For one year following each Acceptance as obtained in
accordance with the terms of Section 4.4 hereof (each a "Warranty Period"), the
Licensed Software as so accepted and further modified in accordance with the
terms of Section 4.5 hereof, under normal use and service on the System
Environment, shall conform in all material respects to the Functional
Requirements and shall contain no Software Defects that Licensor using
commercially reasonable efforts and applying computer software industry
standards cannot cure; provided however, that (i) the Licensed Software is used
in conformity with Licensor's instructions and Licensee has installed the latest
software update, work around, patch, correction or release supplied by Licensor,
(ii) Licensor will not be obligated to remedy any Software Defect caused by
Licensee's or any third party's modification or misuse of the Licensed Software
or any non-reproducible Software Defect and (iii) with respect to any
non-reproducible Software Defect, this Section 8.6 shall in no way limit the
obligations of Licensor set forth in Section 4.5 hereof. Notwithstanding
anything to the contrary herein provided, Licensor shall have no responsibility
or liability for defects in the System or System Environment provided by
Licensee, defects in any telecommunications lines or facilities provided by or
at the request of Licensee, the network or network design provided by Licensee
on which the Licensed Software as modified in order to meet the Functional
Requirements is intended to be installed and operated.

                  Section 8.7. SportXction.

                  Licensor warrants that the mark "SportXction" in the form
attached as Exhibit G has been registered by the U.S. Patent and Trademark
Office and is owned by Licensor.

                  Section 8.8. Limitation on Warranties.

                  Notwithstanding anything to the contrary herein provided,
except as provided in Section 8.6, Licensor makes no representation or warranty
with respect to any modification, Enhancement or Improvement to the Licensed
Software made at the request of Licensee in order to meet the Functional
Requirements or otherwise requested by Licensee, and Licensor makes no warranty
with respect to any Licensed Technology relating to FOURS.

                                       22

<PAGE>

                                  ARTICLE NINE

                   REPRESENTATIONS AND WARRANTIES OF LICENSEE

                  Licensee represents and warrants to Licensor as follows:

                  Section 9.1. Power and Authority.

                  Licensee is a limited liability company duly organized under
the laws of the State of Delaware. Licensee has all requisite power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by Licensee, constitutes the
valid and binding agreement of Licensee and is enforceable against Licensee in
accordance with its terms.

                  Section 9.2. Conflicting Instruments.

                  (a) The execution and delivery by Licensee of this Agreement
does not, and the consummation of the transactions contemplated hereby will not
(i) violate any provision of the Certificate of Formation of Licensee or Limited
Liability Company Agreement among the members of Licensee or (ii) conflict with
or result in a breach of, create an event of default (or an event that, with the
giving of notice or lapse of time or both, would constitute an event of default)
under, or give any third party the right to accelerate any obligation under, any
agreement, mortgage, license, lease, indenture, instrument, order, arbitration
award, judgment or decree to which Licensee is a party or by which Licensee is
bound or affected.

                  (b) The execution and delivery by Licensee of this Agreement
do not, and the consummation of the transactions contemplated hereby will not,
result in a violation of, or require any authorization, approval, consent or
other action by, or require any registration, declaration or filing with or
notice to, any court or administrative or governmental body pursuant to any
statute, law, rule, regulation or ordinance applicable to Licensee. There is no
pending or, to the best knowledge of Licensee, threatened action, suit,
proceeding or investigation against Licensee before or by any court or
governmental body or agency (i) to restrain or prevent the consummation of the
transactions contemplated by this Agreement or (ii) that might affect the rights
of Licensor or Licensee in any material respect with respect to the License.

                                   ARTICLE TEN

                          WARRANTY SERVICES AND CLAIMS

                  Section 10.1. Software Warranty Services.

                  (a) Except as provided herein, Licensee does not warrant that
the use or operation of the Licensed Technology will be uninterrupted or free
from Software Defects.

                  (b) During the Warranty Period, Licensor shall, at its sole
expense, except as otherwise provided in Section 10.1(b) below, provide the
following services (the "Software Warranty Services"):

                                       23

<PAGE>

                      (i) Licensor shall use its commercially reasonable
                  efforts, consistent with computer software industry standards,
                  as reasonably applied, to respond to and investigate suspected
                  Software Defects; provided Licensee complies with its
                  obligations described in Section 10.2 below, and provided that
                  Licensee (together with Licensor's assistance in accordance
                  with Section 4.5 hereof if necessary) can successfully
                  reproduce and document the Software Defect. Licensor and
                  Licensee shall assist one another in a reasonable manner to
                  reproduce and document any Software Defect so that attempts
                  can be made to correct it in accordance herewith. Licensee and
                  Licensor shall cooperate with one another in all reasonable
                  ways to cure any Software Defect. Software Defects may be
                  investigated and corrected by Licensor's personnel at
                  Licensor's offices and by investigating and remedying such
                  Software Defects by remote, network access to Licensee's
                  System, subject to the provisions of Section 10.2(e).
                  Resolution may take the form of a written response,
                  supplementary documentation, work-around, coding change,
                  product patch, or other correctional aids; provided that if
                  the problem is cosmetic, minor or does not effect gainful use
                  of the Licensed Software, the correction may be incorporated
                  into a future release of the Licensed Software to be prepared
                  by Licensor. Licensor will use its commercially reasonable
                  efforts to respond to a request for assistance within a
                  reasonable time following the initial contact from Licensee
                  and use commercially reasonable efforts to correct any
                  Software Defect as promptly as practicable. Prior to notifying
                  Licensor about a Software Defect, Licensee shall use
                  commercially reasonable efforts to attempt to cure such
                  Software Defect with its own personnel.

                      (ii) If Licensor, in its reasonable judgment, determines
                  that the Software Defect was attributable to a cause other
                  than a programming error by Licensor, or if Licensor performs
                  Software Warranty Services outside Licensor's offices or
                  outside Licensor's normal business hours (and in the
                  immediately preceding instance, with the consent of Licensee),
                  then Licensee shall pay Licensor for the Licensor's attempts
                  at correcting the Software Defect, or such Software Warranty
                  Services, as the case may be, on a time and materials basis at
                  Licensor's then prevailing rates, and Licensee shall reimburse
                  Licensor for reasonable out-of-pocket travel expenses, meals,
                  lodging and communications expenses, if Licensor is required
                  to have its employees at any facility of Licensee. If Licensee
                  disagrees with Licensor's determination as set forth above,
                  the parties shall use their respective commercially reasonable
                  efforts to resolve their dispute as promptly as practicable.

                  Section 10.2. Conditions to Software Warranty Services.

                  Licensor's obligations to provide Software Warranty Services
are subject to the following:

                      (a) Licensee shall appoint persons who are technically
                  skilled in the preparation and maintenance of computer
                  software to receive telephone and e-mail assistance from
                  Licensor. Licensee may change the appointed support contact
                  persons no more frequently than once every thirty (30) days by
                  providing written notice to Licensor of such change.

                                       24

<PAGE>

                      (b) Licensee shall provide Licensor at no charge with
                  access to and use of the Designated Locations, as well as all
                  utilities and data communications resources, as reasonably
                  necessary for Licensor to provide the Software Warranty
                  Services. Licensee shall allow Licensor to use upon its
                  request at no charge (to the extent not prohibited by
                  Licensee's agreements with third parties) all required
                  diagnostic programs and all documentation available which
                  pertain to the Systems on which the Licensed Software is
                  installed.

                      (c) When reporting a Software Defect, Licensee shall: (i)
                  provide initial analyses and description of the Software
                  Defect, (ii) use commercially reasonable efforts to eliminate
                  any telecommunication line, hardware, operating System
                  software and third party application software deficiencies,
                  (iii) capture all relevant data and documentation, all
                  operating conditions and other operating information and fully
                  supply Licensor's maintenance and support service
                  representatives with requested diagnostic information
                  necessary to reproduce the Software Defect, and (iv) promptly
                  implement any remedial, corrective or work-around procedure(s)
                  recommended by Licensor and fully describe any limitations
                  imposed by such corrections or work-arounds provided that such
                  remedial, corrective or work-around procedures do not impair
                  Licensee's ability to use the Licensed Software substantially
                  in the manner described in Agreement.

                      (d) Licensee shall provide Licensor with network access to
                  Licensee's System via telecommunications lines to the extent
                  necessary for Licensor to perform Software Warranty Services.

                      (e) Notwithstanding anything to the contrary herein
                  provided, in the event that the Licensed Software is modified
                  by any party other than Licensor unless specifically approved
                  by Licensor or pursuant to Section 4.6 or Section 7.2 (c)
                  herein, all warranties made by Licensor hereunder with respect
                  to the Licensed Software shall be of no further force or
                  effect.

                  Section 10.3. Disclaimers of Warranties.

                  (a) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
THE PRODUCTS, LICENSED TECHNOLOGY AND THE SOFTWARE WARRANTY SERVICES PROVIDED BY
LICENSOR HEREUNDER ARE LICENSED AND PROVIDED WITHOUT ANY WARRANTY AS TO THEIR
PERFORMANCE, ACCURACY, OR FREEDOM FROM ERROR, OR AS TO ANY RESULTS GENERATED
THROUGH THEIR USE, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

                  (b) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
NOTHING IN THIS LICENSE AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION OR
WARRANTY BY LICENSOR OF THE VALIDITY OF ANY OF THE PATENTS, TRADEMARKS OR
COPYRIGHTS OR THE ACCURACY, SAFETY, OR USEFULNESS FOR ANY PURPOSE, OF ANY
PROPRIETARY AND CONFIDENTIAL INFORMATION, OR LICENSED SOFTWARE AT ANY TIME MADE
AVAILABLE BY LICENSOR.

                                       25

<PAGE>

                                 ARTICLE ELEVEN

                                 INDEMNIFICATION

                  Section 11.1. By Licensor.

                  During the Term, Licensor shall indemnify and hold Licensee
harmless from and against any fine, penalty, loss, liability and expense
(including reasonable attorneys' fees and court costs) incurred by Licensee as a
result of any claim, demand or action ("Infringement Claim") against Licensee
based on, related to or arising out of any claim that any Licensed Technology
infringes or misappropriates any patent or other intellectual property right of
a third party; provided, however, that Licensor shall have no liability pursuant
to this Section 11.1 or otherwise for any Infringement Claim to the extent such
Infringement Claim is proximately caused by (a) the misuse or unapproved
modification of the Licensed Technology by Licensee, (b) the failure by Licensee
to use corrections updates, fixes, work-arounds or new releases provided by
Licensor, (c) the modification or Improvement or Enhancement of any of the
Licensed Technology by any person other than Licensor, or someone specifically
approved by Licensor, (d) the use of the Licensed Technology in combination with
software programs, data, hardware or equipment not provided or approved by
Licensor, or (e) any modification, Improvement or Enhancement requested by
Licensee in order to meet the Functional Requirements set forth on Exhibit C or
otherwise or any Licensed Technology relating to FOURS. In the event of an
Infringement Claim for which Licensor is responsible, or if in Licensor's
reasonable judgment an Infringement Claim for which Licensor is responsible is
likely to be made, Licensor may, at its option and expense, or if a
nonappealable final judgment against Licensee with respect to an Infringement
Claim is entered, or in connection with an Infringement Claim, a temporary
restraining order or injunction is issued against Licensee's use of any Licensed
Technology, Licensor shall, at its expense, either (i) procure the right for
Licensee to continue using the Licensed Technology in accordance with this
Agreement or (ii) replace or modify the Licensed Technology in a functionally
equivalent manner so that such Licensed Technology becomes noninfringing. In the
event that the above remedies are not available within ninety (90) days of the
date any judgment described in the foregoing sentence becomes final and
nonappealable or of the date of the issuance of any temporary restraining order
or injunction described in the foregoing sentence, Licensee shall have the
option to terminate this Agreement upon thirty (30) days' notice to Licensor
without waiver of any additional remedies available at law or in equity in
respect of any breach of Licensor's representations and warranties in Section 8
of this Agreement and without any obligation to make additional payments to
Licensor hereunder provided that Licensee shall thereupon cease use of any of
the licensed Technology in accordance with Section 7.3. In the event that any
such Infringement Claim relates to only a portion of the Licensed Technology,
Licensee shall, unless Licensee determines in its reasonable discretion that the
portion of the Licensed Technology is material to the use of the overall
Licensed Technology, cease using only such portion of the Licensed Technology,
and a reduction in any payments provided for herein shall be made to reflect the
value of such portion as determined by agreement between the parties or by
arbitration. Licensor shall indemnify and hold Licensee harmless from and
against any and all fines, penalties, losses, liabilities and expenses
(including reasonable attorneys' fees and court costs) arising from the breach
by Licensor of any provision of this Agreement.

                                       26

<PAGE>

                  Section 11.2. By Licensee.

                  During the Term, Licensee shall indemnify and hold Licensor
harmless from and against any fines, penalties, losses, liabilities and expenses
(including reasonable attorneys' fees and court costs) incurred by Licensor as a
result of (i) any Infringement Claim against Licensor based on, related to or
arising out of any claim that any modification, Enhancement or Improvement of
the Licensed Technology by Licensor in order to meet the Functional Requirements
or relating to FOURS by any person other than Licensor or any person
specifically approved by Licensor, (ii) any breach by Licensee of any provision
of this Agreement or (iii) any claim that the use of the Licensed Technology
violates any Government Regulatory Requirements or otherwise violates any
federal, state or local law, rule, or regulation of the United States or any
other jurisdiction in which the Licensed Technology is being used by Licensee or
any players.

                  Section 11.3. Conditions to Indemnification.

                  The foregoing indemnities shall be contingent upon (i) the
indemnified party ("Indemnified Party") giving prompt written notice to the
other party ("Indemnifying Party") of any claim, demand or action for which
indemnity is sought (an "Indemnified Claim") and (ii) the Indemnified Party
fully cooperating in the defense or settlement of any Indemnified Claim at the
expense of the Indemnifying Party. The Indemnifying Party shall have sole
control over the defense of any Indemnified Claim; provided that the Indemnified
Party may, in its discretion and at its sole cost and expense participate in any
such defense with counsel of its own choice. The Indemnifying Party shall obtain
the prior written consent of the Indemnified Party to any settlement thereof,
which consent shall not be unreasonably withheld or delayed unless such
settlement involves only the payment of money damages or royalties that the
Indemnifying Party has paid or has agreed to pay.

                  Section 11.4. Prosecution of Infringement; Prior Art.

                  (a) Each party shall promptly notify the other party of any
possible infringement by a third party of the Licensed Technology known to such
party. If Licensor and Licensee agree (or, failing agreement, should an
independent patent counsel appointed jointly by the parties advise) that such
third party's products fall within the scope of any of the rights associated
with the Licensed Technology, Licensor may commence proceedings in respect of
such infringement within ninety (90) days of Licensee's notice thereof to
Licensor or on receipt of advice from independent patent counsel, whichever
occurs later, and agrees to permit Licensee to join as co-plaintiff (at
Licensee's sole cost and expense) if Licensee so desires. If Licensor fails to
so commence proceedings, Licensee shall be entitled (at Licensee's sole cost and
expense) to prosecute the infringers, joining Licensor as a party plaintiff in
any such action. The party commencing such litigation shall have control over
the litigation and any settlement thereof. Recoveries in any patent infringement
proceeding shall be for the benefit of both parties in proportion to the
expenses incurred by each of them in connection with such proceedings. Each
party shall cooperate and lend assistance to the other party in connection with
any such proceedings.

                  (b) Licensee shall bring to Licensor's attention any prior art
or other information known to Licensee or hereafter acquired by Licensee which
is relevant to the patentability or validity of any of the Products and which
might cause a court to restrict, narrow or render invalid any patent, trademark,
copyright or other intellectual property rights of Licensor. Licensee shall

                                       27

<PAGE>

particularly specify such prior art or other information to Licensor at the time
it learns thereof and not less than ninety (90) days prior to bringing any
action against Licensor asserting the invalidity of any of the Patents.

                  Section 11.5. Negotiation of Licenses.

                  If Licensor and Licensee should agree (or, failing agreement,
should an independent patent counsel appointed jointly by the parties advise)
that a patent owned by or licensed to a third party would be infringed by the
use of the Licensed Technology other than with respect to any modification,
Improvement or Enhancement requested by Licensee in order to meet the Functional
Requirements or otherwise or any Licensed Technology relating to FOURS, then
Licensor will use commercially reasonable efforts to obtain at its expense a
license under such patent from the owner or licensee thereof which would enable
Licensee to continue to use such Licensed Technology; provided that if the
infringement relates to any modification, Improvement or Enhancement requested
by Licensee in order to meet the Functional Requirements or otherwise, or
relates to FOURS, then Licensee will use commercially reasonable efforts to
obtain at its expense a license under such patent from the owner or licensee
thereof which would enable Licensee to continue to use the Licensed Technology.
Should Licensor not obtain such license for Licensee, Licensee may directly
negotiate and obtain such license from the third party. Upon obtaining such
license, provided that such license has been negotiated by Licensee in good
faith and on an arms length basis, Licensee shall credit in full any royalty
paid to the third party for such license against any amount Licensee would
otherwise owe Licensor pursuant to this Agreement; provided that the credit
against the amount owed to Licensor pursuant to this Agreement shall in no event
exceed 33 1/3% of the Fees payable to Licensor hereunder for any period during
which Fees are payable hereunder.

                  Section 11.6. Assertion of Infringement Claims.

                  Licensee shall not, and it shall cause its officers,
directors, employees, agents, representatives and sublicensees not to, assert or
encourage any other person, firm or entity to assert or participate in any claim
that the Patents or any other portion of the Licensed Technology is not valid or
not enforceable, or that the Licensed Technology or any portion thereof
infringes any intellectual property rights of any other person, firm or entity.

                                 ARTICLE TWELVE

                            LIMITATIONS OF LIABILITY

                  Section 12.1. EXCLUDED DAMAGES.

                  NEITHER PARTY SHALL HAVE ANY LIABILITY FOR INDIRECT,
CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES), INCLUDING, BUT NOT LIMITED TO, LOSS OF
REVENUE OR ANTICIPATED PROFITS, OR LOST BUSINESS.

                                       28

<PAGE>

                  Section 12.2. LICENSOR'S LIMITATION OF LIABILITY

                  EXCEPT AS PROVIDED IN SECTION 7.2(c), UNTIL SUCH TIME AS THE
DELIVERABLES HAVE BEEN PROVIDED, LICENSOR'S TOTAL LIABILITY TO LICENSEE FOR
BREACH OF CONTRACT AND FOR ALL OTHER CLAIMS (INCLUDING TORT CLAIMS) OTHER THAN
WILLFUL BREACH OR INTENTIONAL MISCONDUCT ARISING IN CONNECTION WITH THIS
AGREEMENT, OR THE PRODUCTS OR LICENSED TECHNOLOGY, SHALL NOT EXCEED THE TOTAL
AMOUNT OF PAYMENTS MADE BY LICENSEE TO LICENSOR UNDER THIS AGREEMENT;
THEREAFTER, LICENSOR'S LIABILITY SHALL BE LIMITED TO THE FEES PAID TO LICENSOR
DURING THE 12-MONTH PERIOD PRIOR TO ANY SUCH ALLEGED BREACH.

                                ARTICLE THIRTEEN

                                   SOURCE CODE

                  Section 13.1. Software Escrow Agent.

                  Licensor hereby agrees to deliver to Fort Knox Escrow
Services, Inc. (the "Software Escrow Agent"), promptly after the date hereof,
pursuant to the terms of the escrow agreement entered into among Licensor,
Licensee and the Software Escrow Agent on the date hereof, the Source Code.
Licensor hereby covenants that it shall deposit promptly with the Software
Escrow Agent any modifications, updates, new releases, Improvements or
Enhancements relating to such Source Code.

                  Section 13.2. Release of Source Code from Escrow.

                  In the event, and only in the event that (i) Licensor shall
have been subject to Bankruptcy as provided in Section 7.2(b)(iii), or (ii) an
arbitral award is granted to Licensee in which award the arbitrators have
determined that Licensor has defaulted in a material respect under this
Agreement (other than a breach described in Section 7.2(c) for which the remedy
set forth in Section 7.2(c) is Licensee's sole and exclusive remedy), then
Licensor shall make available to Licensee for use only in Licensor's facility
the Source Code or whatever portion is necessary to resolve the breach by
Licensor and to otherwise enjoy the benefits of the Licensed Technology, unless
(a) Licensor has no facility, or (b) such facility is not at least equivalent in
all material respects, to Licensor's existing facility in Little Falls, New
Jersey, in which event Licensee may use the Source Code or such portion of the
Source Code in a facility of Licensee located in the New York City metropolitan
area or in Licensee's main technical facility in the U.S. or Europe. If the
Source Code is used in Licensee's facility, appropriate safeguards shall be
maintained to prevent disclosure or mishandling of the Source Code.

                                       29

<PAGE>

                                ARTICLE FOURTEEN

                               RESTRICTIVE RIGHTS

                  Section 14.1. Restrictions on Licensee.

                  During the Term, Licensee or any of its Affiliates shall not
use any software that is competitive with the Licensed Technology; provided that
nothing shall preclude Licensee from utilizing any other technology in
conjunction with the Licensed Technology so long as Licensee continues to pay to
Licensor the Fees payable pursuant to Section 5. In the event that Licensee
elects not to request that Licensor modify the Licensed Software for use in
connection with Wagering on FOURS, Licensor shall not be entitled to any fees
with respect to Wagering on FOURS, and Licensee, with respect to FOURS, shall
not be subject to any of the foregoing restrictions.

                  Section 14.2. Restrictions on Licensor.

                  During the Term, Licensor or any of its Affiliates shall not
use any system or software or conduct any business (other than Lotteries) in the
Territory that is competitive with the business of Licensee or competitive with
the proposed business of the Licensee contemplated by this Agreement.

                                 ARTICLE FIFTEEN

                                  MISCELLANEOUS

                  Section 15.1. Amendment.

                  No amendment, modification or discharge of this Agreement, and
no waiver hereunder, shall be valid or binding unless set forth in writing and
signed by the parties hereto.

                  Section 15.2. Assignment; Subcontracting; Affiliate
Transactions.

                  (a) Licensee shall not, except as permitted by Section 3.7
herein, directly or indirectly, by operation of law or otherwise, assign,
delegate, sublicense or subcontract any of its rights or obligations under this
Agreement without the prior written consent of Licensor.

                  (b) Licensor shall not, except as permitted by the prior
written consent of Licensee, which consent may be withheld in Licensee's sole
discretion, assign any or all of its rights and obligations hereunder; provided
that Licensor may subcontract portions of the activities required of Licensor
hereunder as long as (i) Licensor remains responsible therefor, (ii) Licensor
gives Licensee notice of the name of such subcontractor promptly after Licensor
enters into any such subcontract, (iii) such subcontractor signs a
confidentiality agreement to the same effect as Section 3.5 of this Agreement
and signs a patent assignment agreement that is similar in all material
respects, to that previously furnished to Licensee, and (iv) if such subcontract
is of a material portion of Licensor's responsibilities hereunder, Licensor
gives notice thereof to Licensee at least five (5) days prior to entering into
such subcontract. In the event that Licensor obtains Licensee's prior written
consent to subcontract the performance of any of its obligations hereunder,
Licensor shall be responsible for any payment to any subcontractor for the
performance thereof.

                  (c) All transactions between each of Licensor and Licensee,
and their respective Affiliates, shall be conducted in good faith on an
arms-length basis.

                                       30

<PAGE>

                  Section 15.3. Travel and Living Expenses.

                  In addition to the Fees or other payments by Licensee to
Licensor provided herein, Licensee shall pay, or reimburse, Licensor for all
reasonable, and out-of-pocket costs of traveling from Licensor's facility to
Licensee's facility and all reasonable, and out-of-pocket living and
communications expenses while working at Licensee's facility in connection with
the Project.

                  Section 15.4. Attorneys' Fees.

                  In the event any party (i) obtains from a court of competent
jurisdiction injunctive relief of any nature with respect to any matter arising
under this Agreement or (ii) seeks judicial intervention to obtain enforcement
of any arbitral award relating to any matter arising under this Agreement, such
party shall be entitled to recover from the other party its reasonable
out-of-pocket attorneys' fees and costs (as determined by a court of competent
jurisdiction).

                  Section 15.5. Further Assurances.

                  Licensee and Licensor shall each, upon the request of the
other party hereto, from time to time, execute and deliver such further
documents and do such further acts as the other party may reasonably request in
order fully to effect the purpose of this Agreement.

                  Section 15.6. Right and Remedies.

                  Except as provided in Section 7.2(c), each and every right and
remedy granted to each of the parties under this Agreement shall be cumulative
and in addition to any other right or remedy therein specifically granted or now
or hereafter existing in equity, at law, by virtue of statute or otherwise, and
may be exercised by each of the parties from time to time concurrently or
independently and as often and in such order as such party may deem expedient.
Any failure or delay on the part of either party in exercising any such right or
remedy, or abandonment or discontinuance of steps to enforce the same, shall not
operate as a waiver thereof or affect such party's right thereafter to exercise
the same.

                  Section 15.7. Binding Effect.

                  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.

                  Section 15.8. Counterparts.

                  For the convenience of the parties, this Agreement may be
executed in as two or more counterparts. It shall not be necessary that the
signature of or on behalf of each party appears on each counterpart, but it
shall be sufficient that the signature of or on behalf of each party appears on
one or more of the counterparts.

                                       31

<PAGE>

                  Section 15.9. Entire Agreement.

                  This Agreement (including the Exhibits and Schedules hereto)
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof, and it supersedes all prior oral or written agreements,
commitments or understandings with respect to the matters provided for herein,
except as set forth in the NDAs.

                  Section 15.10. Expenses.

                  Except for costs and expenses specifically assumed by a party
under, or imposed upon a party pursuant to, this Agreement, each party hereto
shall pay its own expenses incident to this Agreement.

                  Section 15.11. Export of Products.

                  Licensee agrees that it will not, directly or indirectly,
export or re-export, or knowingly permit the export or re-export of, the
Products, or any technical information about the Products that is in violation
of any Governmental Regulatory Requirements.

                  Section 15.12. Force Majeure.

                  Each party shall be excused from performance of this Agreement
and shall not be liable for any delay (other than a delay in a payment
obligation) in whole or in part caused by the occurrence of any contingency
beyond the reasonable control of such party. These contingencies include,
without limitation, war, sabotage, insurrection, riot or other act of civil
disobedience, act of public enemy, failure or delay in transportation, act of
government or any agency or subdivision thereof affecting the terms of this
Agreement or otherwise, judicial action, labor dispute, accident, fire,
explosion, flood, severe weather or other act of God.

                  Section 15.13. Governing Law; Forum Selection and
Jurisdiction.

                  This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflict of laws.

                  Section 15.14. Independent Contractors.

                  The relationship between Licensor and Licensee under this
Agreement is that of independent contractors only. Nothing in this Agreement
shall be construed so as to constitute Licensor and Licensee as partners or
joint venturers, or either party hereto as the employee or agent of the other
party hereto, or in any other manner other than as independent contractors.
Neither party shall have any power or authority to bind the other party in any
transaction with a third party.

                  Section 15.15. Notices.

                  All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be mailed by
first-class' registered or certified mail, return receipt requested, postage

                                       32

<PAGE>

prepaid, or transmitted by hand delivery (including delivery by courier),
telegram or facsimile, addressed as follows:

                  (i)      If to Licensor:

                           International Sports Wagering Inc.
                           201 Lower Notch Road
                           Little Falls, New Jersey  07424
                           Attention: President
                           Fax:  973-256-8211

                           with a copy to:

                           Richard M. Hoffman, Esq.
                           Friedman Kaplan & Seiler LLP
                           875 Third Avenue
                           New York, New York  10022-6225
                           Fax:  212-355-6401

                  (ii)     If to Licensee:

                           Global Interactive Gaming, Inc.
                           c/o Stephan Haimo
                           Gibson Dunn & Crutcher LLP
                           200 Park Avenue
                           New York, New York  10166
                           Fax:  212/351-4035

                  with copies to:

                           Chris Manno, Esq.
                           Willkie Farr & Gallagher
                           787 Seventh Avenue
                           New York, New York  10019-6099
                           Fax:  212-728-8111

                           and

                           Stephan H. Haimo, Esq.
                           Gibson, Dunn & Crutcher LLP
                           200 Park Avenue
                           New York, New York  10166-0193
                           Fax:  212-351-4035

                  Section 15.16. Severability.

                  (a) If any part of any provision of this Agreement or any
other agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law, said part
shall be ineffective to the extent of such invalidity or unenforceability only,

                                       33

<PAGE>

without in any way affecting the remaining parts of said provision or the
remaining provisions of this Agreement.

                  (b) This License Agreement shall be construed without regard
to any presumption or other rule requiring construction hereof against the party
drafting this Agreement or causing it to be drafted.

                  Section 15.17. Survival.

                  (a) The provisions of Sections 3.5, 6.2, 7.3, 12.1, 12.2,
15.4, 15.17, 15.19 and 18 of this Agreement shall survive the termination of
this Agreement, regardless of the reason for such termination.

                  (b) Upon termination of this Agreement due to breach by
Licensee under Sections 6.2(b) or 7.2(b) herein, any unexercised portion of the
Warrant shall be void and of no further force or effect without any further
action by any of the parties hereto or thereto.

                  Section 15.18. Waiver.

                  Neither the waiver by any of the parties hereto of a breach of
or a default under any of the provisions of this Agreement, nor the failure of
any of the parties, on one or more occasions, to enforce any of the provisions
of this Agreement or to exercise any right or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any of such provisions, rights or privileges
hereunder.

                  Section 15.19. Arbitration.

                  Any dispute or controversy under this Agreement shall be
finally resolved in binding arbitration to be held in New York, New York,
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"). The arbitration panel shall consist of three
arbitrators appointed in accordance with such Rules, all of whom shall have
experience with computer software and licensing matters as finally determined by
the AAA. All testimony shall be transcribed and any award shall be accompanied
by written findings of fact and a written statement of reasons for the decision
and such findings and written materials shall be deemed to be Proprietary and
Confidential Information. All costs of the arbitration including but not limited
to reasonable attorney's fees and costs of investigating and pursuing the
arbitration, expert witnesses and other similar expenses (a) may be awarded to
the prevailing party in arbitration as the arbitrators see fit if such party's
expenses are less that $1 million and (b) shall be awarded by the arbitrators to
such prevailing party in proportion to the success of such party's claims if
such party's expenses are $1 million or more. Judgment upon any award made in
such arbitration may be entered and enforced in and by any court of competent
jurisdiction. Notwithstanding the foregoing, each party shall preserve the right
to seek injunctive or other interim relief in aid of arbitration before a court
of competent jurisdiction. Both parties consent to any suit, action or
proceeding being brought for such purpose to be brought exclusively in the
federal or state courts sitting in New York, New York. Both parties irrevocably
waive any objection that they now have or hereafter may have to the laying of
venue of any suit, action or proceeding brought in any such court and further
irrevocably waive any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum. Each party hereby

                                       34

<PAGE>

designates the following as their agents for service of all process pursuant to
this Agreement:

                  Licensor:                       United Corporate Services Inc.
                                                  15 East North Street
                                                  Dover, DE  19901

                  Licensee:                       Corporation Service Company
                                                  1013 Centre Road
                                                  Wilmington, DE  19805

                  Section 15.20. Benefit of this Agreement.

                  It is the explicit intention of the parties hereto that no
person or entity other than the parties hereto is or shall be entitled to bring
any action to enforce any provision of this Agreement against either of the
parties hereto, and that the covenants, undertakings, and agreements set forth
in this Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto or their respective successors and assigns as
permitted hereunder.

                                 ARTICLE SIXTEEN

                                    PUBLICITY

                  Except as required by law, neither party shall issue any press
release or similar document concerning this Agreement without the other party's
prior written consent thereof which consent shall not be unreasonably withheld
or delayed.

                                ARTICLE SEVENTEEN

                                     MARKING

                  Licensee shall place in a conspicuous location on all Products
and Licensed Technology covered by any claim of a Patent, Trademark or
Copyright, the appropriate notice in accordance with relevant U.S. or foreign
intellectual property law. Licensee shall also mark each Product and Licensed
Software with the number of each relevant Patent and, to respond to any request
for disclosure under 35 U.S.C. 287(b)(4)(B) by only notifying Licensor of the
request for disclosure. Licensee shall place marking prominently on the Licensed
Product and in a location which Licensee would find satisfactory for posting a
legal notice that it wants its customer to see. Licensee shall also provide any
comparable marking that may be required by the laws of any relevant foreign
country.

                                       35

<PAGE>

                                ARTICLE EIGHTEEN

                             INTEGRATION OF LICENSES

                  This License Agreement is entered into concurrently with
another license agreement of even date herewith (the "GIG, AG License"; together
with this License Agreement, the "Licenses") by and between Licensor and Global
Interactive Gaming AG ("GIG, AG"; together with Licensee, the "Licensees"). The
terms of the GIG, AG License shall apply to the terms hereof mutatis mutandis,
and the Licenses shall be construed as one and the same instrument for all
purposes including, but not limited to, the following:

                  (a) Any payment by Licensee to Licensor of the initial payment
pursuant to Section 5.5 hereof, the Minimum, the Percentage Fees or the Bonus,
as the case may be, pursuant to the terms hereof shall constitute payment of the
initial payment pursuant to Section 5.5 of the GIG, AG License, the Minimum, the
Percentage Fees or the Bonus, as the case may be, under the terms of the GIG, AG
License;

                  (b) Any Carry Forward Amount calculated pursuant to the terms
hereof shall constitute the Carry Forward Amount under the terms of the GIG, AG
License;

                  (c) All amounts deposited into the Escrow Account as required
pursuant to the terms hereof shall constitute deposits into the Escrow Account
as required under the terms of the GIG, AG License;

                  (d) Any accrual of interest on payable and unpaid amounts due
hereunder shall not be cumulative with the accrual of interest on payable and
unpaid amounts due under the Prisma License;

                  (e) Any default or breach by any of the parties hereto
pursuant to the terms hereof shall constitute a default and breach by such party
under the terms of the GIG, AG License;

                  (f) The Licensees shall be mandatorily joined in any
arbitration or litigation by or against Licensee commenced pursuant to the terms
hereof and for all purposes shall be treated as one party therein, and any award
or judgment rendered in any such proceeding shall be deemed enforceable by or
against, as the case may be, the Licensees as one party;

                  (g) The Licensees shall be jointly and severally liable under
the Licenses;

                  (h) Termination of this License Agreement shall constitute
termination of the GIG, AG License; and

                  (i) Performance by Licensor or Licensee of their respective
obligations under this License Agreement shall constitute performance by such
party under the GIG, AG License.

                       [Signature page follows this page]

                                       36

<PAGE>

                  IN WITNESS WHEREOF, the undersigned have executed this
Agreement, or have duly caused this Agreement to be duly executed on their
behalf, as of the date first written above.

                                             INTERNATIONAL SPORTS WAGERING INC.

                                             By:______________________________
                                                Name:  Barry Mindes
                                                Title: Chairman of the Board

                                                GLOBAL INTERACTIVE GAMING, INC.

                                             By:______________________________
                                                Name:  Peter Sprogis
                                                Title: President<PAGE>   1
                                                                     EXHIBIT 4.5
                                                                  CONFORMED COPY

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

                           Dated as of April 22, 1999

                                      among

                         THE PEPSI BOTTLING GROUP, INC.

                               BOTTLING GROUP, LLC

                            THE LENDERS NAMED HEREIN

                            THE CHASE MANHATTAN BANK,
                                    as Agent,

                             CHASE SECURITIES INC.,
                                   as Arranger

                                       and

                    NATIONSBANC MONTGOMERY SECURITIES LLC AND
                            SALOMON SMITH BARNEY INC.

                            as Co-Syndication Agents
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

<S>                                                                                  <C>
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 LENDING

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
</TABLE>

                                        i
<PAGE>   3
                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

<TABLE>
<S>                                                                                  <C>
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      Guarantee..........................................................53
SECTION 9.02      Obligations Unconditional..........................................53
SECTION 9.03      Reinstatement......................................................54
SECTION 9.04      Subrogation........................................................54
SECTION 9.05      Remedies...........................................................54
</TABLE>

                                       ii
<PAGE>   4
<TABLE>
<S>                                                                                  <C>
SECTION 9.06      Continuing Guarantee...............................................54

                                    ARTICLE X
                              SUBSIDIARY GUARANTEE

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

SCHEDULE I

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
</TABLE>

                                       iii
<PAGE>   5
                                CREDIT AGREEMENT

                           Dated as of April 22, 1999

                  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.

                                        2
<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

                                        3
<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.

                                        4
<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.

                                        5
<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 Standard & Poor's Ratings
Group or Moody's Investors Service, Inc. 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
<PAGE>   11
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.

                                        7
<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 the date hereof among each of the parties hereto.

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

                  "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 March 1999 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 [or twelve] 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:

                                        8
<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(a)(i).

                  "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 2.13(a).

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

                  "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 (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.

                  "Short Term Facilities" means (i) the $750,000,000 Series A
Senior Notes due 2000 issued pursuant to the Indenture dated as of February 25,
1999 between Pepsi and The Chase Manhattan Bank, as Trustee, as modified by the
First Supplemental Indenture dated as of February 26, 1999 among the Company,
the Guarantor, Pepsi and The Chase Manhattan Bank, as Trustee, and (ii) the
$2,500,000,000 Series B Senior Notes due 2000 issued pursuant to the Indenture
dated as of March 5, 1999 among the Company, the Guarantor and The Chase
Manhattan Bank, as Trustee.

                  "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 April 20, 2000 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(b), 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).

                  "364 Day Facility" means the 364 Day Credit Agreement dated as
of the date hereof among each of the parties hereto.

                  "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.

                  (a) 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).

                  (i) 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.

                  (ii) 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(a), 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.

                  (iii) 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 (ii) 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 (ii)
                  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 (ii) above by giving the Agent notice to
                  that effect. If the

                                       16
<PAGE>   21
                  Company accepts any offers made by Lenders pursuant to
                  paragraph (ii) 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(a)(ii).
                  The Company may not accept offers in excess of the amount
                  specified in accordance with paragraph (i)(v) above.

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

                  (v) If the Company accepts one or more of the offers made by
any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described in
paragraph (ii) 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 (ii) 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.

                  (b) 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 subsection (a) above.

                  (c) 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.

                  (d) 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 subsection
(a)(i) 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 subsection (a)(i) above and set forth in the promissory note, if
any, evidencing such Competitive Bid Advance.

                  (e) 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 subsection (a)(ii) 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 subsection (a)(i) above, as provided in the promissory
note, if any, evidencing such Competitive Bid Advance.

                  (f) 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.

                  (g) 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, 1999, 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, 1999 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(c)) 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)(iv)) 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(b) and no Conversion of any Revolving Credit Advances shall result in more
separate Revolving Credit Borrowings than permitted under Section 2.02(b). 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(c)) 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 of 1986, as amended or any successor thereto (the
"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 1001 or 4224, 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 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 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(c)) 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 LENDING

            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 26, 1998 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 Skadden, Arps, Slate, Meagher & Flom,
LLP, 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
            (h) On or prior to the Effective Date, the Company shall have
completed the initial public offering of its common stock and shall have
received net proceeds thereof in a minimum amount of $2,300,000,000.

            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

            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 26,
1998, 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 26, 1998, 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 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.

            (j) Any reprogramming required to permit the proper functioning, in
and following the year 2000, of (i) the Company's and the Subsidiaries',
including the Guarantor's, computer systems and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which the Company's or such Subsidiaries' systems interface) and the testing of
all such systems and equipment, as so reprogrammed, will be completed within
such period of time as is required to avoid the occurrence of a Material Adverse
Effect as a result of the failure to complete such reprogramming. The cost to
the Company and such Sub-

                                       37
<PAGE>   42
sidiaries of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Company and such Subsidiaries (including,
without limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Material Adverse Effect.

                                    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.

            (e) Repayment of Short Term Facilities. Repay all Debt outstanding
under the Short Term Facilities on or before May 29, 1999.

            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;

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<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) Either 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) Either 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 either 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 I 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) 552-5658), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention of Karen
Sharf (Telecopy No. (212) 270-5120); 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 laws 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:   Assistant Treasurer

                                   BOTTLING GROUP, LLC, as Guarantor

                                   By /s/ Pamela C. McGuire
                                      -----------------------------------------
                                      Title:    Managing Director

                                   THE CHASE MANHATTAN BANK, as Agent

                                   By    /s/  Karen M. Sharf
                                      -----------------------------------------
                                      Title:    Vice President
<PAGE>   62
<TABLE>
<CAPTION>
Commitment                                      Initial Lenders
----------                                      ---------------
<S>                                             <C>
$30,000,000.00                                  THE CHASE MANHATTAN BANK, as
                                                an Initial Lender

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

$30,000,000.00                                  BANK OF AMERICA
                                                NATIONAL TRUST AND SAVINGS
                                                ASSOCIATION, as an Initial
                                                Lender

                                                By    /s/  W. L. Hess
                                                  -----------------------------
                                                  Title: Managing Director

$30,000,000.00                                  CITIBANK, N.A., as an Initial
                                                Lender

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

$25,000,000.00                                  CREDIT SUISSE FIRST BOSTON
                                                CORPORATION, as an Initial
                                                Lender

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

                                                By    /s/ Robert Hetu
                                                  -----------------------------
                                                  Title: Vice President
</TABLE>
<PAGE>   63
<TABLE>
<S>                                             <C>
$25,000,000.00                                  UBS AG as an Initial Lender

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

                                                By    /s/ Roman Edelmann
                                                  -----------------------------
                                                  Title: Director

$20,000,000.00                                  LEHMAN COMMERCIAL PAPER INC.,
                                                as an Initial Lender

                                                By    /s/ Michele Swanson
                                                  -----------------------------
                                                  Title: Authorized Signatory

$15,000,000.00                                  ROYAL BANK OF CANADA, as an
                                                Initial Lender

                                                By    /s/ John Crawford
                                                  -----------------------------
                                                  Title: Senior Manager

$12,500,000.00                                  BANCO BILBAO VIZCAYA, as an
                                                Initial Lender

                                                By    /s/ Pilar Fernadez
                                                  -----------------------------
                                                  Title: Vice President

                                                By    /s/ Eduardo Martinez
                                                  -----------------------------
                                                  Title: Assistant Vice President
</TABLE>
<PAGE>   64
<TABLE>
<S>                                             <C>
$12,500,000.00                                  DEUTSCHE BANK AG, as an
                                                Initial Lender

                                                By    /s/ Alexander Karow
                                                  Title: Assistant Vice President

                                                By    /s/ Stephan Wiedemann
                                                  -----------------------------
                                                  Title: Director

$12,500,000.00                                  FLEET NATIONAL BANK, as an
                                                Initial Lender

                                                By    /s/ Christopher Criswell
                                                  -----------------------------
                                                  Title: Senior Vice President

$12,500,000.00                                  HONG KONG & SHANGHAI BANKING
                                                CORP., as an Initial Lender

                                                By    /s/ Kim Leary
                                                  -----------------------------
                                                  Title: Vice President

$12,500,000.00                                  THE BANK OF NEW YORK, as an
                                                Initial Lender

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

$12,500,000.00                                  THE NORTHERN TRUST COMPANY,
                                                as an Initial Lender

                                                By    /s/ Nicole Boehm
                                                  -----------------------------
                                                  Title: Commercial Banking
                                                  Officer

$250,000,000 Total of the Commitments
</TABLE>
<PAGE>   65
                                   SCHEDULE I

<TABLE>
<CAPTION>
Lender                  Domestic Lending Office    Eurodollar Lending Office
------                  -----------------------    -------------------------
<S>                     <C>                        <C>
THE CHASE MANHATTAN     270 Park Avenue            270 Park Avenue
  BANK                  New York, New York 10017   New York,  New York 10017

BANK OF AMERICA         1850 Gateway Blvd.         1850 Gateway Blvd.
  NATIONAL TRUST        Concord, CA 94520          Concord, CA 94520
  AND SAVINGS
  ASSOCIATION

CITIBANK, N.A.          399 Park Avenue            399 Park Avenue
                        New York New York 10043    New York New York 10043

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

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

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

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

HONG KONG & SHANGHAI    HSBC Center                HSBC Center
BANKING CORP.           26th Floor                 26th Floor
                        Buffalo, New York, 14206   Buffalo, New York, 14206

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

THE NORTHERN TRUST      50 South La Salle Street,  50 South La Salle St.
  COMPANY               Chicago, Ill. 60675        Chicago, Ill. 60675
</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 April 22, 1999
(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(a) 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
                                                       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 April 22, 1999
(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(a)(v) of the Credit Agreement.

                                                  Very truly yours,

                                                  THE PEPSI BOTTLING GROUP, INC.

                                                   By
                                                       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

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 April 22, 1999 (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
April 22, 1999 (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 laws 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   ___________________________________
     Title:

Approved this ____ day
of ________, ____

THE PEPSI BOTTLING GROUP, INC.

By   ___________________________________
     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 April 22, 1999
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 April 22, 1999 (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
         _________, 1999, 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 March 30, 1999.

                  (10) Resolutions of the Managing Directors of the Guarantor
         adopted on , 1999.

                  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:

                  (a) 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.

                  (b) 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).

                  (c) 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.

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

                  I am aware that Skadden, Arps, Slate Meagher & Flom LLP will
rely upon the opinions set forth in paragraphs 1, 2 and 3 of this opinion in
rendering their opinion furnished pursuant to Section 3.01 of the Credit
Agreement. In all other respects and for all other 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 April 22, 1999 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 ___________________________________
                                    Title:

                                 [NAME OF BORROWING SUBSIDIARY]

                                 By ___________________________________
                                    Title:

                                      D-2
<PAGE>   82
ACCEPTED

THE CHASE MANHATTAN BANK
  as Agent

By ___________________________________
   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 April 22, 1999 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
                                           ---------------------------
                                           Title:

                                        BOTTLING GROUP, LLC

                                        By
                                           ---------------------------
                                           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 April 22, 1999 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 ___________________________________
                                      Title:

                                      F-1

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