SC TO-T

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE TO
                                 (RULE 14D-100)
           TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                           PEPSI-GEMEX, S.A. DE C.V.
                       (Name of Subject Company (Issuer))

                         THE PEPSI BOTTLING GROUP, INC.
                              BOTTLING GROUP, LLC
                 PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.
                      (Name of Filing Persons (Offerors))

                            Global Depositary Shares
   (Each representing six Ordinary Participation Certificates of the subject
                                    Company)

                      Ordinary Participation Certificates
   (Each representing one Series B Common Share, one Series D Preferred Share
         and one Series L Limited Voting Share of the subject Company)

                Series B Common Shares, without stated par value
              Series D Preferred Shares, without stated par value*
           Series L Limited Voting Shares, without stated par value*
                         (Title of Class of Securities)

                      713435105 (Global Depositary Shares)
                     (CUSIP Number of Class of Securities)

                            PAMELA C. MCGUIRE, ESQ.
              SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
                         THE PEPSI BOTTLING GROUP, INC.
                                 ONE PEPSI WAY
                             SOMERS, NEW YORK 10589
                                 (914) 767-6000

                                WITH A COPY TO:

                            CARLOS E. MARTINEZ, ESQ.
                            ALLAN R. WILLIAMS, ESQ.
                               PROSKAUER ROSE LLP
                                 1585 BROADWAY
                            NEW YORK, NEW YORK 10036
                                 (212) 969-3000
          (Name, Address and Telephone Number of Person Authorized to
        Receive Notices and Communications on Behalf of Filing Persons)

                           CALCULATION OF FILING FEE



- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
               TRANSACTION VALUATION*                                 AMOUNT OF FILING FEE
- -----------------------------------------------------------------------------------------------------------
                                                   
                    $885,071,094                                             $81,427
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------


* Represents the U.S. dollar equivalent of the aggregate cash consideration in
  Mexican pesos to be paid by the filing person for all outstanding Series B
  Common Shares, Series D Preferred Shares and Series L Limited Voting Shares of
  the subject company, including those represented by CPOs and GDSs, calculated
  using the noon buying exchange rate published by the Federal Reserve Bank of
  New York on October 3, 2002 of Ps.10.131 to US$1.00.
* The Series D Preferred Shares and the Series L Limited Voting Shares are
  separately registered under Section 12(b) of the Securities Exchange Act of
  1934.

[ ] Check the box if any part of the fee is offset as provided by Rule
    0-11(A)(2) and identify the filing with which the offsetting fee was
    previously paid. Identify the previous filing by registration statement
    number, or the form or schedule and the date of its filing.
        Amount previously paid: ---------------
        Filing party: -------------------------
        Form or registration No.: -------------
        Date filed: ---------------------------
    [ ] Check the box if the filing relates solely to the preliminary
        communications made before the commencement of a tender offer
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] Third-party tender offer subject to Rule 14D-1.
[ ] Issuer tender offer subject to Rule 13E-4.
[X] Going-private transaction subject to Rule 13E-3.
[ ] Amendment to Schedule 13D under Rule 13D-2.
[ ] Check the box if the filing is a final amendment reporting the results of a
    tender offer.


     This Schedule TO is being filed in connection with a tender offer in the
United States (the "U.S. Offer") by The Pepsi Bottling Group, Inc., a Delaware
corporation ("PBG"), through PBG Grupo Embotellador Hispano-Mexicano, S.L.
("Embotellador HM"), a Spanish limited liability company and an indirect
subsidiary of Bottling Group, LLC ("BG LLC"), a Delaware limited liability
company and the principal operating subsidiary of PBG, to purchase for cash all
of the outstanding Global Depositary Shares (the "GDSs") of Pepsi-Gemex, S.A. de
C.V. ("Gemex"), a variable stock corporation organized under the laws of Mexico,
and all outstanding Series B Common Shares (the "Shares") and Ordinary
Participation Certificates (the "CPOs," and collectively with the Shares and the
GDSs, the "Securities") of Gemex held by persons who are not Mexican residents.
Each CPO represents one Share, one Series D Preferred Share and one Series L
Limited Voting Share. Each GDS represents six CPOs. Simultaneously with the U.S.
Offer, Embotellador HM is offering in Mexico (the "Mexican Offer") to purchase
all outstanding Shares and CPOs of Gemex, including those held by U.S.
residents, on substantially the same terms as the U.S. Offer.

ITEM 1.  SUMMARY TERM SHEET

     The information set forth in the U.S. Offer to Purchase, dated October 7,
2002, which is attached as Exhibit 12(a)(1) to this Schedule TO, under the
caption "Summary Term Sheet" is incorporated herein by reference.

ITEM 2.  SUBJECT COMPANY INFORMATION

     The information set forth in the U.S. Offer to Purchase under the caption
"Information Regarding Gemex" is incorporated herein by reference.

ITEM 3.  IDENTITY AND BACKGROUND OF FILING PERSON

     The information set forth in the U.S. Offer to Purchase under the caption
"Information Regarding PBG and Embotellador HM" is incorporated herein by
reference.

     The information set forth in Annex I to the U.S. Offer to Purchase under
the caption "Information Concerning Directors and Executive Officers of
Embotellador HM, BG LLC, PBG and PepsiCo" is incorporated herein by reference.

     Neither PBG, BG LLC, Embotellador HM or PepsiCo, Inc., a North Carolina
corporation, nor any of their respective directors and executive officers (i)
was convicted in a criminal proceeding during the past five years (excluding
traffic violations or similar misdemeanors), and (ii) was a party to any
judicial or administrative proceeding during the past five years (except for
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.

ITEM 4.  TERMS OF THE TRANSACTION

     The information set forth in the U.S. Offer to Purchase under the caption
"The U.S. Offer" is incorporated herein by reference.

          (a)(1)(ix), (x) and (xi) Not applicable.

          (a)(2) Not applicable.

          (f) Not applicable

ITEM 5.  PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS

     The information set forth in the U.S. Offer to Purchase under the caption
"Past Contacts, Transactions, Negotiations and Agreements" is incorporated
herein by reference.

                                        2


ITEM 6.  PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS

     The information set forth in the U.S. Offer to Purchase under the captions
"Special Factors -- Background to the Offers" and "The U.S. Offer -- Our plans
for Gemex; transactions and operations following the U.S. Offer" is incorporated
herein by reference.

ITEM 7.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

     The information set forth in the U.S. Offer to Purchase under the captions
"The U.S. Offer -- Sources of funds" and "Information Agent, Receiving Agents,
U.S. Dealer Manager and other expenses" is incorporated herein by reference.

ITEM 8.  INTEREST IN SECURITIES OF THE SUBJECT COMPANY

     The information set forth in the U.S. Offer to Purchase under the captions
"Past Contacts, Transactions, Negotiations and Agreements," "Information
Regarding Gemex" and "Special Factors -- Background to the Offers" is
incorporated herein by reference.

ITEM 9.  PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED

     The information set forth in the U.S. Offer to Purchase under the caption
"The U.S. Offer -- Information Agent, Receiving Agents, Dealer Manager and other
expenses" is incorporated herein by reference.

ITEM 10.  FINANCIAL STATEMENTS

     The information set forth in the U.S. Offer to Purchase under the caption
"Information Regarding Gemex -- Selected financial data of Gemex" is
incorporated herein by reference. In addition, the Audited Consolidated
Financial Statements of Gemex at December 31, 2000 and 2001, and for each of the
three years in the period ended December 31, 2001, attached hereto as Exhibit
12(a)(8), are incorporated herein by reference. Finally, Gemex's report on Form
6-K filed with the SEC on July 26, 2002, attached hereto as Exhibit 12(a)(9),
which includes financial information and a press release regarding financial
results of Gemex during the period ended June 30, 2002, is incorporated herein
by reference.

ITEM 11.  ADDITIONAL INFORMATION

     The information set forth in the U.S. Offer to Purchase under the captions
"The U.S. Offer -- Certain legal matters; regulatory approvals," The U.S.
Offer -- Certain conditions to the U.S. Offer," "Past Contacts, Transactions,
Negotiations and Agreements" and "Exemptions Requested From the Securities and
Exchange Commission" is incorporated herein by reference.

          (a)(1) and (3) through (5) and (b) None

ITEM 12.  EXHIBITS

      
(a)(1)   U.S. Offer to Purchase, dated October 7, 2002
(a)(2)   Form of GDS Letter of Transmittal
(a)(3)   Form of Letter to Brokers, Dealers, Commercial Banks, Trust
         Companies and other Nominees
(a)(4)   Form of Letter to Clients
(a)(5)   Notice of Guaranteed Delivery
(a)(6)   Guidelines for certification of Taxpayer Identification
         Number on substitute Form W-9
(a)(7)   Summary Advertisement, dated October 7, 2002, published in
         The Wall Street Journal
(a)(8)   Audited Consolidated Financial Statements of Gemex at
         December 31, 2000 and 2001, and for each of the three years
         in the period ended December 31, 2001
(a)(9)   Gemex's Report on Form 6-K filed with the SEC on July 26,
         2002



                                        3

      
(a)(10)  Press release, dated October 7, 2002, announcing the
         commencement of the offers
(a)(11)  Press release, dated May 7, 2002 (incorporated by reference
         to PBG's Schedule TO-C filed with the SEC on May 7, 2002)
(a)(12)  Notice to employees, dated May 7, 2002 (incorporated by
         reference to PBG's Schedule TO-C filed with the SEC on May
         7, 2002)
(a)(13)  Non-binding Term Sheet (incorporated by reference to PBG's
         Schedule TO-C filed with the SEC on May 7, 2002)
(a)(14)  Press release, dated August 13, 2002 (incorporated by
         reference to PBG's Schedule TO-C filed with the SEC on
         August 14, 2002)
(a)(15)  Third quarter conference call script (incorporated by
         reference to PBG's Schedule TO-C filed with the SEC on
         October 1, 2002)
(a)(16)  Third quarter conference call script, with Q&A session
         (incorporated by reference to PBG's Schedule TO-C filed with
         the SEC on October 3, 2002)
(a)(17)  Summary of the Mexican Offer to Purchase
(b)(1)   U.S. $1,200,000,000 Senior Credit Agreement by and among
         PBG, as the borrower, certain lenders specified therein,
         Salomon Smith Barney Inc., Credit Suisse First Boston
         Corporation and Deutsche Bank Securities Inc., as joint lead
         arrangers, Citibank, N.A., Credit Suisse First Boston,
         Cayman Islands Branch and Deutsche Bank AG New York Branch,
         as joint syndication agents, and BG LLC, as guarantor
(c)(1)   Salomon Smith Barney Inc. fairness opinion
(c)(2)   Salomon Smith Barney Inc. presentation to the Board of
         Directors of PBG
(d)(1)   Agreement to Tender, dated October 4, 2002, by and among BG
         LLC, Embotellador HM and PepsiCo, Inc.
(d)(2)   Agreement to Tender, dated October 4, 2002, by and among BG
         LLC, Embotellador HM and Mr. Enrique C. Molina Sobrino
(d)(3)   Escrow Agreement, dated October 4, 2002, by and among PBG,
         Embotellador HM, Mr. Enrique C. Molina Sobrino and The Bank
         of New York



ITEM 13.  INFORMATION REQUIRED BY SCHEDULE 13E-3.

     The information required by Schedule 13E-3 is included in the responses to
the other Items of this Schedule TO. In addition, the information set forth in
the U.S. Offer to Purchase under the caption "Special Factors" is incorporated
herein by reference.

                                        4


                                   SIGNATURES

     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule TO is true, complete and
correct.

                                       PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO,
                                       S.L.

                                        
October 7, 2002                                         By: /s/ INIGO MADARIAGA
                                           --------------------------------------------------
                                                         Name: Inigo Madariaga
                                                        Title: Managing Director



     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule TO is true, complete and
correct.

                                       THE PEPSI BOTTLING GROUP, INC.

                                        
October 7, 2002                                         By: /s/ ALFRED H. DREWES
                                           --------------------------------------------------
                                                         Name: Alfred H. Drewes
                                             Title: Senior Vice President & Chief Financial
                                                                Officer



     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule TO is true, complete and
correct.

                                       BOTTLING GROUP, LLC

                                        
October 7, 2002                                         By: /s/ ALFRED H. DREWES
                                           --------------------------------------------------
                                                         Name: Alfred H. Drewes
                                                   Title: Principal Financial Officer



                                        5


                                 EXHIBIT INDEX

      
(a)(1)   U.S. Offer to Purchase, dated October 7, 2002
(a)(2)   Form of GDS Letter of Transmittal
(a)(3)   Form of Letter to Brokers, Dealers, Commercial Banks, Trust
         Companies and other Nominees
(a)(4)   Form of Letter to Clients
(a)(5)   Notice of Guaranteed Delivery
(a)(6)   Guidelines for certification of Taxpayer Identification
         Number on substitute Form W-9
(a)(7)   Summary Advertisement, dated October 7, 2002, published in
         The Wall Street Journal
(a)(8)   Audited Consolidated Financial Statements of Gemex at
         December 31, 2000 and 2001, and for each of the three years
         in the period ended December 31, 2001
(a)(9)   Gemex's Report on Form 6-K filed with the SEC on July 26,
         2002
(a)(10)  Press release, dated October 7, 2002, announcing the
         commencement of the Offers
(a)(11)  Press release, dated May 7, 2002 (incorporated by reference
         to PBG's Schedule TO-C filed with the SEC on May 7, 2002)
(a)(12)  Notice to employees, dated May 7, 2002 (incorporated by
         reference to PBG's Schedule TO-C filed with the SEC on May
         7, 2002)
(a)(13)  Non-binding Term Sheet (incorporated by reference to PBG's
         Schedule TO-C filed with the SEC on May 7, 2002)
(a)(14)  Press release, dated August 13, 2002 (incorporated by
         reference to PBG's Schedule TO-C filed with the SEC on
         August 14, 2002)
(a)(15)  Third quarter conference call script (incorporated by
         reference to PBG's Schedule TO-C filed with the SEC on
         October 1, 2002)
(a)(16)  Third quarter conference call script, with Q&A session
         (incorporated by reference to PBG's Schedule TO-C filed with
         the SEC on October 3, 2002)
(a)(17)  Summary of the Mexican Offer to Purchase
(b)(1)   U.S. $1,200,000,000 Senior Credit Agreement by and among
         PBG, as the borrower, certain lenders specified therein,
         Salomon Smith Barney Inc., Credit Suisse First Boston
         Corporation and Deutsche Bank Securities Inc., as joint lead
         arrangers, Citibank, N.A., Credit Suisse First Boston,
         Cayman Islands Branch and Deutsche Bank AG New York Branch,
         as joint syndication agents, and BG LLC, as guarantor
(c)(1)   Salomon Smith Barney Inc. fairness opinion
(c)(2)   Salomon Smith Barney Inc. presentation to the Board of
         Directors of PBG
(d)(1)   Agreement to Tender, dated October 4, 2002, by and among BG
         LLC, Embotellador HM and PepsiCo, Inc.
(d)(2)   Agreement to Tender, dated October 4, 2002, by and among BG
         LLC, Embotellador HM and Mr. Enrique C. Molina Sobrino
(d)(3)   Escrow Agreement, dated October 4, 2002, by and among PBG,
         Embotellador HM, Mr. Enrique C. Molina Sobrino and The Bank
         of New York

EX-99.A.1

                                                                  EXHIBIT (a)(1)

                        [THE PEPSI BOTTLING GROUP LOGO]

                U.S. OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
        SERIES B COMMON SHARES, ORDINARY PARTICIPATION CERTIFICATES AND
                            GLOBAL DEPOSITARY SHARES
                                       OF

                           PEPSI-GEMEX, S.A. DE C.V.

                        at the U.S. Dollar Equivalent of

                  Mexican Pesos 5.91 Per Series B Common Share
                                    of Gemex

                                      and

           Mexican Pesos 17.73 Per Ordinary Participation Certificate
                                    of Gemex
 (each CPO representing one Series B Common Share, one Series D Preferred Share
                     and one Series L Limited Voting Share)

                                      and

                Mexican Pesos 106.38 Per Global Depositary Share
                                    of Gemex
                        (each GDS representing six CPOs)

                                       by

                 PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.
                           AN INDIRECT SUBSIDIARY OF

                              BOTTLING GROUP, LLC
                     THE PRINCIPAL OPERATING SUBSIDIARY OF

                         THE PEPSI BOTTLING GROUP, INC.

THIS U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME (4:00 P.M., MEXICO CITY TIME), ON NOVEMBER 5, 2002 UNLESS THIS U.S. OFFER
IS EXTENDED.

     PBG Grupo Embotellador Hispano-Mexicano, S.L. ("Embotellador HM"), a
Spanish limited liability company and an indirect subsidiary of Bottling Group,
LLC ("BG LLC"), a Delaware limited liability company and the principal operating
subsidiary of The Pepsi Bottling Group, Inc., a Delaware corporation ("PBG"),
through simultaneous offers in the United States and in Mexico, is offering to
purchase for cash all of the outstanding Series B Common Shares (the "Shares"),
Ordinary Participation Certificates ("CPOs") and Global Depositary Shares
("GDSs", and collectively with the Shares and the CPOs, and, in each case, with
any coupon representing unpaid dividends as of the day hereof, the
"Securities"), of Pepsi-Gemex, S.A. de C.V. ("Gemex"), a variable stock
corporation organized under the laws of Mexico. Each CPO represents one Share,
one Series D Preferred Share ("D Share") and one Series L Limited Voting Share
("L Share").  Each GDS represents six CPOs.


     In the United States (the "U.S. Offer" or the "U.S. Offer to Purchase"),
Embotellador HM is offering to purchase (1) all outstanding GDSs of Gemex and
(2) all outstanding Shares and CPOs of Gemex, in each case held by persons who
are not Mexican residents. In Mexico (the "Mexican Offer", and collectively with
the U.S. Offer, the "Offers"), Embotellador HM is offering to purchase all
outstanding Shares and CPOs. All holders of GDSs may tender their GDSs only in
the U.S. Offer unless they first convert their GDSs into CPOs. All holders,
other than those who are Mexican residents, may tender their Shares and CPOs in
either the U.S. Offer or the Mexican Offer. Mexican resident holders may tender
Shares and CPOs only in the Mexican Offer. The Mexican Offer will be made on
substantially the same terms and at the same prices as the U.S. Offer.

     Payments for Shares and CPOs (but not GDSs) purchased in the Offers will be
subject in all cases to a 5% Mexican withholding tax on the gross proceeds of
the sale. See "The U.S. Offer -- Certain tax considerations -- Material Mexican
income tax consequences" for a discussion of this withholding tax and
instructions for a holder to obtain a refund under specified circumstances.

     Notwithstanding any provision of this U.S. Offer, we will not be required
to accept Securities for payment, and we may terminate or amend the U.S. Offer
if (i) less than 90% of all outstanding shares of capital stock of Gemex
(including shares represented by CPOs and GDSs) on the expiration date, is
tendered in the Offers on or prior to the expiration date of the U.S. Offer and
not withdrawn, (ii) less than all of the Securities of Gemex owned, directly or
indirectly, or which may be acquired on or before the expiration date, by
PepsiCo, Inc. ("PepsiCo") and its nominee identified in the Agreement to Tender,
dated as of October 4, 2002, by and among Embotellador HM, BG LLC and PepsiCo
(the "PepsiCo Agreement to Tender") are tendered in the Offers and not
withdrawn, (iii) less than all of the Securities of Gemex owned, directly or
indirectly, or which may be acquired on or before the expiration date, by Mr.
Enrique C. Molina Sobrino (the Chairman of the Board, Chief Executive Officer
and largest security holder of Gemex) and certain of his affiliates identified
in the Agreement to Tender, dated as of October 4, 2002 (the "Molina Agreement
to Tender"), by and among Embotellador HM, BG LLC and Mr. Molina, are tendered
in the Offers and not withdrawn, (iv) the conditions to the Mexican Offer have
not been satisfied or waived on or before the expiration date of the Mexican
Offer or the Mexican Offer has been terminated without the purchase of any
Securities, or (v) any of the other conditions set forth in this U.S. Offer
under the caption "Certain conditions to the U.S. Offer" is not satisfied or
waived at any time before the acceptance of the Securities for payment.

     For assistance in connection with the U.S. Offer, please contact Morrow &
Co., Inc. (the "Information Agent"), The Bank of New York (the "U.S. Receiving
Agent") or Salomon Smith Barney Inc. (the "U.S. Dealer Manager") at their
respective addresses and telephone numbers set forth on the back cover of this
U.S. Offer to Purchase. Additional copies of this U.S. Offer to Purchase, the
GDS Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained
from the Information Agent, the U.S. Dealer Manager, or brokers, dealers,
commercial banks or trust companies acting as your nominees.

     NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS WITH RESPECT TO THE MATTERS DESCRIBED
IN THIS OFFERING, OTHER THAN THOSE CONTAINED IN THIS U.S. OFFER TO PURCHASE
(INCLUDING THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE). IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY US.

     THIS U.S. OFFER DOES NOT CONSTITUTE AN OFFER TO BUY OR A SOLICITATION OF AN
OFFER TO SELL ANY OF THE SECURITIES OF GEMEX TO ANY PERSON IN ANY JURISDICTION
WHERE IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.

     THE U.S. OFFER HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, COMMONLY KNOWN AS THE "SEC," OR ANY SECURITIES COMMISSION
OF ANY STATE OF THE UNITED STATES OR THE COMISION

                                        ii


NACIONAL BANCARIA Y DE VALORES OF MEXICO, COMMONLY KNOWN AS THE "CNBV", OR THE
SECURITIES REGULATORY AUTHORITIES OF ANY OTHER JURISDICTION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION, THE CNBV, OR THE SECURITIES REGULATORY
AUTHORITIES OF ANY OTHER JURISDICTION PASSED UPON THE FAIRNESS OR MERITS OF THIS
U.S. OFFER NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

     The date of this U.S. Offer is October 7, 2002.

                             IMPORTANT INFORMATION

     Tenders by Holders of Shares and/or CPOs.  If you hold Shares or CPOs and
you desire to tender all or any portion of your Shares and CPOs in the U.S.
Offer, you must do so by book-entry transfer as described in this U.S. Offer to
Purchase. If you hold Shares in certificated form you should promptly contact a
broker, dealer, bank, trust company, financial institution or other nominee who
is a participant in the book-entry transfer system of S.D. Indeval, S.A. de
C.V., Institucion para el Deposito de Valores, commonly known as "Indeval," a
privately-owned central securities depositary that acts as clearing house,
depositary, custodian, settlement, transfer and registration institution for the
Mexican Stock Exchange, and arrange for the holding by such nominee of the
Shares on your behalf in book-entry form. In order for a book-entry transfer to
constitute a valid tender of your Shares and CPOs in the U.S. Offer, the Shares
and CPOs must be tendered by your nominee who is an Indeval participant into the
account maintained by Acciones y Valores de Mexico, S.A. de C.V., or Accival
(the "Mexican Receiving Agent" or the "Mexican Dealer Manager"), with Indeval,
and the Mexican Receiving Agent must receive a properly completed and duly
executed letter from the Indeval participant who tendered your Shares and CPOs
into its account accepting the U.S. Offer (an "Acceptance Letter") prior to the
expiration date of the U.S. Offer. For more information see "The U.S.
Offer -- Procedure for tendering in the U.S. Offer -- Holders of Shares and
CPOs."

     Tenders by Holders of GDSs.  If you hold GDSs and you desire to tender all
or any portion of the GDSs, you should either (a) complete and sign the GDS
Letter of Transmittal or a copy thereof in accordance with the instructions
contained in the GDS Letter of Transmittal and mail or deliver the GDS Letter of
Transmittal, with original signatures, together with the Global Depositary
Receipts (the "GDRs") evidencing tendered GDSs and all other required documents
to the U.S. Receiving Agent in the U.S. Offer or tender such GDSs pursuant to
the procedure for book-entry transfer set forth under the caption "The U.S.
Offer -- Procedure for tendering in the U.S. Offer -- Holders of GDSs," or (b)
request your broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for you. If you have GDSs registered in the name of a
broker, dealer, commercial bank, trust company or other nominee you must contact
such person if you desire to tender such GDSs. If you desire to tender GDSs, the
GDRs evidencing such GDSs are not immediately available and you cannot deliver
such GDRs and all other required documents to the U.S. Receiving Agent by the
expiration of the U.S. Offer or you cannot comply with the procedures for
book-entry transfer on a timely basis, you may tender such GDSs pursuant to the
guaranteed delivery procedure set forth under the caption "The U.S.
Offer -- Procedure for tendering in the U.S. Offer -- Holders of GDSs."

     Settlement of U.S. Offer Price.  The purchase prices for the Shares, CPOs
and GDSs accepted for payment pursuant to the U.S. Offer will be paid in U.S.
dollars equivalent to the applicable Mexican peso price based on the U.S. dollar
to Mexican peso exchange rate calculated using the average of the exchange rates
reported on each of the five consecutive U.S. business days ending two U.S.
business days prior to the expiration date of the U.S. Offer by Reuters and
Bloomberg on their FXBENCH page as the New York closing rate for the exchange of
Mexican pesos and U.S. dollars (as so calculated, the "Applicable Exchange
Rate"). We will announce the Applicable Exchange Rate by a press release not
later than 9:00 a.m., New York City time, on the next U.S. business day after
the Applicable Exchange Rate is

                                       iii


determined. You will bear exchange rate risks and costs if you wish to convert
the currency received into another currency. If you hold Shares and CPOs and
wish to receive Mexican pesos for your Shares and CPOs instead of U.S. dollars,
you should tender your Shares and CPOs in the Mexican Offer and indicate your
election to receive the purchase prices in Mexican pesos. See Annex II to this
U.S. Offer to Purchase for a description of the procedures for participating in
the Mexican Offer.

     The term "U.S. business day" as used in this U.S. Offer to Purchase means
any day other than Saturday, Sunday or a U.S. federal holiday consisting of the
time period from 12:01 a.m. through 12:00 midnight, New York City time.

     The term "business day" means any day other than Saturday, Sunday or a U.S.
federal holiday and that is not a legal holiday in Mexico, consisting of the
time period from 12:01 a.m. through 12:00 midnight, New York City time.

     All references to "U.S. dollars," "$" and "US$" are to the United States
dollar and all references to "Mexican pesos," "pesos," and "Ps." shall mean the
currency which is presently legal tender in Mexico.

                                        iv


                               TABLE OF CONTENTS

                                                            
SUMMARY TERM SHEET..........................................     1
SPECIAL FACTORS.............................................     9
  Background of the Offers..................................     9
  Effect of the Offers......................................    12
  Recommendation of the Gemex Board.........................    14
  Position of PBG, BG LLC and Embotellador HM regarding
     fairness of the Offers and the reverse stock split.....    14
EXEMPTIONS REQUESTED FROM THE SECURITIES AND EXCHANGE
  COMMISSION................................................    21
FOREIGN CURRENCY............................................    21
FORWARD LOOKING STATEMENTS..................................    21
THE U.S. OFFER..............................................    22
  Terms of this U.S. Offer; Expiration Date.................    22
  Certain conditions to the U.S. Offer......................    23
  Acceptance for payment....................................    26
  Procedure for tendering in the U.S. Offer -- Holders of
     Shares and CPOs........................................    27
  Procedure for tendering in the U.S. Offer -- Holders of
     GDSs...................................................    28
  Withdrawal rights.........................................    31
  Extension of tender period; amendment and termination.....    31
  Representations and warranties of tendering security
     holders................................................    33
  Sources of funds..........................................    34
  Certain tax considerations................................    34
  Information Agent, Receiving Agents, U.S. Dealer Manager
     and other expenses.....................................    40
  Certain legal matters; regulatory approvals...............    41
  Our plans for Gemex; transactions and operations following
     the U.S. Offer.........................................    41
INFORMATION REGARDING GEMEX.................................    43
  General...................................................    43
  Capital stock.............................................    43
  Price range of Securities.................................    44
  Dividends.................................................    45
  Selected financial data of Gemex..........................    47
INFORMATION REGARDING PBG, BG LLC AND EMBOTELLADOR HM.......    52
PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS....    52
  Agreements related to Gemex's Securities..................    52
  Agreements and transactions between PBG and PepsiCo and
     its affiliates.........................................    57
  Agreements and transactions between Gemex and PepsiCo and
     its affiliates.........................................    58
ANNEX I -- INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
  OFFICERS OF EMBOTELLADOR HM, BG LLC, PBG AND PEPSICO......    60
ANNEX II -- PROCEDURES FOR TENDERING INTO THE MEXICAN
  OFFER.....................................................    70
ANNEX III -- RECONCILIATION NOTE............................    71



                                        v


                               SUMMARY TERM SHEET

     In the U.S. Offer, we are offering to purchase all the outstanding GDSs at
a price of Ps.106.38 per GDS, all the outstanding Shares held by persons who are
not Mexican residents at a price of Ps.5.91 per Share, and all the outstanding
CPOs held by persons who are not Mexican residents at a price of Ps.17.73 per
CPO, in each case in cash, less any withholding taxes and without interest
thereon. The following are some of the questions you, as a holder of GDSs or a
non-Mexican resident holder of Shares and CPOs, may have and answers to those
questions. We urge you to carefully read the remainder of this U.S. Offer and
the accompanying GDS Letter of Transmittal because information in this summary
is not complete and additional important information is contained in the
remainder of this U.S. Offer and the GDS Letter of Transmittal.

WHO IS OFFERING TO BUY MY SECURITIES?

     Our name is PBG Grupo Embotellador Hispano-Mexicano, S.L. We are a Spanish
limited liability company and an indirect majority-owned subsidiary of BG LLC,
the principal operating subsidiary of PBG in which PBG owns approximately 93% of
the equity interest and PepsiCo owns approximately 7%. PBG holds, indirectly,
the remaining interest in us. We were formed to make the Offers. As of August 9,
2002, approximately 42.7% of the voting capital stock of PBG was beneficially
owned by PepsiCo. According to Gemex's Annual Report on Form 20-F for the year
ended December 31, 2001, which was filed with the SEC on July 1, 2002 (the
"Annual Report"), PepsiCo also owned, directly or indirectly, approximately
34.4% of the total outstanding capital stock of Gemex as of June 26, 2002. All
of PepsiCo's Securities are deposited in a trust (the "Molina/PepsiCo Trust"),
which grants Mr. Molina the power to direct the voting of PepsiCo's Securities,
absent certain events, until December 31, 2002. However, during that time
PepsiCo has the right to approve specified decisions of Gemex's management. As a
result of PepsiCo's relationship with us and with Gemex, we may be deemed to be
an affiliate of Gemex under the Securities Exchange Act of 1934 (the "Exchange
Act") and the Offers commenced by us for all of the Shares, CPOs and GDSs will
constitute, if consummated, a "going-private transaction" within the meaning of
Rule 13e-3 promulgated under the Exchange Act. For more information regarding
us, BG LLC and PBG, see "Information Regarding PBG, BG LLC and Embotellador HM."
For more information concerning the Molina/PepsiCo Trust, see "Special Factors"
and "Past Contacts, Transactions, Negotiations and Agreements."

WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFERS?

     In the U.S. Offer, we are seeking to purchase all of the outstanding GDSs
of Gemex and all of the outstanding Shares and CPOs of Gemex held by persons who
are not Mexican residents. In the Mexican Offer, we are seeking to purchase all
Shares and CPOs, including those held by U.S. residents. For more information,
please see the section of this U.S. Offer captioned "The U.S. Offer -- Terms of
this U.S. Offer; Expiration Date."

HOW MUCH IS EMBOTELLADOR HM OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE
FORM OF PAYMENT?

     In the U.S. Offer we are offering to pay each Gemex security holder Ps.5.91
per Share, Ps.17.73 per CPO and Ps.106.38 per GDS, in each case in cash, less
any withholding taxes and without interest thereon. The purchase prices for the
Securities accepted for payment pursuant to the U.S. Offer will be the U.S.
dollar equivalent of the applicable Mexican peso price based on the Applicable
Exchange Rate.

     We may increase the purchase prices we are offering in this U.S. Offer for
any reason in our sole discretion. In addition, we may reduce the purchase
prices we are offering by the amount of all dividends for which a payment date
is announced or published by Gemex on or prior to the expiration date and which
is payable after the date of this U.S. Offer and prior to the date of purchase
of Securities pursuant to the Offers, if any. Under the Molina Agreement to
Tender and the PepsiCo Agreement to Tender, we agreed not to reduce the purchase
prices or change the form of consideration we are offering to pay in this U.S.
Offer for any other reason without the consent of Mr. Molina and PepsiCo.

                                        1


DO I HAVE TO PAY BROKERAGE FEES IF I CHOOSE TO TENDER MY SECURITIES?

     If you are the record owner of GDSs subject to this U.S. Offer and you
tender your GDSs in the U.S. Offer, you will not have to pay brokerage fees or
similar expenses. If you own your Securities through a broker or other nominee,
and your broker tenders your Securities on your behalf, your broker or nominee
may charge you a fee for doing so. If you are the record owner of Shares, you
must tender by book-entry delivery through an Indeval participant. You should
consult your broker or nominee to determine whether any charges will apply. For
more information, please see the section of this U.S. Offer captioned "The U.S.
Offer -- Terms of this U.S. Offer; Expiration Date."

DOES EMBOTELLADOR HM HAVE ANY AGREEMENTS WITH RESPECT TO THE OFFERS WITH ANY OF
GEMEX'S SECURITY HOLDERS?

     We and BG LLC entered into the PepsiCo Agreement to Tender with PepsiCo.
Under the PepsiCo Agreement to Tender, PepsiCo has agreed to tender, and to
cause its nominee identified in such agreement to tender, all of the outstanding
Securities owned directly or indirectly by PepsiCo and which may be acquired by
PepsiCo prior to the expiration date in the Offers, subject to its right to
accept more competitive offers. In addition, as it is strategically important
that we, a subsidiary of PBG, one of PepsiCo's anchor bottlers, purchase Gemex,
PepsiCo has agreed to pay us Ps.172.7 million in order to facilitate such
purchase and ensure a smooth ownership transition of Gemex. This payment will be
made before the completion of the Offers.

     We and BG LLC also entered into the Molina Agreement to Tender with Mr.
Molina. According to information in Gemex's Annual Report and an amendment to
Mr. Molina's Schedule 13D filed on September 18, 2002, Mr. Molina had beneficial
ownership over approximately 74.5% of the total capital stock of Gemex, as of
September 10, 2002, including (i) Shares and CPOs deposited by PepsiCo and its
subsidiaries in the Molina/PepsiCo Trust, and (ii) immediately exercisable
options held by Mr. Molina to buy series T shares of Gemex which are convertible
into CPOs. Without giving effect to PepsiCo's Shares and CPOs deposited in the
Molina/PepsiCo Trust and to Mr. Molina's options to buy series T shares of
Gemex, Mr. Molina owned, directly or indirectly, approximately 40.0% of the
total outstanding capital stock of Gemex, as of September 10, 2002. Under the
Molina Agreement to Tender, Mr. Molina has agreed to tender, and to cause his
affiliates identified in such agreement to tender, all of the outstanding
Securities owned by them and which may be acquired by them prior to the
expiration date in the Offers, subject to their right to accept more competitive
offers received at any time prior to or during the time the Offers remain
outstanding.

     The Molina Agreement to Tender contains representations and warranties
concerning transactions between Mr. Molina and his affiliates on the one hand,
and Gemex and its subsidiaries, on the other hand. Under the Molina Agreement to
Tender, Mr. Molina has agreed to put in escrow an amount in U.S. dollars
equivalent to approximately Ps.141.1 million at the Applicable Exchange Rate
from the proceeds he is entitled to receive in the Offers for his Securities
(not including the Shares and CPOs deposited by PepsiCo in the Molina/PepsiCo
Trust), as security for any indemnity obligations resulting from a breach by Mr.
Molina of such representations and warranties. Mr. Molina's indemnification
obligation with respect to his representations and warranties will not exceed
Ps.188.2 million, including the amount in escrow. However, there is no
limitation on the remedies available to us in the event of other breaches by Mr.
Molina of the Molina Agreement to Tender.

     The Molina Agreement to Tender and the PepsiCo Agreement to Tender contain
limitations on our ability to amend or extend the Offers, including limitations
on our ability to reduce the prices and the form of consideration we are
offering or the number of Securities sought in the Offers. For a detailed
description of the Molina Agreement to Tender and the PepsiCo Agreement to
Tender, see "Past Contacts, Transactions, Negotiations and Agreements" of this
U.S. Offer to Purchase.

                                        2


HOW WILL PAYMENT BE MADE FOR THE SECURITIES I TENDER?

     The purchase prices for the Securities accepted for payment pursuant to the
U.S. Offer will be the U.S. dollar equivalent of the applicable Mexican peso
price, based on the Applicable Exchange Rate. The purchase prices for the Shares
and CPOs tendered in the Mexican Offer will be paid, at the election of the
tendering holder, in Mexican pesos or in U.S. dollars equivalent to the Mexican
Peso price based on the Applicable Exchange Rate. However, individuals tendering
Shares and CPOs into the Mexican Offer will be entitled to elect to receive the
purchase prices in U.S. dollars only if they have an account in or outside
Mexico into which they can receive payment in U.S. dollars and the information
regarding such account has been provided to the custodian for their Shares and
CPOs. We will announce the Applicable Exchange Rate by a press release not later
than 9:00 a.m., New York City time, on the next U.S. business day after the
Applicable Exchange Rate is determined. If you choose to tender into the Mexican
Offer and elect to receive payment in Mexican pesos you will bear the risk of
any fluctuation in the exchange rate after the consummation of the Offers if you
later wish to convert such pesos into U.S. dollars. In the event that the
Mexican Offer is amended to increase the price offered for the Securities, we
will make a corresponding amendment to increase the price offered for the
Securities in the U.S. Offer.

     For purposes of the U.S. Offer, we will be deemed to have accepted for
payment tendered Securities when and if we give oral or written notice to the
U.S. Receiving Agent or the Mexican Receiving Agent, as the case may be, of our
acceptance of the tenders of such Securities. Payment for GDSs tendered in
certificated form and for Shares or CPOs tendered in book-entry form accepted
for payment pursuant to the U.S. Offer will be made by deposit of the purchase
prices with the U.S. Receiving Agent or the Mexican Receiving Agent, as the case
may be, which will act as your agent for the purpose of receiving payments from
us and transmitting such payments to you. Payment for GDSs tendered by
book-entry transfer will be made by crediting the account of the nominee holding
the GDSs on your behalf with The Depositary Trust Company. In all cases, payment
for Securities accepted for payment pursuant to the U.S. Offer will be made only
after timely receipt by the U.S. Receiving Agent or the Mexican Receiving Agent,
as the case may be, of all the documents required to effect a tender, duly
signed and executed by you or your nominee. For more information regarding
acceptance of tendered Securities for payment, see the discussion under the
caption "The U.S. Offer -- Acceptance for payment."

DOES EMBOTELLADOR HM HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?

     PBG intends to issue commercial paper in an amount of up to $1.2 billion
prior to the expiration date of the Offers. The commercial paper will bear
interest at a rate to be determined immediately prior to or on the date of
issuance. The proceeds of this issuance will be used to finance the Offers and
to refinance a portion of the indebtedness of Gemex following the consummation
of the Offers. As support for the commercial paper, PBG has entered into a
bridge revolving credit facility with Salomon Smith Barney Inc., Credit Suisse
First Boston Corporation and Deutsche Bank Securities Inc., as joint lead
arrangers, Citibank N.A., Credit Suisse First Boston, Cayman Islands Branch and
Deutsche Bank AG New York Branch, as joint syndication agents, and certain
lenders specified in the bridge revolving credit facility agreement, to provide
up to $1.2 billion. The bridge revolving credit facility is guaranteed by BG
LLC. Borrowings under the bridge revolving credit facility may be repaid and
reborrowed until April 30, 2003, when the term of the bridge revolving credit
facility expires. Borrowings will bear interest, at the option of PBG, at the
base rate (i.e., prime rate) of Credit Suisse First Boston or LIBOR plus an
applicable margin determined by reference to PBG's credit rating. The bridge
revolving credit facility is unsecured. PBG does not anticipate borrowing under
the bridge revolving credit facility unless and to the extent that it does not
issue commercial paper as described above.

     PBG, through BG LLC, will provide us with the funds raised by it to
purchase all the Securities validly tendered and not withdrawn in the Offers.
Any remaining funds necessary to consummate the Offers will be provided by BG
LLC from available cash or borrowings utilizing existing credit facilities of BG
LLC.

                                        3


     However, the Offers are not conditioned upon the receipt by PBG of the
proceeds of either such financing or the advance of such funds to BG LLC or
Embotellador HM. PBG expects to repay the commercial paper and/or the bridge
revolving credit facility, as the case may be, with the funds provided by BG LLC
from proceeds of a private placement of debt securities of BG LLC to be
completed after the consummation of the Offers. Up to $1.0 billion of debt
securities are expected to be guaranteed by PepsiCo.

IS THE FINANCIAL CONDITION OF EMBOTELLADOR HM RELEVANT TO MY DECISION TO TENDER
IN THE OFFER?

     Because the form of payment consists solely of cash for which we have
already arranged financing and because this U.S. Offer is not conditioned on our
ability to obtain financing, we do not think our financial condition is relevant
to your decision whether to tender in this U.S. Offer.

WHY IS THERE A SEPARATE MEXICAN OFFER?

     Gemex is a variable stock corporation organized under the laws of Mexico
whose Shares and CPOs are registered and traded in Mexico and whose GDSs are
registered and traded in the United States. Gemex is subject to Mexico's General
Rules Applicable to Disclosable Stock Acquisitions and Public Tender Offers.
These rules provide that any person or group that, directly or indirectly, seeks
to acquire control of a company whose securities are registered with the
Securities Registry of the CNBV, as is the case with Gemex, must do so in
compliance with prescribed tender offer procedures. In addition, Gemex has
security holders in these two countries, including its two principal security
holders, one of which, Mr. Molina, is an individual who is a citizen and a
resident of Mexico, and the other, PepsiCo, is a North Carolina corporation.
Under these circumstances we are required to have two separate offers in the
United States and Mexico.

     The terms and conditions of the two Offers are the same in all material
respects. While we intend to make the offer periods and settlement dates for the
Mexican Offer and for this U.S. Offer the same, it is possible that settlement
dates will be different due to requirements of applicable law and/or market
practice. There are no material advantages or disadvantages for tendering Shares
and CPOs in the Mexican Offer compared to tendering in the U.S. Offer.

WHO CAN PARTICIPATE IN THE U.S. OFFER?

     Holders of GDSs must tender their GDSs in the U.S. Offer. Holders of Shares
and CPOs who are not Mexican residents may tender their Shares and CPOs into
either the U.S. Offer or the Mexican Offer. Mexican residents must tender their
Shares and CPOs into the Mexican Offer. For more information, please see the
section of this U.S. Offer captioned "The U.S. Offer -- Terms of this U.S.
Offer; Expiration Date."

WHO CAN PARTICIPATE IN THE MEXICAN OFFER?

     All holders may tender their Shares and CPOs in the Mexican Offer. Holders
of Shares and CPOs who are not Mexican residents may tender their Shares and
CPOs into either the Mexican Offer or the U.S. Offer, but cannot tender their
Shares and CPOs into both the U.S. Offer and the Mexican Offer. If you hold
Shares and/or CPOs and you wish to participate in the Mexican Offer rather than
in the U.S. Offer, you should follow the instructions regarding the procedures
for tendering your Shares or CPOs into the Mexican Offer as set forth in the
Mexican Offer to Purchase, a description of which is enclosed as Annex II to
this U.S. Offer to Purchase. For more information, please see the section of
this U.S. Offer captioned "The U.S. Offer -- Terms of this U.S. Offer;
Expiration Date."

WHAT HAPPENS IF I HOLD GDSS AND I WANT TO PARTICIPATE IN THE MEXICAN OFFER?

     Holders of GDSs cannot tender GDSs directly in the Mexican Offer. If you
hold GDSs and you wish to participate in the Mexican Offer, you should contact
The Bank of New York, the depositary for the GDSs (the "Depositary"), at 101
Barclay Street, New York, New York, 10286, in order to convert your

                                        4


GDSs into CPOs, which may be tendered directly in the Mexican Offer. You will
have to pay a fee of $5.00 for each 100 GDSs converted. For more information,
please see the section of this U.S. Offer captioned "The U.S. Offer -- Terms of
this U.S. Offer; Expiration Date."

HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THIS U.S. OFFER?

     The U.S. Offer will expire at 5:00 p.m., New York City time (4:00 p.m.,
Mexico City time), on November 5, 2002, and you may tender your Securities which
are subject to this U.S. Offer until such expiration date, unless the U.S. Offer
is extended, in which case you will have until the new expiration date to tender
your Securities. Please be aware that if your Securities are held by a broker,
bank or other custodian, they may require advance notification before the
expiration date. For more information, please see the section of this U.S. Offer
captioned "The U.S. Offer -- Terms of this U.S. Offer; Expiration Date."

CAN THIS U.S. OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?

     We may extend the U.S. Offer when we are required to do so by applicable
laws and regulations. Under the Molina Agreement to Tender and the PepsiCo
Agreement to Tender, if on or prior to the initial expiration date the
conditions to either of the Offers set forth in the U.S. Offer under the caption
"The U.S. Offer -- Certain conditions to the U.S. Offer" and in the Mexican
Offer are satisfied, we may extend the expiration date of the Offers for a
period of not more than five business days after such initial expiration date,
solely to increase the number of Securities to be tendered in the Offers. If, on
the other hand, the conditions to either of the Offers are not satisfied or
waived by us on or prior to the initial expiration date, we are required to
extend the Offers until all such conditions have been satisfied or waived, but
not more than ten business days after the initial expiration date. In the event
that the conditions to either of the Offers are still not satisfied or waived by
us, we have the right, at our sole discretion, to terminate the Offers after
such ten business days extension has expired or to further extend the Offers for
an additional ten business days. Under the Molina Agreement to Tender and the
PepsiCo Agreement to Tender, an extension of the Offers for any other reason or
under any other circumstances requires the consent of Mr. Molina and PepsiCo,
respectively, unless such extension is required by applicable laws and
regulations. For more information regarding an extension of the U.S. Offer see
the discussion under the caption "The U.S. Offer -- Extension of tender period,
amendment and termination."

HOW WILL I BE NOTIFIED IF THIS U.S. OFFER IS EXTENDED?

     If we extend the U.S. Offer, we will inform the Information Agent and the
U.S. Dealer Manager of that fact and will make a public announcement of the
extension by means of a press release to the Dow Jones News service, not later
than 9:00 a.m., New York City time, on the U.S. business day after the day on
which the U.S. Offer was scheduled to expire. Any notice regarding the extension
of the Mexican Offer will be given in accordance with Mexican regulations. For
more information regarding an extension of the U.S. Offer, see the discussion
under the caption "The U.S. Offer -- Extension of tender period, amendment and
termination."

WHAT ARE THE CONDITIONS TO THE U.S. OFFER?

     We will not be required to accept Securities for payment if (i) less than
90% of all of the outstanding capital stock of Gemex (including shares
represented by CPOs and GDSs) on the expiration date, is tendered in the Offers
on or prior to the expiration date and not withdrawn, (ii) less than all of the
Securities of Gemex owned, directly or indirectly, or which may be acquired on
or before the expiration date, by PepsiCo and its nominee identified in the
PepsiCo Agreement to Tender are tendered in the Offers and not withdrawn, (iii)
less than all of the Securities of Gemex owned, directly or indirectly, or which
may be acquired on or before the expiration date, by Mr. Molina and his
affiliates identified in the Molina Agreement to Tender are tendered in the
Offers and not withdrawn, (iv) the conditions to the Mexican Offer have not been
satisfied or waived on or before the expiration date of the Mexican Offer or the
Mexican Offer has been terminated without the purchase of any Securities, or (v)
the other conditions

                                        5


set forth under the caption "The U.S. Offer -- Certain conditions to the U.S.
Offer" are not satisfied or waived at any time on or prior to the expiration
date of the U.S. Offer.

WHAT ARE THE CONDITIONS TO THE MEXICAN OFFER?

     The Mexican Offer is subject to substantially similar conditions as the
U.S. Offer.

I HOLD CERTIFICATES REPRESENTING GEMEX GDSS. HOW DO I PARTICIPATE IN THIS U.S.
OFFER?

     If you hold GDRs representing GDSs, complete and sign the GDS Letter of
Transmittal and send it, together with the GDRs evidencing your GDSs and any
other required documents, to the U.S. Receiving Agent at one of the addresses
set forth on the back cover of this U.S. Offer to Purchase before the expiration
of this U.S. Offer. The GDS Letter of Transmittal is enclosed with this U.S.
Offer to Purchase and is also available from the Information Agent. Do NOT send
your GDRs to us, PBG, BG LLC, Gemex, the Mexican Receiving Agent, the Mexican
Dealer Manager, the U.S. Dealer Manager or the Information Agent. For more
information about the procedure for tendering GDSs in the U.S. Offer, see the
discussion under the caption "The U.S. Offer -- Procedure for tendering in the
U.S. Offer -- Holders of GDSs."

I HOLD GEMEX GDSS IN BOOK-ENTRY FORM. HOW DO I PARTICIPATE IN THIS U.S. OFFER?

     If you hold Gemex GDSs in book-entry form, instruct your broker or
custodian to arrange, before the expiration date of this U.S. Offer, for the
book-entry transfer of your GDSs into the U.S. Receiving Agent's account at The
Depository Trust Company, commonly known as DTC, and to deliver an agent's
message to the U.S. Receiving Agent via DTC's confirmation system confirming
that you have received and agree to be bound by the terms of the U.S. Offer. For
more information about the procedures for tendering GDSs in the U.S. Offer, see
the discussion under the caption "The U.S. Offer -- Procedure for tendering in
the U.S. Offer -- Holders of GDSs."

WHAT HAPPENS IF I AM NOT ABLE TO PROVIDE THE U.S. RECEIVING AGENT WITH ALL THE
DOCUMENTS REQUIRED FOR THE TENDER OF GDSS?

     If you cannot provide the U.S. Receiving Agent with all required documents
prior to the expiration date of the U.S. Offer, you may obtain additional time
to do so by submitting, prior to such expiration date, a Notice of Guaranteed
Delivery to the U.S. Receiving Agent, which must be certified by an eligible
guarantor institution, guaranteeing that all required documents for a valid
tender of your GDSs will be received by the U.S. Receiving Agent within three
New York Stock Exchange, or NYSE, trading days after the U.S. Receiving Agent
has received your Notice of Guaranteed Delivery. For more information about the
procedures for tendering GDSs in the U.S. Offer, see the discussion under the
caption "The U.S. Offer -- Procedure for tendering in the U.S. Offer -- Holders
of GDSs."

I AM A U.S. PERSON AND I HOLD SHARES AND CPOS OF GEMEX. HOW DO I PARTICIPATE IN
THE U.S. OFFER?

     If you are a U.S. person and either a record holder or beneficial owner of
Shares or CPOs, and you wish to tender your Shares or CPOs in the U.S. Offer,
you must do so by book-entry transfer. You will not be able to tender in the
U.S. Offer any Shares in certificated form. If you hold Shares in certificated
form and you wish to participate in the U.S. Offer you need to promptly contact
a broker, dealer, bank, trust company, financial institution or other nominee
who is a participant in the book-entry transfer system of Indeval and arrange to
have such a nominee hold the Shares on your behalf in book-entry form.

     In order for a book-entry transfer to constitute a valid tender of your
Shares and CPOs in the U.S. Offer, the Shares and CPOs must be tendered by your
nominee who is an Indeval participant into the account of the Mexican Receiving
Agent with Indeval and the Mexican Receiving Agent must receive a properly
completed and duly executed Acceptance Letter from the Indeval participant who
tendered your Shares and CPOs into its account prior to the expiration date of
the U.S. Offer. Since this procedure is identical to that by which other Gemex
security holders participate in the Mexican Offer, such nominee

                                        6


may wish to refer to the instructions for tendering into the Mexican Offer
attached as Annex II to this U.S. Offer to Purchase.

     For more information about the procedure for tendering Shares and CPOs in
the U.S. Offer, see the discussion under the caption "The U.S.
Offer -- Procedure for tendering in the U.S. Offer -- Holders of Shares and
CPOs."

HOW DO I WITHDRAW PREVIOUSLY TENDERED SECURITIES?

     To withdraw Securities previously tendered, you or your nominee must
deliver a written notice of withdrawal, or a facsimile of one, with the required
information to the U.S. Receiving Agent or instruct your broker or other nominee
to deliver such notice of withdrawal to the Mexican Receiving Agent, as the case
may be, while you still have the right to withdraw the Securities. For more
information regarding withdrawal rights and procedures, see the discussion under
the caption "The U.S. Offer -- Withdrawal rights."

UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SECURITIES?

     You can withdraw tendered Securities at any time until the U.S. Offer has
expired and, if we have not by December 6, 2002 agreed to accept your Securities
for payment, you can withdraw them at any time after such time until we accept
such Securities for payment. For more information regarding withdrawal rights
and procedures, see the discussion under the caption "The U.S.
Offer -- Withdrawal rights."

WILL GEMEX CONTINUE AS A PUBLIC COMPANY?

     Following the consummation of the Offers, we intend to cause Gemex to
deregister its Shares and CPOs from the Registro Nacional de Valores, or "RNV,"
the Mexican National Securities Registry, to delist its Shares and CPOs from the
Mexican Stock Exchange and to cease being subject to the reporting requirements
applicable to publicly traded companies in Mexico. Following the consummation of
the Offers, we also intend to cause Gemex to delist the GDSs from The New York
Stock Exchange, which will result in the de-registration of the GDSs and the
underlying CPOs, Shares, D Shares and L Shares under Section 12(b) of the
Exchange Act. In the event that, following the consummation of the Offers, there
will still be any Securities outstanding other than those owned by us, then, to
the extent required under Mexican regulations, prior to the deregistration of
the Shares and CPOs from the RNV and their delisting from the Mexican Stock
Exchange, we will deposit in a trust for a period of two years the funds, in
Mexican pesos, that would be required to purchase all the Shares and CPOs
outstanding after the Offers (assuming conversion of any remaining GDSs into
CPOs), other than those owned by us, at the same Mexican peso price paid in the
Mexican Offer. Immediately after the de-listing of Gemex's Shares and CPOs from
the Mexican Stock Exchange, we intend to cause Gemex to carry out a reverse
stock split in order to eliminate for cash, at the same Mexican peso price paid
in the Mexican Offer, the outstanding Securities held by any remaining security
holders other than us in accordance with Mexican law. However, there can be no
assurance as to when or if such steps will occur. For more information, see the
discussion under the caption "Special Factors -- Effect of the Offers."

DO YOU, BG LLC AND PBG SUPPORT THE OFFERS?

     Yes. We, BG LLC and PBG believe that the Offers and reverse stock split are
fair to the security holders of Gemex, other than Mr. Molina, PepsiCo and their
respective affiliates. This belief, however, should not be construed as a
recommendation to security holders of Gemex to tender in the Offers. For more
information, see the discussion under the caption "Special Factors -- Position
of PBG, BG LLC and Embotellador HM regarding fairness of the Offers and the
reverse stock split."

                                        7


DOES GEMEX SUPPORT THE OFFERS?

     Yes. According to Gemex's solicitation/recommendation statement on Schedule
14D-9, at a meeting of the Board of Directors of Gemex on October 3, 2002, the
Board, by a unanimous vote of all directors and alternate directors present,
which included a majority of the directors of Gemex who are not Gemex employees,
determined that the Offers are fair to the security holders of Gemex, other than
PepsiCo, Mr. Molina and their respective affiliates, and determined to recommend
to the security holders of Gemex, other than Mr. Molina, PepsiCo and their
respective affiliates, that they tender their Securities in the Offers. For more
information, see the discussion under the caption "Special
Factors -- Recommendation of the Gemex Board."

IF I DECIDE NOT TO TENDER, HOW WILL THE U.S. OFFER AFFECT MY SECURITIES?

     The purchase of Securities pursuant to the U.S. Offer will substantially
reduce the number of Gemex security holders, and the number of Securities which
are still in the hands of the public after the consummation of the Offers may be
so small that there will no longer be an active public trading market (or,
possibly, there may not be any public trading market) for the Securities. We
also intend to take the actions described in the answer to the question above on
whether Gemex will continue as a public company, although as noted above, the
timing of such actions is not certain. For more information, see the discussion
under the caption "Special Factors -- Effect of the Offers."

WHAT ARE THE TAX CONSEQUENCES OF TENDERING MY SECURITIES IN THE U.S. OFFER?

     The sale of Securities for cash pursuant to the U.S. Offer will be a
taxable transaction for United States federal income tax purposes and possibly
for state, local and foreign income tax purposes as well. In general, a U.S.
Holder (as defined under the caption "Certain tax considerations") who sells
Securities pursuant to the U.S. Offer will recognize gain or loss for United
States federal income tax purposes equal to the difference, if any, between the
amount of cash received and the holder's adjusted tax basis in the Securities
sold pursuant to the U.S. Offer. Gain or loss will be determined separately for
each block of Securities (i.e., Securities acquired at the same cost in a single
transaction) tendered pursuant to the U.S. Offer.

     Payments for Shares and CPOs (but not GDSs) purchased in the Offers will be
subject in all cases to a 5% Mexican withholding tax on the gross proceeds of
the sale. See "The U.S. Offer -- Certain tax considerations -- Material Mexican
income tax consequences" for a discussion of this withholding tax and
instructions for a holder to obtain a refund under specified circumstances.

     For a discussion of Mexican tax consequences and further discussion of U.S.
tax consequences to U.S. security holders tendering their Securities in the U.S.
Offer, see under the caption "The U.S. Offer -- Certain tax considerations."

WHAT IS THE MARKET VALUE OF MY SHARES, CPOS AND GDSS AS OF A RECENT DATE?

     The last trade of Shares reported on the Mexican Stock Exchange occurred on
May 4, 2001. The closing price of the Shares at that time was Ps.5.00 per Share.

     On May 7, 2002, the last trading day before PBG announced this U.S. Offer,
the closing price of CPOs reported by Bloomberg was Ps.14.90 per CPO. On October
4, 2002, the last trading day before we commenced this U.S. Offer, the closing
price of CPOs reported by Bloomberg was Ps.17.00 per CPO.

     On May 7, 2002, the last trading day before PBG announced this U.S. Offer,
the closing price of GDSs reported by Bloomberg was $9.20, or PS.87.30, per GDS,
using the exchange rate of Ps.9.4890 per US$1.00 reported by Reuters and
Bloomberg on their FXBENCH Page as the New York closing rate on May 7, 2002. On
October 4, 2002, the last trading day before we commenced this U.S. Offer, the
closing price of GDSs reported on the NYSE was $10.08, or Ps.102.80, per GDS,
using the exchange rate of Ps.10.1985 per US$1.00 reported by Reuters and
Bloomberg on their FXBENCH Page as the New York closing rate on October 4, 2002.

                                        8


     You should obtain a recent quotation for Shares, CPOs and GDSs in deciding
whether to tender your Shares, CPOs and/or GDSs. See further under the caption
"Information Regarding Gemex -- Price range of Securities".

WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE U.S. OFFER?

     If you have any questions about the procedure for tendering Shares and CPOs
into the U.S. Offer, please contact the Information Agent at its address as it
appears on the back cover of this U.S. Offer to Purchase. If you have any
questions about the procedure for tendering GDSs into the U.S. Offer, please
contact the Information Agent or the U.S. Receiving Agent at their respective
addresses as they appear on the back cover of this U.S. Offer to Purchase.

     THIS U.S. OFFER TO PURCHASE AND THE RELATED GDS LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THIS U.S. OFFER.

                                SPECIAL FACTORS

BACKGROUND OF THE OFFERS

     Gemex is a Mexican holding company that, through its bottling and
distribution subsidiaries, produces, sells and distributes a variety of soft
drink products under the Pepsi-Cola, Pepsi Light, Pepsi Max, Pepsi Limon,
Mirinda, 7UP, Diet 7UP, Kas, Mountain Dew, Power Punch and Manzanita Sol
trademarks pursuant to exclusive franchise and bottling arrangements with
PepsiCo and various affiliates of PepsiCo. Gemex also produces, sells and
distributes a variety of non-PepsiCo products such as soft drinks under the
trademark Squirt and purified and mineral water under the trademarks Electropura
and Garci Crespo. According to publicly available information concerning Gemex
filed with the SEC, including its Annual Report, Gemex is currently the largest
bottler outside the United States of PepsiCo's soft drink products based on
sales volume. Through its ownership in the Electropura brand, Gemex is also the
largest producer of bottled and jug water in Mexico.

     In October 1995, Gemex entered into a master joint venture agreement with
PepsiCo, certain of PepsiCo's subsidiaries and Mr. Enrique C. Molina Sobrino,
Gemex's Chairman of the Board, Chief Executive Officer and largest security
holder. Under the master joint venture agreement, PepsiCo designated Gemex as
PepsiCo's exclusive anchor bottler in Mexico and granted Gemex the rights to
develop and purchase soft drink bottling franchises within designated
territories in Mexico. In addition, PepsiCo contributed to Gemex approximately
$154 million in cash, its ownership in its wholly-owned bottling operations in
Central Mexico and its minority interest in certain bottling subsidiaries of
Gemex in Southeast Mexico, to become a major security holder of Gemex, holding
together with its affiliates, directly or indirectly as of the date of this U.S.
Offer, approximately 34.4% of the outstanding capital stock of Gemex.

     Under the terms of the master joint venture agreement, Mr. Molina and
PepsiCo formed the Molina/PepsiCo Trust, into which Mr. Molina deposited a
portion of his CPOs and into which PepsiCo and its subsidiaries deposited all of
their Shares and CPOs. The Molina/PepsiCo Trust currently owns approximately
63.4% of the outstanding Shares, including Shares represented by CPOs and GDSs.
It was agreed by the parties to the joint venture agreement that during Phase I
of the agreement, commencing on October 6, 1995 and ending on the earlier of
December 31, 2002, Mr. Molina's retirement, disability or death, or the
occurrence of certain events, including Mr. Molina's withdrawal of any of his
Shares or CPOs from the Molina/PepsiCo Trust, Mr. Molina will have overall
management control of Gemex and the right to direct the voting of all Shares and
CPOs in the Molina/PepsiCo Trust, including Shares and CPOs deposited in the
Molina/PepsiCo Trust by PepsiCo and its subsidiaries.

     During Phase I of the agreement, PepsiCo does not have the right to
withdraw any Shares or CPOs from the Molina/PepsiCo Trust. As a result,
according to information provided in Gemex's Annual Report

                                        9


and an amendment to Mr. Molina's Schedule 13D filed with the SEC on September
18, 2002, Mr. Molina currently (i) beneficially owns approximately 74.5% of the
capital stock of Gemex as of September 10, 2002, including (A) Shares and CPOs
which were deposited by PepsiCo and its subsidiaries in the Molina/PepsiCo
Trust, and (B) immediately exercisable options held by Mr. Molina to buy series
T shares of Gemex which are convertible into CPOs, (ii) controls more than 50%
of the voting power of Gemex, including Shares and CPOs of PepsiCo and its
subsidiaries, and (iii) is able to appoint a majority of the directors of Gemex
and to determine the outcome of substantially all actions requiring shareholder
approval. However, during Phase I PepsiCo has the right to approve certain
management decisions.

     During Phase II of the joint venture agreement scheduled to commence on
January 1, 2003, and thereafter, PepsiCo will have the right to direct the
voting of the Shares and CPOs held by the Molina/ PepsiCo Trust, including those
deposited by Mr. Molina, thereby giving PepsiCo beneficial ownership of
approximately 45.8% of the outstanding capital stock and control of over 50% of
the voting power of Gemex. However, during the first three years of Phase II and
for so long as Mr. Molina owns a minimum number of Gemex's Securities, Mr.
Molina will have the right to approve certain management decisions.

     Without giving effect to PepsiCo's Shares and CPOs deposited into the
Molina/PepsiCo Trust and Mr. Molina's options to buy series T shares of Gemex,
Mr. Molina owned, directly or indirectly, approximately 40.0% of the total
outstanding capital stock of Gemex, as of September 10, 2002.

     PBG was incorporated in Delaware in January 1999 as a wholly-owned
subsidiary of PepsiCo to effect the separation of most of PepsiCo's
company-owned bottling businesses. PBG became a publicly-traded company on March
31, 1999. PBG is the world's largest manufacturer, seller and distributor of
Pepsi-Cola beverages and has the exclusive right to manufacture, sell and
distribute Pepsi-Cola beverages in all or a portion of 41 U.S. states, the
District of Columbia, eight Canadian provinces, Spain, Greece, Russia and
Turkey. In some of its territories, PBG also has the right to manufacture, sell
and distribute soft drink products of other companies, including Dr. Pepper and
All Sport in the United States. PBG operates its business through BG LLC, its
principal operating subsidiary, in which PBG owns approximately 93% of the
equity interest and PepsiCo owns approximately 7%. As of August 9, 2002, PepsiCo
beneficially owned approximately 37.6% of the outstanding PBG common stock and
100% of the outstanding PBG Class B common stock, together representing
approximately 42.7% of the voting power of all classes of PBG's voting stock.
Neither we nor PBG or BG LLC currently own any capital stock of Gemex.

     The purpose of the Offers is to acquire 100% of the capital stock of Gemex
through an affiliate of PBG, making Gemex an indirect subsidiary of PBG, and to
obtain immediate control over the voting power of securities of Gemex.

     In a number of meetings in February and March 2001 between representatives
of PBG and PepsiCo, PepsiCo raised the possible acquisition by PBG of several
foreign bottlers of PepsiCo products, including Gemex. Those acquisitions would
be consistent with PepsiCo's business strategy not to have direct ownership and
management control of the bottling companies that are the franchise holders of
the PepsiCo trademarks and products and rather to manage the bottling business
through a limited number of independent anchor bottler companies. During this
period, PBG presented to PepsiCo its preliminary financial analysis of Gemex
based on publicly available information, and PBG requested additional financial
information from PepsiCo.

     In May 2001, a representative of PBG met with Mr. Molina and an advisor to
express PBG's interest in a possible transaction in which PBG would acquire
control of Gemex. Discussions and analysis by PBG of a possible transaction
ensued in the following months. In November 2001 PBG met again with Mr. Molina
and an advisor to reconfirm PBG's interest in a transaction. During the first
two weeks of December 2001, a management team from PepsiCo and PBG met in Mexico
City with Mr. Molina and Gemex management to gain an understanding of the
business.

     Based on information available to it in January 2002, PBG determined a
proposed gross enterprise value of Gemex and its business. Based on that
determination, on January 29, 2002, representatives of PBG preliminarily
indicated to Mr. Molina, in his capacity as the controlling security holder of
Gemex,

                                        10


PBG's interest in purchasing all the outstanding capital stock of Gemex at a
price per share based on a gross enterprise value of Gemex of approximately
Ps.10.1 billion, subject to adjustments. In mid-February 2002, PBG indicated
that it would be willing to increase its proposed gross enterprise value to
approximately Ps.10.5 billion.

     During February and March 2002, Mr. Molina, an advisor and representatives
of PBG continued to discuss PBG's interest in a potential acquisition of Gemex.
In mid-April PBG notified Mr. Molina that it would be willing to increase its
proposed gross enterprise value of Gemex to approximately Ps.10.9 billion. In
late April and early May 2002, PBG and Mr. Molina continued their earlier
discussions. During the January to May 2002 period, PBG made the same
indications of interest to PepsiCo contemporaneously with doing so to Mr. Molina
and engaged in discussions with PepsiCo with respect thereto. During the same
time period, PepsiCo and PBG also discussed the franchisor/franchisee
arrangements that would be put in place with Gemex following the completion of
the Offers. As a result of these discussions, PepsiCo and PBG reached a general
understanding that such arrangements would remain substantially the same as
those in place prior to the completion of the Offers, except that PepsiCo agreed
to increase its marketing support to Gemex in an amount equal to Gemex's
scheduled concentrate price increase.

     On May 3, 2002, PBG and Gemex executed a written confidentiality agreement.
In the first week of May 2002, PBG reached a non-binding agreement with Mr.
Molina and PepsiCo regarding the terms of a possible acquisition of all the
outstanding capital stock of Gemex by PBG, which terms were reflected in a term
sheet, dated May 7, 2002. The term sheet provided that the gross enterprise
value of Gemex for the purpose of the Offers would be approximately Ps.11.9
billion, subject to certain adjustments for working capital and indebtedness
levels and liabilities identified during a due diligence review. It also
provided that Mr. Molina would agree to tender in the Offers all the Securities
owned by him, directly or indirectly, not including Shares and CPOs deposited by
PepsiCo and its subsidiaries in the Molina/PepsiCo Trust. After the close of
business on May 7, 2002, PBG issued a press release announcing the non-binding
agreement to acquire Gemex and Gemex issued a press release announcing that it
had been informed of the agreement.

     In light of changes in Mexico's tender offer regulations and tax laws, it
was determined by PBG that the preferred form of transaction would be a tender
offer by PBG, through an acquisition subsidiary, for all of the outstanding
capital stock of Gemex. Gemex, as a company organized under the laws of Mexico,
is subject to the General Rules Applicable to Disclosable Stock Acquisitions and
Public Tender Offers. These rules provide that any person or group that,
directly or indirectly, seeks to acquire control of a company whose securities
are registered with the CNBV must do so in compliance with prescribed tender
offer procedures. In particular, these rules provide that such tender offer must
be for 100% of the outstanding capital stock of the issuer. In addition, Mexican
tax laws provide certain tax benefits to individuals who sell capital stock
owned by them in a tender offer. Since Gemex's capital stock is listed for
trading both in the United States and in Mexico, PBG determined that dual and
simultaneous tender offers in Mexico and in the U.S. for all of the capital
stock of Gemex would be necessary.

     During June and July 2002, PBG and its advisors conducted legal and
business due diligence of Gemex in Mexico and began preparing the documentation
required to effect the Offer. In June 2002, BG LLC formed Embotellador HM, to
purchase the Securities in the Offers.

     Following the completion of the due diligence review in July 2002, in late
July and early August 2002 PBG discussed with Molina and PepsiCo possible
adjustments to the enterprise value of Gemex provided for in the term sheet. On
August 13, 2002, PBG, Mr. Molina and PepsiCo agreed on an enterprise value of
approximately Ps.11.6 billion, subject to approval of the Board of Directors of
PBG. In addition, as it is strategically important that we, a subsidiary of PBG,
one of PepsiCo's anchor bottlers, purchase Gemex, PepsiCo has agreed to make a
payment of Ps.172.7 million to us in order to facilitate the purchase of Gemex
and ensure a smooth ownership transition of Gemex. This payment will be made
before the completion of the Offers. On August 13, 2002, PBG issued a press
release announcing its agreement with Mr. Molina and PepsiCo and Gemex issued a
press release announcing that it had been informed of that agreement.

                                        11


     On September 5, 2002, the Board of Directors of PBG held a meeting to
consider the Offers. At the meeting the Board received a description of the
transactions contemplated by the Offers and the related agreements. It was
determined that PBG believes that the Offers and the reverse stock split are
fair to the security holders of Gemex other than PepsiCo, Mr. Molina and their
respective affiliates. At the meeting, the Board of Directors of PBG also
reviewed a fairness opinion provided to it by Salomon Smith Barney Inc., PBG's
financial advisor, regarding the fairness, from a financial point of view, to
PBG of the aggregate consideration to be paid by PBG in the Offers, and received
the recommendation of the Audit and Affiliated Transactions Committee of PBG to
approve the PepsiCo Agreement to Tender and the purchase of PepsiCo's Securities
pursuant to the Offers. The Board of Directors of PBG approved the Offers and
the related agreements. We and BG LLC also believe that the Offers and reverse
stock split are fair to the security holders of Gemex other than PepsiCo, Mr.
Molina and their respective affiliates.

     On October 2 and 3, 2002, PBG and Mr. Molina had discussions and reached an
understanding on the amount of net debt of Gemex that would be used for
calculating the equity value of Gemex, resulting in offer prices of Ps.5.91 per
Share, Ps.17.73 per CPO and Ps.106.38 per GDS.

     According to Gemex's solicitation/recommendation statement on Schedule
14D-9, at a meeting held on October 3, 2002, the Board of Directors of Gemex was
presented a description of the terms of the Offers. In addition, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), an unaffiliated financial
advisor to the Company, presented a financial analysis of the terms of the
Offers. Merrill Lynch also delivered its opinion to the Gemex Board to the
effect that, as of October 3, 2002, and based upon and subject to the factors
and assumptions set forth in the opinion, the consideration to be received by
the holders of the Securities, other than PepsiCo, Mr. Molina and their
respective affiliates, was fair from a financial point of view to such holders.

     According to Gemex's solicitation/recommendation statement on Schedule
14D-9, at its October 3, 2002 meeting, the Gemex Board, by a unanimous vote of
all directors and alternate directors present, which included a majority of the
directors of Gemex who are not Gemex employees, determined that the Offers are
fair to the holders of Securities, other than PepsiCo, Mr. Molina and their
respective affiliates, and determined to recommend that the holders of
Securities, other than PepsiCo, Mr. Molina and their respective affiliates,
accept the Offers and tender their Securities in the Offers.

     On October 4, 2002, the Molina Agreement to Tender, the PepsiCo Agreement
to Tender and the escrow arrangement with Mr. Molina were all completed and
executed by the parties thereto. The commencement of the Offers was announced
promptly thereafter.

EFFECT OF THE OFFERS

     Trading and information.  We are an indirect subsidiary of BG LLC, the
principal operating subsidiary of PBG. As of August 9, 2002, approximately 42.7%
of the voting capital stock of PBG was owned by PepsiCo. According to Gemex's
Annual Report, PepsiCo also owned as of June 26, 2002, directly or indirectly,
approximately 55.8% of the voting capital stock and approximately 34.4% of the
total capital stock of Gemex. As a result, we may be deemed to be an affiliate
of Gemex under the Exchange Act and the Offers commenced by us for all of the
Shares, CPOs and GDSs will constitute, if consummated, a "going-private
transaction" within the meaning of Rule 13e-3 promulgated under the Exchange
Act. Following the consummation of the U.S. Offer, we intend to cause Gemex to
delist the GDSs from the NYSE, which will result in the de-registration of the
GDSs and the underlying CPOs, Shares, D Shares and L Shares under Section 12(b)
of the Exchange Act. This de-registration would make certain provisions of the
Exchange Act, such as the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions and the prohibition on personal loans to
directors and executive officers, no longer applicable to Gemex. Following the
consummation of the Mexican Offer, we also intend to cause Gemex to deregister
the Shares and CPOs from the RNV and to delist them from the Mexican Stock
Exchange and to cease being subject to the reporting requirements applicable to
publicly traded companies in Mexico. The consummation of the Offers will also
substantially reduce the number of security holders, and the number of Shares,
CPOs and GDSs which will still be in the hands of the public

                                        12


may be so small that there will no longer be an active public trading market
(or, possibly, there may not be any public trading market) for the Shares, CPOs
or the GDSs.

     In the event that, following the consummation of the Offers, there will
still be any Securities outstanding other than those owned by us, then, to the
extent required under Mexican regulations, prior to the deregistration of the
Shares and CPOs from the RNV and their delisting from the Mexican Stock
Exchange, we will deposit in a trust for a period of two years the funds, in
Mexican pesos, that would be required to purchase all the Shares and CPOs
outstanding after the Offers (assuming conversion of any remaining GDSs into
CPOs), other than those owned by us, at the same Mexican peso prices paid in the
Mexican Offer. Immediately after the de-listing of Gemex's Shares and CPOs from
the Mexican Stock Exchange, we intend to cause Gemex to carry out a reverse
stock split in order to eliminate for cash, at the same Mexican peso price paid
in the Mexican Offer, the outstanding Securities held by any remaining security
holders other than us in accordance with Mexican law.

     As soon as practicable following the consummation of the Offers and the
reverse stock split, PBG and BG LLC intend to cause us to merge with and into
Gemex, which will be the surviving entity of such merger. In addition, in
accordance with the Molina Agreement to Tender, upon the purchase of the
Securities pursuant to the Offers, Mr. Molina's employment agreement with Gemex
and all arrangements and understandings related to it will terminate, and upon
such termination Mr. Molina agrees to release Gemex and its affiliates from any
and all claims and liabilities arising from his employment with Gemex and/or its
subsidiaries. Under the Molina Agreement to Tender, we acknowledge that Mr.
Molina will be entitled to receive approximately Ps.141.1 million in full
satisfaction of his rights under Gemex's executive pension plan and all other
statutory and severance benefits following the termination of his employment
with Gemex and agree to cause the pension plan to remit such amount to Mr.
Molina in accordance with the terms of the pension plan. We also intend to cause
the election of new directors to Gemex's Board of Directors at a shareholders
meeting to be held promptly after the consummation of the Offers and to appoint
certain new officers to Gemex.

     Benefits and detriments.  The Offers provide security holders of Gemex with
the following benefits:

     - The cash consideration payable per CPO and per GDSs in the Offers
       represent premiums to the closing prices for the respective Securities on
       May 7, 2002, the last trading day prior to public announcement of the
       Offers and on October 4, 2002, the last trading day prior to the
       commencement of the Offers;

     - immediate liquidity for their shares without the usual transaction costs
       associated with open market sales;

     - Mexican tax laws provide certain tax benefits to individuals who sell
       capital stock owned by them in a tender offer and in compliance with
       Mexican law requirements; and

     - the Offers will eliminate the risk to those security holders of a
       possible future decline in Gemex's business or the market value of the
       Securities.

     However, there are also some detriments to selling security holders:

     - security holders will cease to participate in any future growth of Gemex;

     - security holders may incur taxable gain from the sale of the Securities
       in either of the Offers; and

     - the price per Security offered in the Offers may be lower than the market
       price of the Securities immediately prior to the date the Offers are
       consummated.

     On the other hand, however, the consummation of the Offers is expected to
eliminate the public market for Gemex's Securities and security holders of Gemex
who choose not to tender in the Offers will be adversely affected by the
decreased liquidity, market float and public information about Gemex.

                                        13


     U.S. federal tax consequences.  The tender of Securities in the U.S. Offer
may result in Mexican and U.S. federal tax consequences for the tendering
security holders. For a discussion regarding these consequences, see below under
the caption "The U.S. Offer -- Certain tax considerations".

RECOMMENDATION OF THE GEMEX BOARD

     According to Gemex's solicitation/recommendation statement on Schedule
14D-9, at a meeting of the Board of Directors of Gemex on October 3, 2002,
Merrill Lynch delivered an opinion to the Board of Directors of Gemex, dated
October 3, 2002, to the effect that, as of that date and based upon and subject
to the factors and assumptions set forth in the opinion, the consideration to be
received by the holders of the Securities, other than PepsiCo, Mr. Molina and
their respective affiliates, was fair, from a financial point of view, to those
holders. After considering, and based upon the opinion of Merrill Lynch and the
other factors set forth in Gemex's solicitation/recommendation statement on
Schedule 14D-9, the Board of Directors of Gemex by a unanimous vote of all
directors and alternate directors present at its October 3, 2002 meeting, which
included a majority of the directors of Gemex who are not Gemex employees,
determined that the Offers are fair to security holders of Gemex, other than
PepsiCo, Mr. Molina and their respective affiliates, and determined to recommend
that the security holders of Gemex, other than PepsiCo, Mr. Molina and their
respective affiliates, accept the Offers and tender their Securities in the
Offers. The full text of Merrill Lynch's October 3, 2002 fairness opinion, which
sets forth the assumptions made, matters considered and limitations on the
review undertaken by Merrill Lynch, is attached as an exhibit to Gemex's
solicitation/recommendation statement on Schedule 14D-9, which is being mailed
to you herewith.

     The Offers do not require approval by the security holders of Gemex. Under
Mexican law, there are no appraisal rights available for security holders of
Gemex.

POSITION OF PBG, BG LLC AND EMBOTELLADOR HM REGARDING FAIRNESS OF THE OFFERS AND
THE REVERSE STOCK SPLIT

     Fairness to shareholders of PBG.  Because of the relationship between
PepsiCo and PBG and between PepsiCo and Gemex, the Board of Directors of PBG
retained Salomon Smith Barney to render an opinion with respect to the fairness,
from a financial point of view, to PBG of the aggregate consideration to be paid
by PBG, through us, in the Offers. We, BG LLC and PBG believe that the
consideration to be paid pursuant to the Offers is fair to PBG and its
shareholders, other than PepsiCo and its affiliates. In addition, the Audit and
Affiliated Transactions Committee of the Board of Directors of PBG has approved
the purchase of the Securities held by PepsiCo and its affiliates, the form,
terms and conditions of the PepsiCo Agreement to Tender and the guarantee of up
to $1.0 billion expected to be provided by PepsiCo to BG LLC in connection with
the private placement of debt securities that BG LLC intends to consummate after
the completion of the Offers to repay PBG's $1.2 billion bridge loan and/or
commercial paper, as the case may be, as discussed under the caption "The U.S.
Offer -- Sources of funds."

     Opinion of Salomon Smith Barney.  Salomon Smith Barney was retained to act
as a financial advisor to PBG in connection with the Offers. On September 5,
2002, Salomon Smith Barney rendered an opinion to the PBG Board of Directors, to
the effect that, based upon and subject to the considerations and limitations
set forth in the opinion, its work described below and other factors deemed
relevant, as of that date, the aggregate consideration to be paid by PBG,
through us, pursuant to the Offers is fair, from a financial point of view, to
PBG.

     THE FULL TEXT OF SALOMON SMITH BARNEY'S OPINION, WHICH SETS FORTH, AMONG
OTHER THINGS, THE ASSUMPTIONS MADE, GENERAL PROCEDURES FOLLOWED, MATTERS
CONSIDERED AND LIMITS ON THE REVIEW UNDERTAKEN, IS FILED AS EXHIBIT (c)(1) TO
THE SCHEDULE TO. THE SUMMARY OF SALOMON SMITH BARNEY'S OPINION SET FORTH BELOW
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION.

                                        14


     In arriving at its opinion, Salomon Smith Barney, among other things:

     - reviewed drafts, dated August 15, 2002 and August 16, 2002, respectively,
       of agreements of PepsiCo and Mr. Molina to tender their Gemex shares to
       PBG pursuant to the Offers;

     - held discussions with certain senior officers, directors and other
       representatives and advisors of PBG and certain of its respective
       affiliates concerning the businesses, operations and prospects of Gemex;

     - examined certain publicly available business and financial information
       relating to Gemex as well as certain financial forecasts and other
       information and data for Gemex, which were provided to or otherwise
       discussed with Salomon Smith Barney by the management of PBG;

     - reviewed the financial terms of the Offers in relation to, among other
       things: current and historical market prices and trading volumes of the
       Securities; the historical and projected financial and operating data of
       Gemex; and the capitalization and financial condition of Gemex;

     - considered, to the extent publicly available, the financial terms of
       certain other similar transactions recently effected that Salomon Smith
       Barney considered relevant in evaluating the Offers;

     - analyzed certain financial, stock market and other publicly available
       information relating to the businesses of other companies whose
       operations Salomon Smith Barney considered relevant in evaluating those
       of Gemex; and

     - conducted such other analyses and examinations and considered such other
       information and financial, economic and market criteria as Salomon Smith
       Barney deemed appropriate.

     In rendering its opinion, Salomon Smith Barney assumed and relied, without
independent verification, upon the accuracy and completeness of all financial
and other information and data publicly available or furnished to or otherwise
reviewed by or discussed with it and have further relied upon the assurances of
the management of PBG that they are not aware of any facts that would make any
of such information inaccurate or misleading. With respect to financial
forecasts and other information and data provided to or otherwise reviewed by or
discussed with it, Salomon Smith Barney has been advised by the management of
PBG that such forecasts and other information and data were reasonably prepared
on bases reflecting the best currently available estimates and judgments of the
management of PBG as to the future financial performance of Gemex. Salomon Smith
Barney expressed no view with respect to such forecasts and other information
and data or the assumptions on which they were based. Salomon Smith Barney has
not made or been provided with an independent evaluation or appraisal of the
assets or liabilities (contingent or otherwise) of Gemex nor has Salomon Smith
Barney made any physical inspection of the properties or assets of Gemex.
Representatives of PBG have advised Salomon Smith Barney, and Salomon Smith
Barney has assumed, that, when finalized, the documents it reviewed in draft
form, as described above, will not vary materially from such drafts.

     Salomon Smith Barney was not requested to consider, and its opinion does
not address, the relative merits of the Offers as compared to any alternative
business strategies that might exist for PBG or the effect of any other
transaction in which PBG and its affiliates might engage. Salomon Smith Barney's
opinion necessarily is based upon information available to it and financial,
stock market and other conditions and circumstances existing and disclosed to it
as of the date of its opinion.

     SALOMON SMITH BARNEY'S ADVISORY SERVICES AND ITS OPINION EXPRESSED WERE
PROVIDED SOLELY FOR THE INFORMATION OF THE PBG BOARD OF DIRECTORS IN ITS
EVALUATION OF THE OFFERS FROM PBG'S STANDPOINT. IT DOES NOT ADDRESS IN ANY
RESPECT THE FAIRNESS OF THE OFFERS TO GEMEX SECURITY HOLDERS, NOR DOES IT
CONSTITUTE A RECOMMENDATION OF THE OFFERS TO ANY PERSON.

     Financial Analysis of Salomon Smith Barney.  Salomon Smith Barney made a
brief presentation to the PBG Board of Directors with respect to Gemex and the
Offers which summarized certain analyses of the value of Gemex utilizing three
methodologies: a comparable public companies analysis; a precedent transactions
analysis; and a discounted cash flow analysis.

                                        15


     A copy of Salomon Smith Barney's written presentation to the PBG Board of
Directors relating to its opinion has been filed as an exhibit to the Schedule
TO filed by PBG with the SEC and will be available for inspection and copying at
the principal executive offices of PBG during regular business hours by any
interested stockholder of PBG or stockholder representative who has been so
designated in writing and may be inspected and copied at, and obtained by mail
from, the SEC.

  COMPARABLE PUBLIC COMPANIES ANALYSIS

     Salomon Smith Barney compared financial, operating and stock market
information, and forecasted financial information for selected Latin American
publicly traded companies that Salomon Smith Barney deemed appropriate for
comparison with financial, operating and forecasted financial information for
Gemex. The selected comparable companies considered by Salomon Smith Barney
were:

     - Embotelladora Andina,

     - Grupo Continental, S.A.,

     - Coca-Cola Femsa, and

     - Panamco.

     Salomon Smith Barney considered these companies appropriate for comparison
but noted that none of these companies has the same management, make up, size
and combination of businesses as Gemex.

     For each of the selected comparable public companies, Salomon Smith Barney
derived and compared, among other things:

     - the ratio of each company's firm value as of August 23, 2002, to

          (a) its revenue for the twelve months ending June 30, 2002,

          (b) its earnings before interest expense, taxes, depreciation and
     amortization, or EBITDA, for the twelve months ending June 30, 2002,

          (c) its earnings before interest expense and taxes, or EBIT, for the
     twelve months ending June 30, 2002,

          (d) its estimated revenues for 2002,

          (e) its estimated EBITDA for 2002, and

          (f) its estimated EBIT for 2002.

     The forecasted financial information used by Salomon Smith Barney for the
selected comparable companies in the course of these analyses was based on
information published by equity research analysts employed by Salomon Smith
Barney and other investment banking firms. With respect to Gemex, the forecasted
financial information used by Salomon Smith Barney was based on information
provided by PBG. Calculations were made based on the closing price per share of
each company's common stock on August 23, 2002. In deriving ratios for the
selected comparable companies, Salomon Smith Barney made certain adjustments to
the relevant data to take into account certain unusual and nonrecurring items.

     Firm value was calculated as the sum of the value of:

     - all common shares assuming the exercise of all in-the-money options,
       warrants and convertible securities, less the proceeds from such
       exercise; plus

     - indebtedness; plus

     - minority interests; plus

     - preferred stock; plus

                                        16


     - out-of-the-money convertible securities; minus

     - investments in unconsolidated affiliates and cash.

     Salomon Smith Barney focused on the calculated ratios of firm value to
estimated EBITDA and, based on this information and qualitative judgment,
derived a reference range of Ps.11.68 to Ps.18.32 for the implied equity value
per CPO (which term includes CPOs underlying GDSs).

  PRECEDENT TRANSACTIONS ANALYSIS

     Multiples paid.  Salomon Smith Barney reviewed publicly available
information for four completed merger or acquisition transactions announced in
emerging markets since October 1998 involving public companies in the soft drink
bottling sector. For each precedent transaction, Salomon Smith Barney derived
and compared, among other things:

     - the ratio of the firm value of the acquired company to

          (a) the revenue of the acquired company,

          (b) the EBIT of the acquired company, and

          (c) the EBITDA of the acquired company,

in each case, for the last twelve-month period ending prior to the announcement
of the transaction for which financial results were available.

     With respect to the financial information for the companies involved in the
precedent transactions, Salomon Smith Barney relied on information provided by
Securities Data Corporation as well as information available in public
documents. Securities Data Corporation compiles summaries of merger and
financing information published by certain investment banks, market research
firms and trade associations. Salomon Smith Barney calculated firm value as
described above. Salomon Smith Barney considered the following transactions in
evaluating the Offers:



ANNOUNCEMENT DATE                  ACQUIROR                      ACQUIRED COMPANY
- -----------------                  --------                      ----------------
                                                   
     August 2001        Coca-Cola Bottlers Philippines     Cosmos Bottling Corporation
    February 2001          San Miguel/Coca-Cola Co.       Coca Cola Bottlers Philippines
   September 2000               Coca-Cola Co.             Ades Alfindo PutraSetia-Brands
     August 2000                    Quinsa                  Baesa Cerveceria Malteria


     Based on this data, Salomon Smith Barney derived a range for the implied
equity value per CPO of Ps.21.22 to Ps.27.87.

     Premiums paid.  Salomon Smith Barney derived and compared, among other
things, a reference for the Gemex shares based on the premiums paid in other
Mexican public company transactions and Latin American consumer company
transactions, when compared to the trading price of the acquired company's
depositary receipts 4 weeks prior to announcement of the transaction. With
respect to the financial information for the companies involved in the
transactions, Salomon Smith Barney relied on information provided by Securities
Data Corporation as well as information available in public documents. Based on
this information and qualitative judgment, Salomon Smith Barney derived a
reference range for the implied equity value per CPO of Ps.15.57 to Ps.16.73.

  DISCOUNTED CASH FLOW ANALYSIS

     Salomon Smith Barney also performed a discounted cash flow analysis of
Gemex using PBG management forecasts in Mexican pesos for the years 2002 through
2011. Salomon Smith Barney calculated the estimated present value of Gemex's
unlevered free cash flows in Mexican pesos from October 2002 through 2011.
Salomon Smith Barney added to that the estimated present value of the

                                        17


estimated terminal value of Gemex at the end of the year 2011. For purposes of
this analysis, Salomon Smith Barney utilized discount rates ranging from 12.0%
to 14.0% and perpetuity terminal value growth rates ranging from 0.5% to 1.5%.
From this analysis, and based on this information and qualitative judgment,
Salomon Smith Barney derived a reference range of Ps.16.92 to Ps.24.73 for the
implied equity value CPO.

     The preceding discussion is a summary of the material financial analyses
furnished by Salomon Smith Barney to the PBG Board of Directors, but it does not
purport to be a complete description of the analyses performed by Salomon Smith
Barney or of its presentation to the PBG Board of Directors. The preparation of
financial analyses and fairness opinions is a complex process involving
subjective judgments and is not necessarily susceptible to partial analysis or
summary description. Salomon Smith Barney made no attempt to assign specific
weights to particular analyses or factors considered, but rather made
qualitative judgments as to the significance and relevance of all the analyses
and factors considered and determined to give its fairness opinion as described
above. Accordingly, Salomon Smith Barney believes that its analyses, and the
summary set forth above, must be considered as a whole, and that selecting
portions of the analyses and of the factors considered by Salomon Smith Barney,
without considering all of the analyses and factors, could create a misleading
or incomplete view of the processes underlying the analyses conducted by Salomon
Smith Barney and its opinion. With regard to the comparable companies and
precedent transaction analyses summarized above, Salomon Smith Barney selected
comparable public companies and precedent transactions on the basis of various
factors, including size and similarity of the relevant companies; however, no
company utilized in these analyses is identical to Gemex and no precedent
transaction is identical to the Offers. As a result, these analyses are not
purely mathematical, but also take into account differences in financial and
operating characteristics of the subject companies and other factors that could
affect the transaction or public trading value of the subject companies to which
Gemex is being compared.

     In its analyses, Salomon Smith Barney made numerous assumptions with
respect to Gemex, industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond Gemex's
control. Any estimates contained in Salomon Smith Barney's analyses are not
necessarily indicative of actual values or predictive of future results or
values, which may be significantly more or less favorable than those suggested
by these analyses. Estimates of values of companies do not purport to be
appraisals or necessarily to reflect the prices at which companies may actually
be sold. Because these estimates are inherently subject to uncertainty, none of
PBG, Gemex, the PBG Board of Directors, Salomon Smith Barney or any other person
assumes responsibility if future results or actual values differ materially from
the estimates.

     Salomon Smith Barney's analyses were prepared solely as part of Salomon
Smith Barney's analysis of the fairness of the Offers and were provided to the
PBG Board of Directors in that connection. The opinion of Salomon Smith Barney
was only one of the factors taken into consideration by the PBG Board of
Directors in making its determination to approve the Offers.

     Salomon Smith Barney is an internationally recognized investment banking
firm engaged in, among other things, the valuation of businesses and their
securities in connection with mergers and acquisitions, restructurings,
leveraged buyouts, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. The PBG Board of Directors
selected Salomon Smith Barney to act as its financial advisor on the basis of
Salomon Smith Barney's international reputation and Salomon Smith Barney's
familiarity with PBG. In the ordinary course of its business, Salomon Smith
Barney and its affiliates may actively trade or hold PBG and Gemex securities
for its own account and for the account of customers and, accordingly, may at
any time hold a long or short position in those securities. Salomon Smith Barney
and its affiliates, including Citigroup Inc. and its affiliates, may maintain
other relationships with PBG, Gemex and their respective affiliates.

     Fairness to security holders of Gemex.  The rules of the SEC require PBG,
BG LLC and us (collectively referred to as the "Bidders") to express their
belief as to the fairness of the Offers and the

                                        18


reverse stock split to Gemex security holders who are not affiliated with the
Bidders, PepsiCo or Mr. Molina. The Bidders believe the Offers and the reverse
stock split are financially and procedurally fair to such Gemex security
holders. This belief, however, should not be construed as a recommendation to
Gemex security holders to tender Securities in the Offers. The Bidders base
their belief on their consideration of the following factors, each of which, in
their judgment, supports their views as to the fairness of the Offers and the
reverse stock split.

     - The assumption that, after considering, and based upon, factors deemed
       relevant by the Board of Directors of Gemex, that Board of Directors
       would recommend to Gemex's security holders (other than PepsiCo, Mr.
       Molina and their respective affiliates) that they accept the Offers and
       tender their Securities in the Offers. Gemex's
       solicitation/recommendation statement on Schedule 14D-9 filed with the
       SEC on October 7, 2002, sets forth the recommendation of the Board of
       Directors of Gemex and the factors it considered in making that
       recommendation.

     - The assumption that the Board of Directors of Gemex would receive a
       written opinion from a major United States investment bank that, as of
       the date of such opinion, the cash consideration to be received by the
       security holders of Gemex in the Offers was fair to the security holders
       of Gemex (other than PepsiCo, Mr. Molina and their respective affiliates)
       from a financial point of view. Gemex's solicitation/recommendation
       statement on Schedule 14D-9 filed with the SEC on October 7, 2002,
       reported that the Board of Directors of Gemex received such an opinion
       from Merrill Lynch dated October 3, 2002.

     - The assumption that the cash consideration payable per CPO and per GDS in
       the Offers represent premiums to the closing prices for the respective
       Securities on May 7, 2002, the last trading day prior to public
       announcement of the Offers. The Mexican pesos cash consideration payable
       per CPO and per GDS in the Offers represent premiums of 18.993% and
       21.857% to the closing prices for the respective Securities on May 7,
       2002.

     - The Offers are conditioned on the tender of a sufficient number of shares
       of capital stock of Gemex so that, after the Securities (including those
       owned by PepsiCo, Mr. Molina and their respective affiliates identified
       in the Agreements to Tender) are purchased pursuant to the Offers, we
       would own at least 90% of the outstanding capital stock of Gemex
       (including shares represented by CPOs and GDSs) on the expiration date
       (the "Minimum Condition"). Satisfaction of the Minimum Condition will
       require that more than 50% of the shares of capital stock of Gemex
       (including shares of capital stock underlying CPOs and GDSs) not owned by
       the Bidders, PepsiCo or Mr. Molina are tendered. The Minimum Condition is
       designed to provide an opportunity to the public to determine if the
       Offers are fair, and a meaningful procedural protection for Gemex
       security holders.

     - The Offers, the Mexican Stock Exchange de-listing offer and the reverse
       stock split provide the Gemex security holders substantially greater
       opportunity to sell their holdings in Gemex at a premium than has been
       available in the public market, where historically low volumes of trading
       have greatly limited liquidity, without the usual transaction costs
       associated with open market sales.

     - The Bidders believe that the Gemex security holders are capable of
       evaluating Offers that provide solely for the payment of cash
       consideration.

     - Gemex security holders who elect not to tender their Securities in the
       Offers will receive the same consideration in the Mexican Stock Exchange
       de-listing offer and the reverse stock split that we pay in the Offers.
       This provision is designed to eliminate any concern on the part of Gemex
       security holders that they should tender into the Offers or risk being
       treated less fairly.

     - Mr. Molina, the Chairman of the Board of Directors and Chief Executive
       Officer of Gemex, in his capacity as the largest security holder of
       Gemex, has agreed to tender his Securities, and to cause his affiliates
       identified in the Molina Agreement to Tender to tender their Securities,
       in the Offers.

                                        19


     - Mr. Molina has the right to accept more competitive offers for his
       Securities, and to cause his affiliates identified in the Molina
       Agreement to Tender to accept more competitive offers for their
       Securities, received at any time prior to or during the period the Offers
       remain outstanding.

     - The Offers are not conditioned upon the Bidders obtaining financing.

     The Bidders also considered the following factors, which they considered to
be potentially negative, in their consideration of the fairness of the Offers
and the reverse stock split.

     - Tendering Gemex security holders will cease to participate in Gemex's
       future earnings or growth, if any, or benefit from increases, if any, in
       the value of the Securities.

     - The Minimum Condition may be waived by the Bidders.

     - Shares and CPOs representing more than 50% of the voting power of Gemex
       are held in the PepsiCo/Molina Trust. Under the terms of the
       PepsiCo/Molina Trust, Mr. Molina has the power to direct the voting of
       such Shares and CPOs during Phase I and PepsiCo has the power to direct
       the voting of such Shares and CPOs during Phase II, in each case with the
       exception of the approval of certain corporate actions that require the
       consent of the party that does not direct the voting. These corporate
       actions include certain sales of assets in excess of $5.0 million,
       certain issuances or repurchases of capital stock of Gemex and certain
       mergers. This may have had the effect of discouraging potential buyers of
       Gemex.

     - PepsiCo has an interest in the Offers that is different from other
       security holders of Gemex because PepsiCo will have an indirect ownership
       interest in Gemex following the Offers and the reverse stock split as a
       result of its approximately 42.7% ownership interest in the voting
       capital stock of PBG and its approximately 7% ownership interest in BG
       LLC.

     The Bidders believe that each of the foregoing factors is relevant to all
Gemex security holders who are not affiliated with the Bidders, PepsiCo or Mr.
Molina. The Bidders also believe that the potentially negative factors do not,
individually or in the aggregate, outweigh the overall fairness of the Offers
and the reverse stock split to Gemex's security holders other than Mr. Molina,
PepsiCo and their respective affiliates.

     The Bidders determined that the following factors were not relevant to the
financial and procedural fairness of the Offers and the reverse stock split.

     - The net book value of Gemex (approximately Ps.4.335 billion at June 30,
       2002, as reported in Gemex's Form 6-K filed with the SEC on July 26,
       2002), because the Bidders do not believe that net book value is a true
       indication of the value of Gemex as a going concern and its goodwill.

     - The liquidation value of Gemex's assets, because the Bidders believe that
       the value that could be obtained through a liquidation of Gemex's assets
       would be significantly less than the value that could be obtained through
       a sale of Gemex as a going concern.

     - The fact that on September 5, 2002, the Board of Directors of PBG
       received a written opinion of Salomon Smith Barney Inc. that, as of that
       date and based upon and subject to the various assumptions and
       limitations set forth in the opinion, the aggregate consideration to be
       paid pursuant to the Offers is fair, from a financial point of view, to
       PBG.

     - Due to the illiquidity of the market for the Shares, which were last
       traded on the Mexican Stock Exchange in May 2001, the assumption that the
       cash consideration payable per Share in the Offers represents a premium
       to the closing price for Shares on May 7, 2002, the last trading day
       prior to the public announcement of the Offers.

     The foregoing discussion of the information and factors considered by the
Bidders is not intended to be exhaustive but includes all material factors the
Bidders considered. In view of the variety of factors considered in connection
with the Bidders' evaluation of the Offers and the reverse stock split, the
Bidders did not find it practicable to, and did not, quantify or otherwise
assign relative weights to the specific factors and considered all factors as a
whole in reaching their determination.

                                        20


        EXEMPTIONS REQUESTED FROM THE SECURITIES AND EXCHANGE COMMISSION

     In order to facilitate the making of the U.S. Offer, we have requested from
the SEC relief with respect to certain rules promulgated under the Exchange Act.
In particular, we have requested the following:

     - exemptive relief from the provisions of Rule 14d-10(a)(1) under the
       Exchange Act to permit the dual offer structure described in this U.S.
       Offer to Purchase and to exclude holders of Shares and CPOs who are
       Mexican residents but who are eligible to participate in the Mexican
       Offer;

     - exemptive relief from the provisions of Rule 14e-5 under the Exchange
       Act. Rule 14e-5 prohibits a person making a cash tender offer for an
       equity security registered under Section 12 of the Exchange Act from,
       directly or indirectly, purchasing or making any arrangement to purchase
       such equity or any security convertible into, or exchangeable for such
       equity security, otherwise than pursuant to a tender offer, from the time
       the offer is publicly announced until its expiration. Accordingly, in the
       absence of the exemptive relief, the application of Rule 14e-5 would
       prohibit us and our affiliates from purchasing Shares and CPOs in the
       Mexican Offer. The exemption from Rule 14e-5 would permit us and our
       affiliates to purchase Shares and CPOs pursuant to the Mexican Offer
       during, but outside, this U.S. Offer; and

     - Confirmation that the SEC Division of Corporation Finance will not
       recommend that the SEC take enforcement action under the provisions of
       Rule 14d-10(a)(2). Rule 14d-10(a)(2) promulgated under the Exchange Act
       provides that the consideration paid to any security holder pursuant to a
       tender offer must be the highest consideration paid to any other security
       holder during such tender offer. Read literally, Rule 14d-10(a)(2) could
       be interpreted to prohibit (i) the Ps.172.7 million payment from PepsiCo
       to us in order to facilitate the purchase of Gemex and ensure a smooth
       ownership transition of Gemex as contemplated by the PepsiCo Agreement to
       Tender because such payment could be construed to render the purchase
       price payable to PepsiCo for its Securities to be lower than the price
       offered to all other security holders of Gemex, and (ii) the indemnity
       and escrow arrangement under the Molina Agreement to Tender because it
       could possibly result in Mr. Molina ultimately receiving a price per
       Security that is lower than the price per Security offered in the Offers.

     On October 4, 2002, the SEC orally granted the relief described above.

                                FOREIGN CURRENCY

     In this document, references to "United States dollars," "U.S. dollars,"
"US$," "$" or "dollars" are to U.S. currency and references to "Mexican pesos,"
"pesos" or "Ps." are to Mexican currency. Solely for the convenience of the
reader, certain peso amounts have been translated into dollars at specified
rates. These translations should not be construed as representations that the
peso amounts actually represent such dollar amounts or could be converted into
dollars at the rate indicated or at any other rate. On October 4, 2002, the last
trading day prior to the date of this U.S. Offer, the exchange rate between
pesos and dollars reported by Reuters and Bloomberg on their FXBENCH page as the
New York closing rate for the exchange of Mexican pesos and U.S. dollars was
Ps.10.1985 to US$1.00.

                           FORWARD LOOKING STATEMENTS

     This U.S. Offer to Purchase, including any documents incorporated by
reference, contains statements that constitute forward looking statements. The
statements appear throughout this U.S. Offer to Purchase and include statements
regarding the intent, belief or current expectations of us and our management,
including with respect to our strategy following completion of the Offers, our
plans with respect to the acquisition of Gemex and the probable impact of that
acquisition, if successful, on our financial condition and results of operation.
Such forward looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ materially from
those described in such forward looking statements as a result of various
factors.

                                        21


                                 THE U.S. OFFER

TERMS OF THIS U.S. OFFER; EXPIRATION DATE

     Subject to the terms and conditions set forth below, in the U.S. Offer we
are offering to purchase all the outstanding GDSs at a price of Ps.106.38 per
GDS, all outstanding Shares held by persons who are not Mexican residents at a
price of Ps.5.91 per Share, and all outstanding CPOs held by persons who are not
Mexican residents, at a price of Ps.17.73 per CPO, in each case in cash, less
any withholding taxes and without interest thereon. The purchase prices for the
Securities accepted for payment pursuant to the U.S. Offer will be paid in U.S.
dollars equivalent to the applicable Mexican peso price in the U.S. Offer, based
on the Applicable Exchange Rate. We will announce the Applicable Exchange Rate
by a press release not later than 9:00 a.m., New York City time, on the next
U.S. business day after the Applicable Exchange Rate is determined. The
aggregate purchase price for all the Securities we are offering to purchase in
the Offers is Ps.8,966,655,256.

     The Mexican Offer is open to all holders of Shares and CPOs, including U.S.
holders. If you are a U.S. holder and would like to tender your Shares and CPOs
in the Mexican Offer instead of the U.S. Offer you may do so. You also may
contact the Depositary to convert your GDSs into CPOs and tender such CPOs in
the Mexican Offer. You will have to pay a fee of $5.00 for each 100 GDSs
converted. The purchase prices for the Shares and CPOs tendered in the Mexican
Offer will be paid, at your election, in Mexican pesos or in U.S. dollars
equivalent to the Mexican peso price based on the Applicable Exchange Rate.
However, if you are an individual tendering Shares and CPOs into the Mexican
Offer you will be entitled to elect to receive the purchase prices in U.S.
dollars only if you have an account in or outside Mexico into which you can
receive payment in U.S. dollars and the information regarding such account has
been provided to the custodian for their Shares and CPOs. If you choose to
tender into the Mexican Offer and elect to receive payment in Mexican pesos you
will bear the risk of any fluctuation in the exchange rate after the
consummation of the Offers if you then wish to convert such pesos into U.S.
dollars. In the event that the Mexican Offer is amended to increase or decrease
the price offered for the Shares and CPOs, we will make a corresponding
amendment to increase or decrease the price offered for the Securities in the
U.S. Offer.

     In connection with the Offers, we and BG LLC entered into the PepsiCo
Agreement to Tender and the Molina Agreement to Tender. Under the PepsiCo
Agreement to Tender, as it is strategically important that we, a subsidiary of
PBG, one of PepsiCo's anchor bottlers, purchase Gemex, PepsiCo has agreed to pay
us Ps.172.7 million in order to facilitate the purchase of Gemex and ensure a
smooth ownership transition of Gemex. This payment will be made before the
completion of the Offers. In addition, PepsiCo undertakes to tender, and to
cause its nominee identified in such agreement to tender, in the Offers the
Securities owned directly or indirectly by PepsiCo, or which may be acquired by
PepsiCo on or before the expiration date, subject to their right to accept more
competitive offers received at any time prior to or during the time the Offers
remain outstanding.

     Under the Molina Agreement to Tender, Mr. Molina has undertaken to tender,
and to cause his affiliates identified in the Molina Agreement to Tender to
tender, in the Offers the Securities owned by them, or which may be acquired by
them on or before the expiration date, subject to their right to accept more
competitive offers. Mr. Molina has also agreed that, if his and his affiliates'
Securities are purchased by us in the Offers, for five years, he will not engage
in the manufacture, marketing or wholesale sales or distribution of beverages
that are competitive with the products manufactured, marketed, sold or
distributed by Gemex in Mexico as of the date of the Molina Agreement to Tender.
In addition, Mr. Molina represented and warranted that, other than as disclosed
in the Molina Agreement to Tender, there are no undisclosed liabilities of Gemex
to companies and individuals affiliated with Mr. Molina and that neither he nor
any of his affiliates has any claims against Gemex and its subsidiaries or
representatives of any of them. Mr. Molina also represented and warranted that
all agreements between Mr. Molina and his affiliates, on the one hand, and Gemex
and its subsidiaries, or representatives of any of them, on the other hand, may
be terminated by Gemex without payment of any penalty, liquidated damages or
termination charge. Mr. Molina also agreed to put in escrow an amount in U.S.
dollars equivalent to

                                        22


approximately Ps.141.1 million at the Applicable Exchange Rate from the proceeds
he is entitled to receive in the Offers for his Securities, as security for any
indemnity obligations resulting from a breach by Mr. Molina of such
representations and warranties. The funds in escrow will be released over a
period of three years, at a rate of one-sixth of the total amount originally put
in escrow every six months, to the extent indemnification claims have not been
made against them. Mr. Molina's indemnification obligation with respect to his
representations and warranties described in this paragraph will not exceed
Ps.188.2 million (including amounts paid out of the escrow described above).
However, there is no limitation on the remedies available to us in the event of
other breaches by Mr. Molina of the Molina Agreement to Tender.

     We will accept for payment and pay for all the Securities that are validly
tendered prior to the expiration date and not withdrawn as provided below under
the caption "Withdrawal rights." This U.S. Offer will expire at 5:00 p.m., New
York City time (4:00 p.m., Mexico City time) on November 5, 2002, unless we have
extended the period of time for which this U.S. Offer is open. For more
information regarding an extension of the U.S. Offer, see the discussion below
under the caption "Extension of tender period; amendment and termination."

     This U.S. Offer is subject to certain conditions which are described below
under the caption "Certain conditions to the U.S. Offer." The conditions to the
Mexican Offer are substantially similar to those of the U.S. Offer. If the
conditions to the U.S. Offer are not satisfied and we choose to waive any
condition, we may be required to extend the U.S. Offer under applicable laws and
regulations. Under the Molina Agreement to Tender and the PepsiCo Agreement to
Tender, if on or prior to the initial expiration date the conditions to either
of the Offers set forth in the U.S. Offer under the caption "The U.S. Offer --
Certain conditions to the U.S. Offer" and in the Mexican Offer are satisfied, we
may extend the expiration date of the Offers for a period of not more than five
business days after such initial expiration date, solely to increase the number
of Securities to be tendered in the Offers. If, on the other hand, the
conditions to either of the Offers are not satisfied or waived by us on or prior
to the initial expiration date, we are required to extend the Offers until all
such conditions have been satisfied or waived, but not more than ten business
days after the initial expiration date. In the event that the conditions to
either of the Offers are still not satisfied or waived by us, we have the right,
at our sole discretion, to terminate the Offers after such ten business day
extension has expired or to further extend the Offers for an additional ten
business days. Under the Molina Agreement to Tender and the PepsiCo Agreement to
Tender, an extension of the Offers for any other reason or under any other
circumstances requires the consent of Mr. Molina and PepsiCo, respectively,
unless such extension is required by applicable laws and regulations.

     We, BG LLC and PBG have not and will not purchase, or make any arrangements
to purchase, Securities outside of the U.S. Offer during the period which
commenced on May 8, 2002 until the expiration date of the U.S. Offer, except
pursuant to the Mexican Offer.

     Gemex has allowed us to use its security position listings for the purpose
of disseminating this U.S. Offer to holders of the Securities. This U.S. Offer
to Purchase and the related GDS Letter of Transmittal have been mailed to record
holders of the Securities that may be tendered in the U.S. Offer. Also, these
materials are being furnished to brokers, banks and similar persons whose names,
or the names of whose nominees, appear on Gemex's security position listing or,
if applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of such
Securities.

CERTAIN CONDITIONS TO THE U.S. OFFER

     We will not be required to accept Securities for payment if (i) less than
90% of all of the outstanding capital stock of Gemex (including shares
represented by CPOs and GDSs) on the expiration date, is tendered into the
Offers on or prior to the expiration date and not withdrawn, (ii) less than all
of the Securities of Gemex owned, directly or indirectly, or which may be
acquired on or before the expiration date, by PepsiCo and its nominee are
tendered into the Offers and not withdrawn, (iii) less than all of the
Securities of Gemex owned, directly or indirectly, by Mr. Molina and his
affiliates identified in the Molina

                                        23


Agreement to Tender, are tendered into the Offers and not withdrawn, (iv) the
conditions to the Mexican Offer have not been satisfied or waived on or before
the expiration date of the Mexican Offer or the Mexican Offer has been
terminated without the purchase of any Securities, or (v) at any time before the
acceptance of the Securities for payment, any of the following events occurs:

          1. a material breach by Mr. Molina of any of the material provisions
     of the Molina Agreement to Tender (which agreement is described below under
     the caption "Past Contacts, Transactions, Negotiations and Agreements")
     including, without limitation, a breach by Mr. Molina of his
     representations and warranties regarding transactions between Gemex and its
     affiliates, on one hand, and Mr. Molina and his affiliates, on the other
     hand, as set forth therein;

          2. a material breach by PepsiCo of any of the material provisions of
     the PepsiCo Agreement to Tender (which agreement is described below under
     the caption "Past Contacts, Transactions, Negotiations and Agreements");

          3. any regulatory approval, action, waiver or consent required to
     consummate the Offers, including any approval of the CNBV, the SEC or any
     securities exchange, (a) shall not have been obtained, or shall have been
     obtained under conditions or restrictions that would adversely affect
     either of the Offers or Gemex or its subsidiaries, (b) shall have been
     modified in any material way that would adversely affect the either of
     Offers or Gemex, or (c) has been revoked;

          4. (a) there shall be pending any action, suit, proceeding or claim by
     any person, domestic or foreign, which has a reasonable likelihood of
     success, or by any government, governmental authority or other regulatory
     or administrative agency or commission, domestic, foreign or supranational,
     before any court, governmental, regulatory or administrative agency or
     commission, authority or tribunal, domestic, foreign or supranational, or
     there shall be any statute, rule, regulation, order, judgment, decree or
     injunction applicable to either of the Offers, by such governmental or
     administrative bodies, prohibiting, materially restricting or substantially
     delaying, or seeking to prohibit, materially restrict or substantially
     delay the consummation of either of the Offers, or materially modifying or
     affecting either of the Offers, or (b) any change, event, condition or
     development which has had or would reasonably be expected to result in a
     material adverse effect on the financial condition, business, properties,
     franchises, licenses, assets, liabilities or results of operations of Gemex
     and its subsidiaries, taken as a whole;

          5. any filings of Gemex with the SEC, the CNBV or any securities
     exchange shall have contained, at the time of their respective filings,
     untrue statements of material facts or omitted to state material facts
     necessary to make the statements made therein, in light of the
     circumstances in which they were made, not misleading, and such untrue
     statements or omissions would reasonably be expected to cause a material
     adverse effect on the financial condition, business, properties,
     franchises, licenses, assets, liabilities or results of operations of Gemex
     and its subsidiaries, taken as a whole;

          6. any material adverse change in the financial markets, including
     without limitation, (a) any general suspension of trading in any of the
     Securities on the NYSE or the Mexican Stock Exchange (except for daily
     suspensions in accordance with their respective rules or policies), (b) a
     declaration of a banking moratorium or imposition of limitations on the
     extension of credit generally in the United States or any adverse change in
     exchange controls in the U.S. or Mexico, or (c) any material limitations on
     the markets for currency in Mexico;

          7. commencement of a war, armed hostilities, military coup d'etat,
     acts of terrorism, collapse of the government or other national or
     international crisis in each case involving the United States or Mexico
     which would reasonably be expected to result in a material adverse effect
     on the financial condition, business, properties, franchises, licenses,
     assets, liabilities or results of operations of Gemex and its subsidiaries,
     taken as a whole;

          8. Gemex or any of its subsidiaries shall have, at any time after June
     30, 2002, effected any change to their respective capital structure which
     would reasonably be expected to result in a material adverse effect on the
     financial condition, business, properties, franchises, licenses, assets,
     liabilities or

                                        24


     results of operations of Gemex and its subsidiaries, taken as a whole,
     including, without limitation, (a) issued, sold or otherwise transferred,
     or proposed to do any of the foregoing, to any person, any shares of
     capital stock or other securities (including options to purchase shares of
     capital stock and any debt securities), (b) declared, paid or proposed to
     declare or pay any dividend or distribution on the Securities, (c) altered,
     or proposed to alter, any material term of any outstanding security of
     Gemex or any of its subsidiaries other than employee stock options
     consistent with the provisions of the Molina Agreement to Tender, (d)
     split, combined or otherwise changed, or authorized or proposed the split,
     combination or other change of, the Securities or Gemex's or any of its
     subsidiaries' capitalization, and (e) authorized, recommended, proposed or
     entered into any merger, consolidation, liquidation, dissolution, business
     combination, joint venture, strategic alliance or similar arrangement
     involving any material assets, acquisition or disposition of a material
     amount of assets or securities, other than pursuant to the Offers;

          9. Gemex or any of its subsidiaries shall have at any time after June
     30, 2002 operated its business otherwise than in the ordinary course
     consistent with past practice, including, without limitation, (a) entered
     into or invested in a line of business different from those in which Gemex
     or any of its subsidiaries was engaged as of June 30, 2002, (b) effected
     any material change to its corporate structure, including, without
     limitation, the transfer or division of all or a significant portion of its
     assets, (c) disposed of, or created liens on, other than pursuant to credit
     facilities existing as of June 30, 2002, any material assets of Gemex or
     any of its subsidiaries, (d) voluntarily or involuntarily terminated or
     modified, in any material adverse manner, any material agreements, (e) made
     a material change in its accounting practices (other than as required by
     U.S. or Mexican GAAP) or regulatory compliance procedures, (f) waived,
     released, assigned, settled or compromised any claims or litigation
     involving amounts or other rights or assets in excess of $2.0 million, or
     (g) amended or authorized or proposed any amendments to Gemex's Bylaws or
     any other organizational documents;

          10. Gemex and its subsidiaries have "consolidated adjusted net debt"
     in excess of Ps.2,648,353,587 or do not have "consolidated adjusted working
     capital" of at least Ps.190.75 million, as such terms are defined in the
     Molina Agreement to Tender. The term "consolidated adjusted net debt" as of
     any date is defined in the Molina Agreement to Tender and the PepsiCo
     Agreement to Tender as all short-term and long-term indebtedness, including
     obligations under capital leases, but not including accrued interest, of
     Gemex and its subsidiaries on a consolidated basis as of such date, reduced
     by the sum of (i) the consolidated cash and cash equivalents of Gemex and
     its subsidiaries as of such date, (ii) an amount equal to Ps.172,708,000
     and (iii) the aggregate amount not yet received as cash as of such date by
     Gemex from its employees and/or its subsidiaries representing the aggregate
     unpaid strike price of their vested options to acquire securities of Gemex
     (assuming all of such vested options, whether exercised or not, are
     included in calculating the prices we are offering in the Offers). For the
     purpose of this calculation, all dollar denominated indebtedness of Gemex
     and its subsidiaries will be converted to Mexican pesos calculated using
     the average of the exchange rates reported on each of the five consecutive
     U.S. business days ending two U.S. business days prior to the commencement
     of the Offers by Reuters and Bloomberg on their FXBENCH page as the New
     York closing rate for the exchange of Mexican pesos to U.S. dollars. The
     term "consolidated adjusted working capital" as of any date is defined in
     the Molina Agreement to Tender and the PepsiCo Agreement to Tender as (A)
     the consolidated current assets of Gemex and its subsidiaries as of such
     date, other than the consolidated cash and cash equivalents of Gemex and
     its subsidiaries used to compute consolidated adjusted net debt as of such
     date less (B) the consolidated current liabilities of Gemex and its
     subsidiaries as of such date, other than (i) the principal amount of
     short-term indebtedness and the principal amount of the current portion of
     long-term indebtedness as of such date, and (ii) dividends payable as of
     such date; and

          11. any default by Gemex or any of its subsidiaries under any
     indebtedness which would reasonably be expected to result in a material
     adverse effect on the financial condition, business, properties,
     franchises, licenses, assets, liabilities or results of operations of Gemex
     and its subsidiaries,

                                        25


     taken as a whole, or which would, following the purchase of Securities in
     the Offers, result in a cross-default under any indebtedness of PBG or BG
     LLC.

     The foregoing conditions are for our benefit only and any such condition
may be waived by us, in whole or in part, at any time or from time to time prior
to the expiration of the U.S. Offer in our sole discretion, subject to
applicable law. Our failure at any time to assert any of the foregoing
conditions in respect of particular facts or circumstances will not be deemed a
waiver of our right to assert any such conditions in respect of any other facts
or circumstances and each such condition will be deemed to be an ongoing
condition which may be asserted or waived by us at any time and from time to
time prior to the expiration of the U.S. Offer.

ACCEPTANCE FOR PAYMENT

     Upon the terms and subject to the conditions of the U.S. Offer, we will
accept for payment Securities validly tendered by the expiration date of the
U.S. Offer, as it may be extended, and not withdrawn, and promptly after the
expiration date pay for such Securities. In addition, we reserve the right, in
our sole discretion and subject to applicable law, to delay the acceptance for
payment or the payment for Securities in order to comply in whole or in part
with any applicable law. For a description of our right to terminate the U.S.
Offer and not accept for payment or pay for Securities or to delay the
acceptance for payment or the payment for Securities, see the disclosure below
under the caption "Extension of tender period; termination and amendment."

     For purposes of the U.S. Offer, we will be deemed to have accepted for
payment tendered Securities when and if we give oral or written notice to the
U.S. Receiving Agent or the Mexican Receiving Agent, as the case may be, of our
acceptance of the tenders of such Securities. Payment for GDSs tendered in
certificated form and for Shares or CPOs tendered in book-entry form accepted
for payment pursuant to the U.S. Offer will be made by deposit of the purchase
prices with the U.S. Receiving Agent or the Mexican Receiving Agent, as the case
may be, which will act as your agent for the purpose of receiving payments from
us and transmitting such payments to you. Payment for GDSs tendered by
book-entry transfer will be made by crediting the account of the nominee holding
the GDSs on your behalf with The Depositary Trust Company. In all cases, payment
for Securities accepted for payment pursuant to the U.S. Offer will be made only
after timely receipt by the U.S. Receiving Agent or the Mexican Receiving Agent,
as the case may be, of:

     - in the case of Shares and CPOs, a properly completed and duly executed
       Acceptance Letter from the Indeval participant holding the Shares and
       CPOs on behalf of the tendering security holder;

     - in the case of GDSs tendered in certificated form, GDRs evidencing GDSs
       together with a properly completed and duly executed GDS Letter of
       Transmittal and all other required documents, as described below under
       the section captioned "Procedure for accepting this U.S. Offer -- Holders
       of GDSs;" and

     - in the case of GDSs tendered by book-entry transfer, a properly completed
       and duly executed GDS Letter of Transmittal (or facsimile thereof), or an
       Agent's Message (as defined below) instead of the GDS Letter of
       Transmittal, and all other required documents, as described below under
       the section captioned "Procedure for accepting this U.S. Offer -- Holders
       of GDSs."

     Accordingly, payment may be made to tendering security holders at different
times if delivery of the Securities and other required documents occur at
different times. Under no circumstances will interest be paid by us on the
purchase prices for Securities pursuant to the U.S. Offer regardless of any
delay in making such payments.

     If we increase or decrease the purchase prices to be paid for Securities
pursuant to the Mexican Offer, we will pay such increased or decreased
consideration for Securities purchased pursuant to the U.S. Offer.

                                        26


     The purchase prices for the Securities accepted for payment pursuant to the
U.S. Offer will be the U.S. dollar equivalent of the applicable Mexican peso
price of the U.S. Offer, based on the Applicable Exchange Rate. The purchase
prices for the Shares and CPOs tendered in the Mexican Offer will be paid, at
the holder's election, in Mexican pesos or in U.S. dollars equivalent to the
applicable Mexican peso price of the Mexican Offer, based on the Applicable
Exchange Rate. However, individuals tendering Shares and CPOs into the Mexican
Offer will be entitled to elect to receive the purchase prices in U.S. dollars
only if they have an account in or outside Mexico into which they can receive
payment in U.S. dollars and the information regarding such account has been
provided to the custodian for their Shares and CPOs. If you choose to tender
into the Mexican Offer and elect to receive payment in Mexican pesos you will
bear the risk of any fluctuation in the exchange rate after the consummation of
the Offers if you later wish to convert such pesos into U.S. dollars. Security
holders should be aware that they will bear additional exchange rate risks
should the U.S. Offer be extended.

     We reserve the right to transfer or assign, in whole or, from time to time,
in part, to one or more of our affiliates the right to purchase Securities
tendered pursuant to the U.S. Offer, but any such transfer or assignment will
not relieve us of our obligations under the U.S. Offer or prejudice the rights
of tendering security holders to receive payment for Securities validly tendered
and accepted for payment.

     If any tendered Securities are not purchased pursuant to the U.S. Offer for
any reason, or if certificates are submitted for more Securities than are
tendered, certificates for such unpurchased or untendered Securities will be
returned (or, in the case of Securities tendered by book-entry transfer, such
Securities will be credited to an account maintained by the U.S. Receiving Agent
or the Mexican Receiving Agent at The Depositary Trust Company or at Indeval,
respectively), without expense to the tendering security holder, as promptly as
practicable following the expiration or termination of the U.S. Offer.

PROCEDURE FOR TENDERING IN THE U.S. OFFER -- HOLDERS OF SHARES AND CPOS

     When you tender your Shares and CPOs in accordance with the procedures
described in this section and we accept your Shares and CPOs for payment, this
will constitute a binding agreement between you and us, subject to the terms and
conditions of the U.S. Offer. If you are not a Mexican resident and you are
either a record holder or beneficial owner of Gemex Shares or CPOs, and you wish
to tender your Shares or CPOs in the U.S. Offer, you must do so by book-entry
transfer as described below. You will not be able to tender in the U.S. Offer
any Shares in certificated form. If you hold Shares in certificated form you
should promptly contact any broker, dealer, bank, trust company, financial
institution or other nominee who is a participant in the book-entry transfer
system of Indeval and arrange for such a nominee to hold the Shares on your
behalf in book-entry form.

     Any broker, dealer, bank, trust company or other nominee acting on your
behalf that is a participant in Indeval may make delivery of Shares and CPOs by
causing Indeval to transfer such Shares and CPOs into the Mexican Receiving
Agent's account with Indeval in accordance with the procedures of Indeval. In
order to effect a tender of the Shares or CPOs you beneficially own, you should
promptly contact your nominee and instruct it to tender such Shares or CPOs. If
you hold your Shares and CPOs through a broker, dealer, bank, trust company or
other nominee who is not an Indeval participant, such nominee, on your behalf,
should promptly contact an Indeval participant and make arrangements for the
tender of the Shares and CPOs into the account of the Mexican Receiving Agent
with Indeval on or prior to the expiration date. Since this procedure is
identical to that by which other Gemex security holders participate in the
Mexican Offer, such nominee may wish to refer to the instructions for tendering
into the Mexican Offer attached as Annex II to this U.S. Offer to Purchase.

     In order for a book-entry transfer to constitute a valid tender of your
Shares and CPOs in the U.S. Offer, the Shares and CPOs must be tendered by your
nominee who is an Indeval participant into the account of the Mexican Receiving
Agent with Indeval and the Mexican Receiving Agent must receive a properly
completed and duly executed Acceptance Letter from the Indeval participant who
tendered your Shares and CPOs into its account, prior to the expiration date of
the U.S. Offer.

                                        27


     Matters concerning validity, eligibility and acceptance.  All questions as
to the form of documents and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares and CPOs will be
determined by us, in our sole discretion, which determination shall be final and
binding. We reserve the absolute right to reject any or all tenders of Shares
and CPOs determined by us not to be in proper form or the acceptance for payment
of or payment for which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any defect or irregularity in any tender of
Shares and CPOs. Neither we, BG LLC, PBG, the U.S. Dealer Manager, the Mexican
Receiving Agent, the U.S. Receiving Agent, the Information Agent nor any other
person will be under any duty to give notification of any defect or irregularity
in tenders or incur any liability for failure to give any such notification.

     If you are in any doubt about the procedure for tendering Shares and CPOs
into the U.S. Offer, please contact the Information Agent at its address as it
appears on the back cover of this U.S. Offer to Purchase.

     ANY HOLDER OF SHARES AND CPOs WHO IS NOT A MEXICAN RESIDENT MAY, AT ITS
OPTION, TENDER ITS SHARES AND CPOs INTO EITHER THE MEXICAN OFFER OR THE U.S.
OFFER. SHARES AND CPOs THAT ARE TENDERED (I) IN THE U.S. OFFER WILL BE PAID FOR
IN U.S. DOLLARS AND (II) IN THE MEXICAN OFFER WILL BE PAID FOR IN U.S. DOLLARS
OR MEXICAN PESOS, AT THE ELECTION OF THE HOLDER, PROVIDED THAT AN INDIVIDUAL
HOLDER IS ENTITLED TO MAKE SUCH ELECTION ONLY IF IT HAS AN ACCOUNT OUTSIDE
MEXICO INTO WHICH A PAYMENT IN U.S. DOLLARS CAN BE MADE AND THE INFORMATION
REGARDING SUCH ACCOUNT HAS BEEN PROVIDED TO THE MEXICAN RECEIVING AGENT. ANY
HOLDER OF SHARES OR CPOs WHO DESIRES TO ACCEPT THE MEXICAN OFFER SHOULD READ
CAREFULLY THE MEXICAN OFFER PROSPECTUS (FOLLETO INFORMATIVO) DATED OCTOBER 7,
2002, AND SHOULD FOLLOW THE PROCEDURES FOR TENDERING SHARES AND CPOs INTO THE
MEXICAN OFFER, A DESCRIPTION OF WHICH IS ATTACHED AS ANNEX II TO THIS U.S. OFFER
TO PURCHASE.

PROCEDURE FOR TENDERING IN THE U.S. OFFER -- HOLDERS OF GDSS

     To tender GDSs pursuant to the U.S. Offer,

     - if you hold GDSs in certificated form, a properly completed and duly
       executed GDS Letter of Transmittal (or a copy thereof with original
       signatures) together with the GDRs for the GDSs to be tendered and all
       other documents required by the GDS Letter of Transmittal must be
       received by the U.S. Receiving Agent at one of its addresses set forth on
       the back cover of this U.S. Offer to Purchase by the expiration date,

     - if you hold the GDSs in book-entry form, the GDSs must be delivered to
       the U.S. Receiving Agent pursuant to the procedures for book-entry
       transfer described below, and a confirmation of such delivery must be
       received by the expiration date by the U.S. Receiving Agent, as well as a
       properly completed and duly executed GDS Letter of Transmittal (or a copy
       thereof with original signatures) or an Agent's Message, as defined
       below, by the expiration date. Alternatively, you may be able to use the
       guaranteed delivery procedure described below.

     The term "Agent's Message" means a message, transmitted by DTC to, and
received by, the U.S. Receiving Agent and forming a part of a book-entry
confirmation which states that DTC has received an express acknowledgment from
the participant tendering the GDSs which are the subject of such book-entry
confirmation that such participant has received and agrees to be bound by the
terms of the GDS Letter of Transmittal and that we may enforce such agreement
against such participant.

     Book-entry transfer.  The U.S. Receiving Agent will establish an account
with respect to the GDSs with DTC for purposes of the U.S. Offer within two U.S.
business days after the date of this U.S. Offer to Purchase, and any financial
institution that is a participant in the Automated Tender Offer Program at

                                        28


DTC may make delivery of GDSs by causing DTC to transfer such GDSs into the U.S.
Receiving Agent's account in accordance with the procedures of DTC. Any broker,
dealer, bank, trust company or other nominee acting on your behalf that is a
participant at DTC may make delivery of GDSs by causing DTC to transfer such
GDSs into the U.S. Receiving Agent's account with DTC in accordance with the
procedures of DTC. In order to effect a tender of the GDSs you beneficially own,
you should promptly contact your nominee and instruct it to tender such GDSs by
completing, signing and returning to your nominee the instruction form attached
to the letter from your nominee which is included in the material you received
in connection with the U.S. Offer.

     In order for a book-entry transfer to constitute a valid tender of your
GDSs in the U.S. Offer, a properly completed and duly signed GDS Letter of
Transmittal or an Agent's Message instead of the GDS Letter of Transmittal, and
any other required documents must, in any case, be received by the U.S.
Receiving Agent at one of its addresses set forth on the back cover of this U.S.
Offer to Purchase by the expiration date.

     DELIVERY OF THE GDS LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS
TO DTC DOES NOT CONSTITUTE DELIVERY TO THE U.S. RECEIVING AGENT.

     Guaranteed Delivery Procedures.  If you are a holder of the GDSs and wish
to tender your GDSs, but

     - the GDRs evidencing the GDSs are not immediately available;

     - time will not permit your GDRs evidencing the GDSs or other required
       documents to reach the U.S. Receiving Agent before the expiration of the
       U.S. Offer; or

     - the procedure for book-entry transfer cannot be completed before the
       expiration of the U.S. Offer,

     you may effect a tender of your GDSs if:

     - the tender is made through an eligible guarantor institution, as defined
       below;

     - prior to the expiration of the U.S. Offer, the U.S. Receiving Agent
       receives from an eligible guarantor institution a properly completed and
       duly executed Notice of Guaranteed Delivery, substantially in the form we
       have provided, setting forth your name and address, and the amount of
       GDSs you are tendering and stating that the tender is being made by
       notice of guaranteed delivery; these documents may be sent by overnight
       courier, registered or certified mail or facsimile transmission; and

     - the U.S. Receiving Agent receives (i) in case you hold GDSs in
       certificated form, the GDRs for all physically tendered GDSs, in proper
       form for transfer, together with a properly completed and duly executed
       GDS Letter of Transmittal, with any required signature guarantees, and
       all other required documents or (ii) in case you hold the GDSs in
       book-entry form, a book-entry confirmation of the transfer of the GDSs
       into the U.S. Receiving Agent account at DTC, together with a properly
       completed and duly executed GDS Letter of Transmittal or an Agent's
       Message that forms a part of the book-entry confirmation instead of a GDS
       Letter of Transmittal, in each case, within three NYSE trading days after
       the date of execution of the Notice of Guaranteed Delivery.

     Partial tenders.  If fewer than all of the GDSs evidenced by GDRs delivered
to the U.S. Receiving Agent are to be tendered, the holder thereof should so
indicate in the GDS Letter of Transmittal by filling in the number of GDSs which
are to be tendered in the box entitled "Number of GDSs Tendered" in the GDS
Letter of Transmittal. In such case, a new GDR for the untendered GDSs
represented by the old GDR will be sent to the person(s) signing such GDS Letter
of Transmittal (or delivered as such person properly indicates thereon) as
promptly as practicable following the date the tendered GDSs are accepted for
payment.

                                        29


     ALL GDSs DELIVERED TO THE U.S. RECEIVING AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED. SEE INSTRUCTION 4 OF THE GDS LETTER OF
TRANSMITTAL.

     Signature guarantees.  Signatures on a GDS Letter of Transmittal or a
notice of withdrawal, as the case may be, must be guaranteed unless you are
either:

     - a registered holder of GDSs and have not completed the box entitled
       "Special Issuance Instructions" or "Special Delivery Instructions" on the
       GDS Letter of Transmittal; or

     - you are tendering GDSs for the account of an eligible guarantor
       institution.

     An eligible guarantor institution means a financial institution that is a
participant in the Security Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or The New York Stock Exchange, Inc. Medallion
Signature Program.

     If signatures on a GDS Letter of Transmittal or a notice of withdrawal are
required to be guaranteed, the guarantor must be an eligible guarantor
institution. If you plan to sign the GDS Letter of Transmittal but you are not
the registered holder of the GDSs, you must have the GDS Letter of Transmittal
signed by the registered holder of the GDSs and that signature must be
guaranteed by an eligible guarantor institution. You may also send a separate
instrument of transfer or exchange signed by the registered holder and
guaranteed by an eligible guarantor institution, but that instrument must be in
a form satisfactory to us in our sole discretion. In addition, if a person or
persons other than the registered holder or holders of GDSs signs the GDS Letter
of Transmittal, certificates for the GDSs must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holder or holders that appear on the certificates for GDSs.

     Acceptance of U.S. Offer and representations by holder.  The tender of GDSs
pursuant to any one of the procedures described above will constitute the
tendering security holder's acceptance of the U.S. Offer, as well as the
tendering security holder's representation and warranty that such security
holder has the full power and authority to tender and assign the GDSs tendered,
as specified in the GDS Letter of Transmittal. Our acceptance for payment of
GDSs tendered pursuant to the U.S. Offer will constitute a binding agreement
between us and the tendering security holder containing the terms and conditions
of the U.S. Offer.

     Matters concerning validity, eligibility and acceptance.  All questions as
to the form of documents and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of GDSs will be determined by
us, in our sole discretion, which determination shall be final and binding. We
reserve the absolute right to reject any or all tenders of GDSs determined by us
not to be in proper form or the acceptance for payment of or payment for which
may, in the opinion of our counsel, be unlawful. We also reserve the absolute
right to waive any defect or irregularity in any tender of GDSs. None of us, BG
LLC, PBG, the U.S. Dealer Manager, the U.S. Receiving Agent, the Mexican
Receiving Agent, the Information Agent or any other person will be under any
duty to give notification of any defect or irregularity in tenders or incur any
liability for failure to give any such notification.

     THE METHOD OF DELIVERY OF GDSs AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING
THROUGH THE DEPOSITARY TRUST COMPANY, IS AT THE OPTION AND RISK OF THE TENDERING
SECURITY HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED
BY THE U.S. RECEIVING AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE A TIMELY DELIVERY. REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED FOR GDSs SENT BY MAIL.

     If you are in any doubt about the procedure for tendering GDSs into the
U.S. Offer, please contact the Information Agent or the U.S. Receiving Agent at
their respective addresses as they appear on the back cover of this U.S. Offer
to Purchase.

                                        30


WITHDRAWAL RIGHTS

     Tenders of Securities made pursuant to the U.S. Offer may be withdrawn at
any time prior to the expiration date, as it may be extended at any time and
from time to time in our sole discretion subject to applicable law. Thereafter,
such tenders are irrevocable, except that they may be withdrawn after December
6, 2002, unless they are accepted for payment as provided in this U.S. Offer to
Purchase. If we extend the period of time during which the U.S. Offer is open,
are delayed in accepting for payment or paying for Securities, or are unable to
accept for payment or pay for Securities pursuant to the U.S. Offer for any
reason, then, without prejudice to our rights under the U.S. Offer, the U.S.
Receiving Agent and the Mexican Receiving Agent, as the case may be, may, on our
behalf, retain all the Securities tendered, unless such Securities are withdrawn
in accordance with the procedure described in the paragraph below. Any such
delay will be an extension of the U.S. Offer to the extent required by law.

     For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the U.S.
Receiving Agent or the Mexican Receiving Agent, as the case may be, at their
respective addresses set forth on the back cover of this U.S. Offer to Purchase
and must specify the name of the person who tendered the Securities to be
withdrawn, the number of Securities to be withdrawn and the name of the
registered holder of the Securities, if different from that of the person who
tendered such Securities. If the Securities to be withdrawn have been delivered
to either of the receiving agents for the U.S. Offer, a signed notice of
withdrawal must be submitted prior to the acceptance of such Securities for
payment by us, together with, in the case of withdrawals of GDSs (except in the
case of GDSs tendered by an eligible guarantor institution), signatures
guaranteed by an eligible guarantor institution. In addition, such notice must
specify, in the case of GDSs tendered by delivery of GDRs, the name of the
registered holder (if different from that of the tendering security holder) and
the serial numbers shown on the particular GDRs evidencing the GDSs to be
withdrawn or, in the case of Securities tendered by book-entry transfer, the
name and participant number at DTC or Indeval, as the case may be, to be
credited with the withdrawn Securities. Withdrawals may not be rescinded, and
Securities withdrawn will thereafter be deemed not validly tendered for purposes
of the U.S. Offer. However, withdrawn Securities may be re-tendered by again
following one of the procedures described in this U.S. Offer to Purchase, as
applicable, at any time prior to the expiration date. The withdrawal rights in
the Mexican Offer are similar to the withdrawal rights in the U.S. Offer.

     All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by us, in our sole discretion, which
determination shall be final and binding. Neither we, BG LLC, PBG, the U.S.
Dealer Manager, the U.S. Receiving Agent, the Mexican Receiving Agent, the
Information Agent nor any other person will be under any duty to give
notification of any defect or irregularity in any notice of withdrawal or incur
any liability for failure to give any such notification.

EXTENSION OF TENDER PERIOD; AMENDMENT AND TERMINATION

     We may extend the U.S. Offer when we are required to do so under applicable
laws and regulations. For example, if we decrease the percentage of Securities
being sought or decrease the consideration to be paid for Securities pursuant to
the U.S. Offer, assuming we have received the consent of Mr. Molina and PepsiCo
to such amendments under the Molina Agreement to Tender and PepsiCo Agreement to
Tender, and the U.S. Offer is scheduled to expire at any time before the
expiration of a period of ten U.S. business days from, and including, the date
that notice of such increase or decrease is first published, sent or given in
the manner specified below, the U.S. Offer will be extended until the expiration
of such period of ten U.S. business days. We currently do not intend to decrease
the percentage of, or increase or decrease the consideration to be paid for,
Securities to be purchased in the U.S. Offer. If we make a material change in
the terms of the U.S. Offer (other than a change in price or percentage of
securities sought) or in the information concerning the U.S. Offer, or waive a
material condition of the U.S. Offer, we will extend the U.S. Offer, if required
by applicable law, for a period sufficient to allow security holders to consider
the amended terms of the U.S. Offer. In a published release, the SEC has stated
that in its view an offer must remain open for a minimum period of time
following a material change in the terms of such offer. The release states that
an offer should remain open for a minimum of five U.S. business days from the
date the

                                        31


material change is first published, sent or given to security holders, and that
if material changes are made with respect to information that approaches the
significance of price and share levels, a minimum of ten U.S. business days may
be required to allow adequate dissemination and investor response.

     In addition, under the Molina Agreement to Tender and the PepsiCo Agreement
to Tender, if on or prior to the initial expiration date the conditions to
either of the Offers set forth in the U.S. Offer under the caption "The U.S.
Offer -- Certain conditions to the U.S. Offer" and in the Mexican Offer are
satisfied, we may extend the expiration date of the Offers for a period of not
more than five business days after such initial expiration date, solely to
increase the number of Securities to be tendered in the Offers. If, on the other
hand, the conditions to either of the Offers are not satisfied or waived by us
on or prior to the initial expiration date, we are required to extend the Offers
until all such conditions have been satisfied or waived, but not more than ten
business days after the initial expiration date. In the event that the
conditions to either of the Offers are still not satisfied or waived by us, we
have the right, at our sole discretion, to terminate the Offers after such ten
business days extension has expired or to further extend the Offers for an
additional ten business days. Under the Molina Agreement to Tender and the
PepsiCo Agreement to Tender, an extension of the Offers for any other reason or
under any other circumstances requires the consent of Mr. Molina and PepsiCo,
respectively, unless such extension is required by applicable laws and
regulations.

     We may amend the U.S. Offer at any time in our sole discretion to increase
the price we are offering to pay for the Securities. We may also reduce the
purchase prices we are offering by the amount of all dividends for which a
payment date is announced or published by Gemex on or prior to the expiration
date and which is payable after the date of this U.S. Offer and prior to the
date of purchase of the Securities pursuant to the Offers, if any. Except as set
forth in this and the preceding paragraph, under the Molina Agreement to Tender
and the PepsiCo Agreement to Tender we may not reduce the price we are offering
to pay or the number of Securities sought in the Offers or otherwise materially
amend the Offers in any manner materially adverse to Mr. Molina or PepsiCo,
without the consent of Mr. Molina or PepsiCo, as the case may be.

     We also reserve the right, in our sole discretion, in the event any of the
conditions to the U.S. Offer is not satisfied and so long as Securities have not
been accepted for payment, to delay (except as otherwise required by applicable
law) acceptance for payment of, or payment for Securities.

     If we extend the period of time during which the U.S. Offer is open, are
delayed in accepting for payment or paying for Securities, or are unable to
accept for payment or pay for Securities pursuant to the U.S. Offer for any
reason, then, without prejudice to our rights under the U.S. Offer, the U.S.
Receiving Agent and the Mexican Receiving Agent, as the case may be, may, on our
behalf, retain all the Securities tendered, unless such Securities are withdrawn
in accordance with the procedure set forth above under the caption "Withdrawal
rights." The reservation by us of the right to delay acceptance for payment of
or payment for Securities is subject to applicable law, which requires that we
pay the consideration offered or return the Securities deposited by or on behalf
of security holders promptly after the termination or withdrawal of the U.S.
Offer. While we intend to make the offer periods and settlement dates for the
Mexican Offer and for this U.S. Offer the same, it is possible that the
settlement dates will be different due to requirements of applicable law and/or
market practice.

     We will inform the Information Agent, the U.S. Dealer Manager, the U.S.
Receiving Agent and the Mexican Receiving Agent of any extension, amendment or
termination of the U.S. Offer and, without limiting the manner in which we may
choose to make any public announcement, we will not have any obligation (except
as otherwise required by applicable law) to publish, advertise or otherwise
communicate any such public announcement other than by making a press release to
the Dow Jones News Service, not later than 9:00 a.m., New York City time, on the
U.S. business day after the day on which the U.S. Offer was scheduled to expire.
During any such extension, all Securities previously tendered in the U.S. Offer
and not withdrawn will remain subject to the U.S. Offer, subject to the rights
of a tendering holder to withdraw its Securities in accordance with the
procedures set forth above.

                                        32


REPRESENTATIONS AND WARRANTIES OF TENDERING SECURITY HOLDERS

     Each holder of Securities, by tendering its Securities in the U.S. Offer,
irrevocably undertakes, represents, warrants and agrees (so as to bind the
holder and the holder's personal representatives, heirs, successors and assigns)
as follows:

          1. in the event of tender of Shares and CPOs, that it is not a Mexican
     resident;

          2. that it has the full power and authority to tender and assign the
     Securities tendered, as specified in the GDS Letter of Transmittal and that
     our acceptance for payment of Securities tendered pursuant to the U.S.
     Offer will constitute a binding agreement between us and the tendering
     security holder containing the terms and conditions of the U.S. Offer;

          3. in the event of tender of Shares and CPOs, that the Mexican Dealer
     Manager withhold 5% of the gross proceeds to be paid by us to such holder,
     and to waive the option available to such holder under Mexican tax law to
     have a 20% income tax withholding on the gain, if any, that would be
     generated by the sale of its Shares and/or CPOs in the U.S. Offer, and any
     other applicable tax treatment for purposes of calculating any income tax
     withholding, notwithstanding the holder's tax treatment under the Mexican
     Income Tax Statute, tax residency and/or any other circumstance, without
     prejudice to the right that such holder may have to claim any applicable
     tax refund from Mexican tax authorities for the withheld amounts, or to
     claim an income tax credit;

          4. that the execution of a GDS Letter of Transmittal shall constitute:
     (i) an acceptance of the U.S. Offer in respect of the number of Securities
     identified therein, (ii) an undertaking to execute all further documents
     and give all further assurances which may be required to enable us to
     obtain the full benefit and to obtain title to the tendered Securities, and
     (iii) that each such acceptance shall be irrevocable;

          5. that the Securities in respect to which the U.S. Offer is accepted
     or deemed to be accepted are fully paid and non-assessable, sold free from
     all liens, equities, charges and encumbrances and together with all rights
     now or hereafter attaching thereto, including voting rights and the right
     to all dividends or other distributions hereafter declared, made or paid;

          6. that the execution of the GDS Letter of Transmittal constitutes,
     subject to the accepting holder not having validly withdrawn his or her
     acceptance, the irrevocable appointment of U.S. Receiving Agent and its
     directors and agents as such holder's attorney-in-fact and an irrevocable
     instruction to the attorney-in fact to complete and execute any and all
     form(s) of transfer and/or other document(s) which are necessary or
     required at the discretion of the attorney-in-fact in order to transfer the
     Securities in respect of which the tendering holder of Securities has not
     validly withdrawn its tender, in our name or such other person or persons
     as we may direct, and to deliver such form(s) of transfer and/or other
     document(s) together with other document(s) of title relating to such
     Securities and to do all such other acts and things as may in the opinion
     of the attorney-in-fact be necessary or required for the purpose of, or in
     connection with, the acceptance of the U.S. Offer and to vest title to the
     Securities in us or our nominees as aforesaid;

          7. that the execution of the GDS Letter of Transmittal constitutes,
     subject to the tendering holder of Securities not having validly withdrawn
     its tender, an irrevocable authority and request (i) to Gemex and its
     directors, officers and agents, to procure the registration of the transfer
     of the Securities pursuant to the U.S. Offer and the delivery of any and
     all document(s) of title in respect thereof to us or our nominees; and (ii)
     to us or our agents, to record and act upon any instructions with regard to
     notices and payments which have been recorded in the records of Gemex in
     respect of such holder's holding(s) of Securities; and

          8. that it agrees to ratify each and every act or thing which may be
     done or effected by us or any of our directors or agents or Gemex or its
     agents, as the case may be, in the proper exercise of the power and/or
     authorities of any such person.

                                        33


SOURCES OF FUNDS

     PBG intends to issue commercial paper in an amount of up to $1.2 billion
prior to the expiration date of the Offers. The commercial paper will bear
interest at a rate to be determined immediately prior to or on the date of its
issuance. The proceeds of this issuance will be used to finance the Offers and
to refinance a portion of the indebtedness of Gemex following the consummation
of the Offers. As support for the commercial paper, PBG has entered into a
bridge revolving credit facility with Salomon Smith Barney Inc., Deutsche Bank
Securities Inc. and Credit Suisse First Boston Corporation, as joint lead
arrangers, Citibank N.A., Credit Suisse First Boston, Cayman Islands Branch and
Deutsche Bank AG New York Branch, as joint syndication agents, and certain
lenders specified in the bridge revolving credit facility agreement, to provide
up to $1.2 billion. The bridge revolving credit facility is guaranteed by BG
LLC. Borrowings under the bridge revolving credit facility may be repaid and
reborrowed until April 30, 2003, when the term of the bridge revolving credit
facility expires. Borrowings will bear interest, at the option of PBG, at the
base rate (i.e., prime rate) of Credit Suisse First Boston or LIBOR plus an
applicable margin determined by reference to PBG's credit rating. The bridge
revolving credit facility is unsecured. PBG does not anticipate borrowing under
the bridge revolving credit facility unless and to the extent that it does not
issue commercial paper as described above.

     PBG, through BG LLC, will provide us with the funds raised by it to
purchase all the Securities validly tendered and not withdrawn in the Offers.
Any remaining funds necessary to consummate the Offers and refinance a portion
of the indebtedness of Gemex will be provided by BG LLC from available cash or
borrowings utilizing existing credit facilities of BG LLC.

     However, the Offers are not conditioned upon the receipt by PBG of the
proceeds of either such financing or the advance of such funds to BG LLC or
Embotellador HM. PBG expects to repay the commercial paper and/or the bridge
revolving credit facility, as the case may be, with funds provided by BG LLC
from the proceeds of a private placement of debt securities of BG LLC expected
to be completed after the consummation of the Offers. Up to $1.0 billion of debt
securities are expected to be guaranteed by PepsiCo.

CERTAIN TAX CONSIDERATIONS

     Material U.S. federal income tax consequences.

     The following is a summary of the material United States federal income tax
consequences of the U.S. Offer to holders of Securities whose Securities are
tendered and accepted for payment in the U.S. Offer. The discussion is for
general information only and does not purport to consider all aspects of United
States federal income taxation that might be relevant to holders of Securities.
The discussion is based on current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), existing, proposed and temporary regulations
promulgated thereunder and administrative and judicial interpretations thereof,
all of which are subject to change, possibly with a retroactive effect. The
discussion applies only to holders of Securities who hold their Securities as
capital assets within the meaning of Section 1221 of the Code. This discussion
does not apply to Securities received pursuant to the exercise of employee stock
options or otherwise as compensation, or to certain types of holders who may be
subject to special rules such as the following:

     - insurance companies;

     - regulated investment companies;

     - common trust funds;

     - tax-exempt organizations;

     - banks or other financial institutions;

     - broker-dealers;

                                        34


     - holders who have acquired the Securities as part of a straddle, hedge,
       conversion transaction or other integrated investment; or

     - persons who own or owned, directly or indirectly, 10% or more of the
       total combined voting power of all classes of stock of Gemex entitled to
       vote.

     This discussion does not consider the effect of any foreign, state or local
tax laws nor does it discuss the United States federal income tax consequences
to any holder of Securities who, for United States federal income tax purposes,
is not a "U.S. Holder" (as defined below). As used in this discussion, the term
"U.S. Holder" means a beneficial owner of Securities that is any of the
following for United States federal income tax purposes:

     - an individual who is a citizen or resident of the United States;

     - a corporation or partnership, or other entity treated as a corporation or
       partnership, created or organized under the laws of the United States or
       any State or any political subdivision thereof;

     - an estate the income of which is subject to United States federal income
       taxation regardless of its source; or

     - a trust, if a United States court is able to exercise primary supervision
       over the trust's administration and one or more United States persons
       have the authority to control all of the trust's substantial decisions.

     If a partnership or other entity treated as a pass-through for United
States federal income tax purposes holds Securities, the tax treatment of an
owner of such entity will depend upon the status of the partner or the owner of
such entity and the activities of the entity. If a U.S. Holder is a partner of a
partnership holding Securities or an owner of another entity holding Securities
which is treated as a pass-through for United States federal income tax
purposes, such holder is urged to consult its tax advisors.

     Sale of Shares, CPOs and/or GDSs. The sale of Securities for cash pursuant
to the U.S. Offer will be a taxable transaction for United States federal income
tax purposes and possibly for state, local and foreign income tax purposes as
well. In general, a U.S. Holder who sells Securities pursuant to the U.S. Offer
will recognize gain or loss for United States federal income tax purposes equal
to the difference, if any, between the amount of cash received and the holder's
adjusted tax basis in the Securities sold pursuant to the U.S. Offer. Gain or
loss will be determined separately for each block of Securities (i.e.,
Securities acquired at the same cost in a single transaction) tendered pursuant
to the U.S. Offer. Such gain or loss will be long-term capital gain or loss
provided that a holder's holding period for such Securities is more than one
year at the time of the consummation of the U.S. Offer. Long-term capital gains
recognized by an individual upon a disposition of Securities are eligible for
reduced rates of taxation. Certain limitations apply to the use of a holder's
capital losses.

     If Mexican income tax is withheld with respect to the disposition of Shares
or CPOs by a U.S. Holder, a U.S. Holder who qualifies for exemption under the
income tax treaty in effect between the United States and Mexico or under
Mexican tax law from the imposition of Mexican tax on capital gains arising from
such disposition should apply for a refund of such withholding tax with the
appropriate Mexican agency. Such U.S. Holder will not be entitled to claim a
foreign tax credit with respect to such tax for U.S. federal income tax
purposes.

     The conversion of GDSs by U.S. Holders in exchange for CPOs will not be
taxable for United States federal income tax purposes. U.S. Holders should take
an adjusted tax basis in the CPOs immediately after such exchange equal to their
adjusted tax basis immediately before such exchange in the GDSs exchanged
therefor, plus the amount of the fee paid to the Depositary in order to
effectuate such conversion.

     Passive Foreign Investment Company. The above discussion assumes that Gemex
is not a passive foreign investment company ("PFIC") with respect to any holder
of Securities. Generally, Gemex would be a PFIC with respect to a U.S. Holder
if, during any year during such holder's holding period, 75% or

                                        35


more of Gemex's annual gross income consisted of certain "passive" income or 50%
or more of the average value of Gemex's assets in any such year consisted of
assets that produced, or were held for the production of, such passive income.
Based on information provided in Gemex's Annual Report, we do not believe that
Gemex is a PFIC for the current year, and we assume that Gemex was not a PFIC
with respect to any previous year.

     If Gemex were a PFIC with respect to any U.S. Holder, such holder generally
would be required to pay an interest charge together with tax calculated at the
maximum ordinary income tax rate with respect to all or a portion of its gain
from the sale of Securities for cash pursuant to the U.S. Offer. This special
PFIC rule generally would not apply to the sale of Securities for cash pursuant
to the U.S. Offer, however, if, in the first year of such holder's ownership of
Securities that Gemex was a PFIC ("Initial Year"), the holder either (x) made an
election to treat Gemex as a qualified electing fund to include in income on a
current basis such holder's share of the income or gain of Gemex ("QEF
Election") or (y) made an election ("Mark-to-Market Election") to recognize on a
current basis increases or decreases in the value of the holder's Securities. If
the holder did not make a QEF Election in the Initial Year but did make a QEF
Election in a subsequent year, the special PFIC rule also generally would not
apply if such holder had made an additional election ("Purging Election") to
include certain amounts in income with respect to its Securities in the year the
Purging Election was made.

     Any U.S. Holder who believes that Gemex is or may be a PFIC with respect
such holder is urged to consult its tax advisors.

     Information Reporting and Backup Withholding. A U.S. Holder whose
Securities are purchased in the U.S. Offer may be subject to information
reporting. In addition, a U.S. Holder of Securities may be subject to backup
withholding at the rate of 30% on the proceeds from the sale of Securities
pursuant to the U.S. Offer unless such holder is an exempt recipient (such as a
corporation) or provides the respective U.S. or Mexican Receiving Agent with the
holder's correct taxpayer identification number and certifies that such holder
is exempt from or otherwise not subject to backup withholding by completing the
Substitute Form W-9 included with the GDS Letter of Transmittal. Backup
withholding is not an additional tax. The amount of any backup withholding will
be allowed as a credit against the United States federal income tax liability of
any holder subject to backup withholding. In addition, procedures are available
to holders subject to backup withholding to obtain a refund of the amount of any
excess backup withholding. For further information concerning backup withholding
and instructions for completing the Substitute Form W-9, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9."

     BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, HOLDERS OF SECURITIES ARE
URGED TO CONSULT THEIR TAX ADVISORS TO DETERMINE THE APPLICABILITY OF THE RULES
DISCUSSED ABOVE AND THE SPECIFIC TAX CONSEQUENCES OF THE U.S. OFFER TO THEM,
INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM TAX, AND ANY
STATE, LOCAL AND FOREIGN TAX LAWS AND OF CHANGES IN SUCH LAWS.

Material Mexican income tax consequences

     Gemex is a company incorporated and existing under Mexican law. Generally,
under the Mexican Income Tax Statute ("MITS"), the sale of stock issued by a
Mexican company generates Mexican-source income that is subject to income tax in
Mexico, without regard to the tax residency of the seller. However, gain from
the sale of stock of a Mexican company that is traded over a recognized
securities market is exempt from Mexican income tax in certain cases, as
described below.

 Mexican residents

     - Mexican resident individuals who were not security holders of Gemex when
      its securities became publicly traded.  A Mexican resident individual who
      derives income from the sale of stock of a Mexican company in a sale of
      shares over a recognized securities exchange designated as such

                                        36


      under the Ley de Mercado de Valores, which we refer to as the "Mexican
      Securities Law," or a securities exchange located in a country with which
      Mexico has entered into a double taxation treaty is exempt from Mexican
      income tax on such sale. The same tax treatment is applicable to the sale
      of depositary receipts issued by a non-Mexican financial institution with
      reference to stock of a Mexican entity, such as the GDSs, that are traded
      in a non-Mexican securities exchange, located in a country with which
      Mexico has entered into a double taxation treaty. In this latter case,
      Mexican resident individuals will have to file an annual tax return
      declaring capital gains derived from the sale of such depositary receipts.
      Failure to file such return will void the exemption referred in this
      paragraph only for capital gains derived from the sale of these depositary
      receipts.

     - Mexican resident individuals who were security holders of Gemex when its
      securities became publicly traded.  Income derived by individuals who were
      security holders of Gemex when its securities became publicly traded
      (i.e., Gemex registered before the RNV) will qualify for the exemption
      only if the following conditions are met:

        - five uninterrupted years have elapsed since the initial public
          offering of Gemex;

        - at least 35% of the subscribed and paid stock of Gemex is publicly
          traded, as defined by the Mexican administrative regulations issued by
          the Ministry of Finance and Public Credit;

        - the tender offer comprises all the classes of stock of Gemex and is at
          the same price per share for all security holders, and

        - all security holders are entitled to accept more favorable offers,
          without incurring any penalties.

        Failure to comply with any of the requirements mentioned above will
        cause the sale to be taxable for that particular security holder.

     - Mexican resident entities.  Mexican resident entities will be subject to
      income tax in Mexico for capital gains derived from the sale of stock over
      a securities exchange at the Mexican statutory corporate tax rate of 35%.

  Non-Mexican residents

     In general, the sale of stock issued by a Mexican company will create
Mexican-source income that is taxable to a non-Mexican resident in Mexico.
Certain exemptions apply to stock or depositary receipts that are traded over a
recognized securities market, as described below:

     - Non-Mexican resident individuals who were not security holders of Gemex
      when its securities became publicly traded.  The sale of stock by a
      non-Mexican resident individual in a transaction traded over a recognized
      securities exchange designated as such under the Mexican Securities Law or
      a securities exchange located in a country with which Mexico has entered
      into a double taxation treaty is exempt from income tax in Mexico. The
      same tax treatment is applicable to depositary receipts issued by a
      non-Mexican financial institution with reference to stock issued by a
      Mexican entity, such as the GDSs, that are traded in a non-Mexican
      securities exchange located in a country with which Mexico has entered
      into a double taxation treaty.

     - Non-Mexican resident individuals who were security holders of Gemex when
      its securities became publicly traded.  In tender offers, income derived
      by non-Mexican resident individuals who were security holders of Gemex
      when its securities became publicly traded (i.e., Gemex was registered
      before the RNV) will be exempt if the conditions mentioned above under the
      caption "-- Mexican resident individuals -- Mexican resident individuals
      who were security holders of Gemex when its securities became publicly
      traded" are met. Otherwise, such individual will be taxed.

     - Non-Mexican resident entities that were not security holders of Gemex
      when its securities became publicly traded.  In the case of non-Mexican
      resident entities, income derived from the sale of stock issued by a
      Mexican company, or of depositary receipts issued by a non-Mexican
      financial institution with reference to stock issued by a Mexican company,
      such as the GDSs, that are traded over a securities exchange, will be
      taxable in Mexico. However, certain administrative regulations

                                        37


      currently allow such transactions to be exempted if the stock or
      depositary receipt is traded over a recognized securities exchange
      designated as such under the Mexican Securities Law or a securities
      exchange located in a country with which Mexico has entered into a double
      taxation treaty, provided certain conditions are met.

     - Non-Mexican resident entities that were security holders of Gemex when
      its securities became publicly traded.  As in the case of non-Mexican
      resident individuals, should a non-Mexican resident entity be a security
      holder of Gemex at the time its securities became publicly traded, the
      conditions mentioned above under the caption "-- Mexican resident
      individuals -- Mexican resident individuals who were security holders of
      Gemex when it became publicly traded" will have to be met in order for the
      sale in a public tender offer to be exempted from income tax in Mexico.

     Tax basis in shares of Gemex stock for Mexican tax purposes.  Under recent
Mexican tax legislation, for purposes of calculating taxable income, the tax
basis is the higher of:

     - the average of the last twenty two (22) stock quotes in the calendar year
       2001 of the shares being transferred, or

     - the tax basis of the shares being transferred under the normal tax basis
       rules as provided in the MITS (i.e., the acquisition price, plus (minus)
       certain adjustments).

If the stock quotes used under the first method listed above are "unusual," then
the taxpayer must use the average stock quotes for the last six months of the
calendar year 2001. The MITS does not define the standard to be used in
determining whether the quotes are "unusual."

 Mexican withholding tax consequences

     - Withholding tax consequences for Mexican resident individuals and
      non-Mexican residents.  If the sale is taxable to a Mexican individual or
      to a non-Mexican resident (whether or not such resident is an individual
      or an entity), the "broker in charge of the sale" will have to withhold
      20% of the taxable profits derived in the transaction. For purposes of
      determining the taxpayer's gain, the basis rules outlined above in "-- Tax
      basis in shares of Gemex stock for Mexican tax purposes" are applicable.
      Alternatively, the "broker in charge of the transaction" may withhold 5%
      of the gross proceeds of the sale at the election of the seller. The
      taxpayer may take a credit for any Mexican income taxes owed or request a
      refund for any taxes withheld by the "broker in charge of the sale" with
      the appropriate documentation (see "-- Accival's intention to withhold on
      Shares and/or CPOs tendered" below). The MITS and its current regulations
      do not define who is considered to be the "broker in charge of the sale."

     - Withholding tax consequences for Mexican resident entities.  Under the
      MITS, the "broker in charge of the sale" has no obligation to withhold
      from the proceeds of the sale payable to a Mexican resident entity.

     - Withholding tax consequences for U.S. beneficiaries of the U.S.-Mexican
      Tax Treaty.  Mexico has entered into certain treaties to avoid double
      taxation, pursuant to which Mexico will not tax capital gains in certain
      cases, if the effective beneficiary is resident of a country with which
      Mexico has entered into such a treaty. In the case of the U.S.-Mexico
      Treaty, Mexico will be precluded from imposing taxes on capital gains,
      unless (i) 50% or more of the value of such U.S. entity's shares is
      represented by real estate situated in Mexico; (ii) the U.S. holder owned
      more than 25% of the outstanding shares (including GDSs) of Gemex,
      directly or indirectly, during the preceding 12-month period; or (iii) the
      gain is attributable to a permanent establishment or fixed base of the
      U.S. holder in Mexico. The application of the treaty will override any
      Mexican internal provision in this respect.

     - Accival's intention to withhold on Shares and/or CPOs tendered.  The
      recent changes to the MITS outlined above are unclear with respect to
      whether the Mexican Dealer Manager has an obligation to withhold Mexican
      income tax on any proceeds to be received by holders of Shares and/or
      CPOs. The Mexican Dealer Manager has requested a ruling from the Mexican
      tax authorities in order to

                                        38


      clarify some of the issues in the Mexican tax legislation with regard to
      its obligation to withhold on the proceeds of this tender offer. However,
      the Mexican Dealer Manager has not received a response as of the date of
      this Offer. As a result of the uncertainty in this legislation, as well as
      practical difficulties in determining the identity of holders, the Mexican
      Dealer Manager currently intends to require all holders of Shares and/or
      CPOs, through their custodians, to consent to a 5% income tax withholding
      by the Mexican Dealer Manager on the gross proceeds to be paid by
      Embotellador HM to each holder. As part of this consent, the holder will
      also be required to:

        - acknowledge that the Mexican Dealer Manager will not apply any other
          mechanism of withholding or income tax exemption provided under
          Mexican Law or under any tax treaty to avoid double taxation and such
          holder agrees not to exercise the option to have a 20% income tax
          withholding on the gain, if any, and

        - release, under all circumstances, the Mexican Dealer Manager from any
          liability related to any claim brought against such holder arising
          from a withholding made as described above.

     The foregoing does not preclude any holder from enforcing any rights it may
     have before the appropriate tax authorities.

     The 5% income tax withholding will be delivered by the Mexican Dealer
     Manager to the Ministry of Finance and Public Credit on behalf of the
     holders of Shares and CPOs. The holders may, through their custodian,
     request from the Mexican Dealer Manager a withholding certificate that will
     enable them to claim any applicable tax refund from the Ministry of Finance
     and Public Credit or to credit on income tax. In order for the Mexican
     Dealer Manager to issue the relevant withholding certificates, the
     custodian must deliver to the Mexican Dealer Manager, together with the
     Acceptance Letter, the following information:

        - the number of Shares and/or CPOs tendered by the holder,

        - the full name of the holder,

        - the tax domicile of the holder,

        - the federal tax identification number (RFC) of the holder (only
          Mexican tax residents), and

        - the CURP of the Holder (identity card code for Mexican residents).

     Any amount withheld by a "broker in charge of the sale" must be deposited
     with the Ministry of Finance and Public Credit within the first seventeen
     days of the month following the time of the transaction. Failure to
     withhold and to file the required return as required by law will cause the
     "broker in charge of the sale" to become jointly liable for the payment of
     taxes. Generally, no withholding obligation exists whenever the transaction
     is exempt from the payment of taxes or if the sale meets certain
     requirements provided in Section 109, paragraph XXVI of the MITS, and the
     CNBV issues a statement certifying that certain facts are true. The CNBV
     has advised that it is currently not issuing any certification pending
     clarification of the relevant tax regulations.

     If, during the Offer period, the Mexican Dealer Manager receives a response
     to its ruling request or the Mexican tax authorities issue any new public
     guidance with respect to a party's obligation to withhold, the applicable
     tax treatment by the Mexican Dealer Manager described in the previous
     paragraphs could be modified to conform to the terms and conditions of any
     such guidance by the tax authorities. If the Mexican Dealer Manager
     determines, in its sole discretion, that the new guidance releases it from
     any obligation to withhold with respect to a particular holder of Shares
     and/or CPOs, then the Mexican Dealer Manager will not withhold from the
     proceeds due to that holder even if the Holder has agreed to such
     withholding pursuant to the terms of the Acceptance Letter.

     In addition, if a holder, through its custodian, delivers to the Mexican
     Dealer Manager a copy of a specific ruling from the Ministry of Finance and
     Public Credit confirming that such holder is exempt from Mexican income tax
     and/or withholding tax in connection with the sale of its Shares and/or
     CPOs, then the Mexican Dealer Manager will not withhold from the proceeds
     due to that holder even if the holder has agreed to such withholding
     pursuant to the terms of the Acceptance Letter.

                                        39


     The U.S. Receiving Agent does not intend to withhold for holders who tender
     GDSs in the U.S. Offer.

     BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, YOU SHOULD CONSULT YOUR TAX
ADVISOR REGARDING THE APPLICABILITY OF THE RULES DISCUSSED ABOVE TO YOU AND THE
PARTICULAR TAX EFFECTS TO YOU OF THE OFFERS.

INFORMATION AGENT, RECEIVING AGENTS, U.S. DEALER MANAGER AND OTHER EXPENSES

     We have retained Salomon Smith Barney Inc. as U.S. Dealer Manager in
connection with the U.S. Offer and as our financial advisor in connection with
the proposed acquisition of all of the capital stock of Gemex. The U.S. Dealer
Manager has not been retained to make solicitations. The U.S. Dealer Manager
will receive reasonable and customary compensation for acting in the foregoing
capacities. We also agreed to reimburse the U.S. Dealer Manager for its
out-of-pocket expenses, including the fees and expenses of legal counsel and
other advisors, incurred in connection with its engagement, and to indemnify the
U.S. Dealer Manager and certain related persons against certain liabilities and
expenses in connection with its engagement, including certain liabilities under
the federal securities laws.

     We have retained The Bank of New York to act as the U.S. Receiving Agent in
connection with the tender of GDSs in the U.S. Offer. The U.S. Receiving Agent
has not been retained to make solicitations or recommendations in its role as
receiving agent. The U.S. Receiving Agent will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
connection therewith, including certain liabilities under the U.S. Federal
securities laws.

     We have retained Acciones y Valores de Mexico, S.A. de C.V., or Accival, to
act as the Mexican Receiving Agent in connection with the tender of Shares and
CPOs in the U.S. Offer and to act as the Mexican Dealer Manager in connection
with the Mexican Offer. Accival has not been retained to make solicitations or
recommendations in its role as receiving agent. Accival will receive reasonable
and customary compensation for its services, will be reimbursed for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection therewith, including certain liabilities under the
U.S. Federal securities laws.

     We have retained Morrow & Co., Inc. to act as the Information Agent in
connection with the U.S. Offer. The Information Agent may contact holders of
Securities by mail, telephone, telex, telegraph and personal interviews and may
request brokers, dealers and other nominee security holders to forward materials
relating to the U.S. Offer to beneficial owners. The Information Agent will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities in connection therewith, including certain
liabilities under the U.S. Federal securities laws.

     The estimated expenses in connection with the U.S. Offer, the Mexican Offer
and the transactions related thereto, are as follows:



TYPE OF EXPENSE                                                  AMOUNT
- ---------------                                                -----------
                                                            
Legal fees and expenses.....................................   $ 3,229,050
Dealer Manager and Financial Advisor........................   $ 1,200,000
Information Agent...........................................   $    12,000
Receiving Agents............................................   $   330,000
Auditors....................................................   $ 4,621,395
Advertising.................................................   $   114,000
Printing....................................................   $    60,468
Filing fees.................................................   $    81,427
Other.......................................................   $ 1,351,660
                                                               -----------
TOTAL.......................................................   $11,000,000


                                        40


CERTAIN LEGAL MATTERS; REGULATORY APPROVALS

     Based on our examination of publicly available information filed by Gemex
with the SEC and other publicly available information concerning Gemex, except
for actions or approvals by the SEC, CNBV, the Mexican Stock Exchange and the
Mexican Federal Competition Commission, neither we nor BG LLC is aware of:

     - any governmental license or regulatory permit that appears to be material
       to Gemex's business that might be adversely affected by our acquisition
       of Securities as contemplated herein;

     - any approval or other action by any government or governmental
       administrative or regulatory authority or agency, domestic or foreign,
       that would be required for the acquisition or ownership of Securities by
       us as contemplated herein; or

     - any approval or other action by any government or governmental
       administrative regulatory authority or agency, domestic or foreign, or
       any consent, waiver or other approval that would be required as a result
       of or in connection with the U.S. Offer.

     Should any such approval or other action be required, we and BG LLC
currently contemplate that such approval or other action will be sought. We and
BG LLC are unable to predict whether such approval or other action may determine
that we are required to delay the acceptance for payment of or payment for
Securities tendered pursuant to the U.S. Offer pending the outcome of any such
matter. There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions or
that if such approvals were not obtained or such other actions were not taken
adverse consequences might not result to Gemex's business or certain parts of
Gemex's business might not have to be disposed of, any of which could cause us
to elect to terminate the U.S. Offer without the purchase of Securities
thereunder. Our obligation under the U.S. Offer to accept for payment and pay
for Securities is subject to certain conditions as described above under the
caption "Certain conditions to the U.S. Offer."

OUR PLANS FOR GEMEX; TRANSACTIONS AND OPERATIONS FOLLOWING THE U.S. OFFER

     Gemex Shares, CPOs and GDSs.  Following the consummation of the U.S. Offer,
we intend to cause Gemex to delist the GDSs from the NYSE, which will result in
the de-registration of the GDSs and the underlying CPOs, Shares, D Shares and L
Shares under Section 12(b) of the Exchange Act. Following the consummation of
the Mexican Offer, we also intend to cause Gemex to deregister its Shares and
CPOs from the RNV and to delist them from the Mexican stock exchange and to
cease being subject to the reporting requirements applicable to publicly traded
companies in Mexico. The consummation of the Offers will also substantially
reduce the number of security holders, and the number of Securities which are
still in the hands of the public after the consummation of the Offers may be so
small that there will no longer be an active public trading market (or,
possibly, there may not be any public trading market) for such Securities.

     In the event that, following the consummation of the Offers, any Securities
remain outstanding, then, to the extent required under Mexican regulations,
prior to the deregistration of the Shares and CPOs from the RNV and their
delisting from the Mexican Stock Exchange, we will deposit in a trust for a
period of two years the funds, in Mexican pesos, that would be required to
purchase all remaining Securities (assuming conversion of any remaining GDSs
into CPOs) at the same price paid in the Mexican Offer. Immediately after the
delisting of Gemex's Securities from the Mexican Stock Exchange, we intend to
cause Gemex to carry out a reverse stock split in order to eliminate for cash,
at the same Mexican peso price paid in the Mexican Offer, the Securities held by
any remaining security holders in accordance with Mexican law.

     Plans for Gemex.  We have made a preliminary review, and will continue to
review, on the basis of available information, various possible business
strategies for Gemex. As soon as practicable following the purchase of the
Securities pursuant to the Offers and the reverse stock split, PBG and BG LLC
intend to cause us to merge with and into Gemex, which will be the surviving
entity of such merger. In addition, in

                                        41


accordance with the Molina Agreement to Tender, upon the purchase of the
Securities pursuant to the Offers, Mr. Molina's employment agreement with Gemex
and all arrangements and understandings related to it will terminate and Mr.
Molina will release Gemex and its affiliates from any and all claims and
liabilities arising from his employment with Gemex and/or its subsidiaries.
Under the Molina Agreement to Tender, we acknowledge that Mr. Molina will be
entitled to receive approximately Ps.141.1 million in full satisfaction of his
rights under Gemex's executive pension plan and all other statutory and
severance benefits following the termination of his employment with Gemex and
agree to cause the pension plan to remit such amount to Mr. Molina in accordance
with the terms of the pension plan. We also intend to elect new directors to
Gemex's Board of Directors by a meeting of security holders to be held promptly
after the consummation of the Offers and to appoint certain new officers to
Gemex.

     Except as described above and subject to our ongoing review, we have no
current plans, proposals or negotiations which relate to or would result in any
other material change in Gemex's corporate structure or business.

                                        42


                          INFORMATION REGARDING GEMEX

GENERAL

     The information contained in this U.S. Offer regarding Gemex, including
Gemex's selected financial data presented below, is derived from or is based
upon reports and other documents on file with the SEC, including Gemex's Annual
Report and other publicly available data. Although we do not have any knowledge
that would indicate that any statements contained herein based on such reports
or documents are untrue, we do not take any responsibility for the accuracy or
completeness of the information contained in such reports and other documents or
for failure by Gemex to disclose events that may have occurred and may affect
the significance or accuracy of any such information but that are unknown to us.

     Gemex is subject to the informational requirements of the Exchange Act.
Accordingly, Gemex files reports and other information with the SEC. Gemex also
furnishes to its stockholders annual reports, which include financial statements
audited by its independent certified public accountants, and other reports which
the law requires Gemex to send to its stockholders. You may read and copy any
reports or other information that Gemex files with the SEC at the SEC's public
reference room at Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C.
20549. You may obtain information on the operation of the public reference room
by calling the SEC at 1-800-SEC-0330. These reports and other information may
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005. As a foreign private issuer, Gemex is not
required to furnish proxy statements to holders of Shares, CPOs or GDSs.

     According to Gemex's Annual Report, Gemex is the largest bottler outside
the United States of PepsiCo soft drink products based on sales volume. Gemex is
a Mexican holding company that, through its bottling and distribution
subsidiaries, produces, sells and distributes a variety of soft drink products
under the Pepsi-Cola, Pepsi Light, Pepsi Max, Pepsi Limon, Mirinda, 7UP, Diet
7UP, Kas, Mountain Dew, Power Punch and Manzanita Sol trademarks pursuant to
exclusive franchise and bottling arrangements with PepsiCo and certain
affiliates of PepsiCo. Gemex is the sole and exclusive anchor bottler for
PepsiCo in Mexico. Gemex also produces, sells and distributes a variety of
non-PepsiCo products such as soft drinks under the trademark Squirt and purified
and mineral water under the trademarks Electropura and Garci Crespo. Gemex's
principal office is located at Avenida Acoxpa No. 69, Col. San Lorenzo Huipulco,
Delegacion Tlalpan, 14370 Mexico, D.F., Mexico, telephone +52-55-5627-8600.

CAPITAL STOCK

     According to publicly available information concerning Gemex filed with the
SEC, including its Annual Report, as of June 17, 2002, there were 758,171,017
series B shares outstanding, 374,711,008 series D shares outstanding and
374,711,008 series L shares outstanding. Of these shares, 374,711,008 series B
shares, and all series D shares and series L shares were held in the form of
CPOs (each CPO consists of one share of each of the foregoing series). According
to the Depositary, of the 374,711,008 CPOs outstanding, as of September 10,
2002, 17,281,121 were held in the form of GDSs (each GDS consists of six CPOs).

     PepsiCo, owned, directly or indirectly, as of August 9, 2002, approximately
42.7% of the voting power of all classes of PBG's voting stock and, according to
Gemex's Annual Report, also owned, directly or indirectly, approximately 34.4%
of the total outstanding capital stock of Gemex, as of June 26, 2002. All of
PepsiCo's Securities are deposited in the Molina/PepsiCo Trust that grants Mr.
Molina the power to direct the voting of PepsiCo's Securities, absent certain
events, until December 31, 2002. However, during that time PepsiCo has the right
to approve certain decisions of Gemex's management.

     According to information in Gemex's Annual Report and an amendment to Mr.
Molina's Schedule 13D filed on September 18, 2002, Mr. Molina had beneficial
ownership over approximately 74.5% of the total capital stock of Gemex, as of
September 10, 2002, including (i) Shares and CPOs deposited by PepsiCo and its
subsidiaries in the Molina/PepsiCo Trust, and (ii) immediately exercisable

                                        43


options held by Mr. Molina to buy series T shares of Gemex which are convertible
into CPOs. Without giving effect to PepsiCo's Shares and CPOs deposited in the
PepsiCo/Molina Trust and to Mr. Molina's options to buy series T shares of
Gemex, Mr. Molina owned, directly or indirectly, approximately 40.0% of the
total outstanding capital stock of Gemex, as of September 10, 2002.

PRICE RANGE OF SECURITIES

     Price range of Shares.  The series B shares are listed and traded on the
Mexican Stock Exchange under the symbol "PEPSIGX." The last trade of Shares
reported by the Mexican Stock Exchange occurred on May 4, 2001 and the closing
price of the Shares at that time was Ps.5.00 per Share.

     The U.S. Offer price of Ps.5.91 per Share will be paid in U.S. dollars
based on the Applicable Exchange Rate. On October 4, 2002, the New York closing
exchange rate of Mexican pesos to U.S. dollars reported by Reuters and Bloomberg
on their FXBENCH page was Ps.10.1985 per US$1.00. Exchange rates are subject to
fluctuation. Holders are urged to obtain a current market quotation of the
exchange rate of Mexican pesos to U.S. dollars.

     Price range for CPOs.  The CPOs are listed and traded on the Mexican Stock
Exchange under the symbol "PEPSIGX". The following table sets forth, for the
periods indicated, the quarterly high and low per CPO closing prices of the CPOs
in Mexican pesos, as reported by Bloomberg. The following information reflects
nominal Mexican peso amounts as of the trade dates and has not been restated in
constant Mexican pesos.



                                                              HIGH     LOW
                                                              -----   -----
                                                              (PS.)   (PS.)
                                                                
Calendar Year 2002
  First Quarter.............................................  12.50    9.51
  Second Quarter............................................  17.00   12.70
  Third Quarter.............................................  17.10   15.50
  Fourth Quarter (through October 4, 2002)..................  17.00   17.00
Calendar Year 2001
  First Quarter.............................................   8.10    6.02
  Second Quarter............................................   9.70    7.40
  Third Quarter.............................................  11.00    8.12
  Fourth Quarter............................................  10.10    6.30
Calendar Year 2000
  First Quarter.............................................  10.18    7.16
  Second Quarter............................................   8.88    7.28
  Third Quarter.............................................   8.50    7.22
  Fourth Quarter............................................   8.40    6.20


     On May 7, 2002, the last full day of trading on the Mexican Stock Exchange
prior to the public announcement of the Offers, the reported closing sales price
of the CPOs by Bloomberg was Ps.14.90 per CPO. On October 4, 2002, the last full
day of trading prior to the date of this U.S. Offer, the reported closing sales
price of the CPO by Bloomberg was Ps.17.00 per CPO. Holders of CPOs are urged to
obtain a current market quotation for the CPOs.

     The U.S. Offer price of Ps.17.73 per CPO will be paid in U.S. dollars based
on the Applicable Exchange Rate. On October 4, 2002, the New York closing
exchange rate of Mexican pesos to U.S. dollars reported by Reuters and Bloomberg
on their FXBENCH page was Ps.10.1985 per US$1.00. Exchange rates are subject to
fluctuation. Holders are urged to obtain a current market quotation of the
exchange rate of Mexican pesos to U.S. dollars.

                                        44


     Price range of GDSs.  The GDSs are listed and traded on the NYSE under the
symbol "GEM." Each GDS represents six CPOs. The following table sets forth, for
the periods indicated, the quarterly high and low closing prices of the GDSs in
U.S. dollars as reported by Bloomberg.



                                                              HIGH     LOW
                                                              -----   -----
                                                               ($)     ($)
                                                                
Calendar Year 2002
  First Quarter.............................................   8.50    6.00
  Second Quarter............................................  10.50    8.41
  Third Quarter.............................................  10.38    9.73
  Fourth Quarter (through October 4, 2002)..................  10.15   10.08
Calendar Year 2001
  First Quarter.............................................   5.05    3.88
  Second Quarter............................................   6.04    4.63
  Third Quarter.............................................   7.18    4.98
  Fourth Quarter............................................   6.70    4.30
Calendar Year 2000
  First Quarter.............................................   6.44    4.69
  Second Quarter............................................   5.50    4.44
  Third Quarter.............................................   5.56    4.31
  Fourth Quarter............................................   5.50    3.75


     On May 7, 2002, the last full day of trading on the NYSE prior to the
public announcement of the Offers, the reported closing sales price of the GDSs
by Bloomberg was US$9.20, or Ps.87.30, per GDS using the exchange rate of
Ps.9.4890 per US$1.00 reported by Reuters and Bloomberg on their FXBENCH page as
the New York closing rate on May 7, 2002.

     On October 4, 2002, the last full day of trading prior to the date of this
U.S. Offer, the reported closing sales price of the GDSs by Bloomberg was
US$10.08, or Ps.102.80, per GDS using the exchange rate of Ps.10.1985 per
US$1.00 reported by Reuters and Bloomberg on their FXBENCH page as the New York
closing rate on October 4, 2002. Holders of GDSs are urged to obtain a current
market quotation for the GDSs.

DIVIDENDS

     The table below sets forth the nominal Mexican peso amount of dividends
declared in respect of each series of Shares for fiscal years 1999, 2000 and
2001, as reported in Gemex's Annual Reports, paid in respect of each of the
years indicated. Holders of CPOs on the date the payment of dividends is
announced are entitled to receive any dividends payable in respect of the Shares
underlying the CPOs. Holders of GDSs on the date the payment of dividends is
announced are entitled to receive any dividends payable in respect of the Shares
underlying the CPOs represented by the GDSs (each GDS representing six CPOs).
Cash dividends on the CPOs represented by the GDSs are paid to the Depositary in
Mexican pesos and are converted by the Depositary into U.S. dollars and are paid
to the holders of the GDSs, net of currency conversion expenses.



                                                       B SHARE    L SHARE    D SHARE
                                                       --------   --------   --------
                                                        (PS.)      (PS.)      (PS.)
                                                                    
1999.................................................        --         --         --
2000.................................................        --         --         --
2001.................................................  0.145075   0.145075   0.220376


     The dividend declared in 2001 was paid in Mexican pesos on June 28, 2002.

                                        45


     On April 30, 2002, the security holders of Gemex authorized the Board of
Directors of Gemex to announce at any time in its discretion a dividend payment
to security holders of an aggregate of Ps.297,594,000 of Gemex's retained
earnings as follows: (i) Ps.0.25743226 for each of the 374,711,008 shares of
Series D Preferred Shares outstanding (including the Series D preferred
dividend); (ii) Ps.0.17753949 for each of the 758,171,017 Shares outstanding;
and (iii) Ps.0.17753949 for each of the 374,711,008 shares of Series L Limited
Voting Shares outstanding. Holders of CPOs will receive Ps.0.61251124 for each
of their CPOs (which includes the dividends on the shares underlying the CPOs).
No payment date for such dividend had been set as of October 4, 2002. Under the
Molina Agreement to Tender, we may reduce the purchase prices we are offering in
this U.S. Offer by the amount of all dividends, including the dividends declared
but not yet paid as mentioned above, for which a payment date is announced or
published by Gemex on or prior to the expiration date and which is payable after
the date of this U.S. Offer and prior to the date of purchase of the Securities
pursuant to the Offers, if any. Alternatively, if we consummate the U.S. Offer
and pay for the Securities tendered without reducing the offering price, Mr.
Molina will pay us within five business days after the expiration date the
aggregate amount of all such dividends paid or announced to be paid to security
holders of Gemex, other than PBG or any of its subsidiaries, including us.

                                        46


SELECTED FINANCIAL DATA OF GEMEX

     The following table presents historical selected financial data of Gemex
for each of the last two fiscal years. This information is derived from Gemex's
Annual Report, except "Ratio of Earnings to Fixed Charges," which was provided
by Gemex. Gemex composed this summary from its audited financial statements,
which are included, together with the notes thereto, in such Annual Report filed
with the SEC on July 1, 2002. Gemex's financial statements and the table below
are prepared in accordance with Mexican GAAP, which differ in certain
significant respects from U.S. GAAP. Such differences are explained in detail in
note number 18 of the auditors' notes accompanying Gemex's audited financial
statements. A copy of the reconciliation note is attached to this U.S. Offer to
Purchase as Annex III.



                                                           2000               2001             2001
                                                      ---------------   ----------------   -------------
                                                      (THOUSANDS OF CONSTANT PESOS AS OF   (THOUSANDS OF
                                                            DECEMBER 31, 2001)(1)           DOLLARS)(2)
                                                                                  
INCOME STATEMENT DATA:
MEXICAN GAAP:
  Revenues:
     Net Sales......................................   Ps.9,572,760      Ps.11,036,212      $1,204,827
     Other..........................................         87,652             56,997           6,222
                                                       ------------      -------------      ----------
       Total Revenues...............................      9,660,412         11,093,209       1,211,049
                                                       ------------      -------------      ----------
  Costs and Expenses:
     Cost of Sales..................................      4,256,900          4,898,743         534,797
     Selling Expenses(3)............................      3,487,790          3,969,210         433,320
     General and Administrative Expenses............        566,103            651,262          71,098
     Depreciation and Amortization..................        308,890            403,090          44,005
                                                       ------------      -------------      ----------
       Total Costs and Expenses.....................      8,619,683          9,922,305       1,083,220
                                                       ------------      -------------      ----------
  Operating Income..................................      1,040,729          1,170,904         127,829
                                                       ------------      -------------      ----------
  Other Income (Expense) -- Net.....................        (31,513)          (197,396)        (21,550)
                                                       ------------      -------------      ----------
  Restructuring Charge..............................        568,980            136,866          14,942
                                                       ------------      -------------      ----------
  Integral Cost (Income) of Financing:
     Interest Income................................        (14,897)            (5,981)           (653)
     Interest Expense...............................        404,303            399,655          43,630
     Exchange Loss (Gain) -- Net....................         71,295           (217,594)        (23,755)
     Monetary Position Gain.........................       (426,608)          (158,625)        (17,317)
                                                       ------------      -------------      ----------
  Total Integral Cost (Income) of Financing --Net...         34,093             17,455           1,905
                                                       ------------      -------------      ----------
  Income Before Provisions and Extraordinary Gain...        406,143            819,187          89,432
     Income Taxes and Asset Tax.....................       (174,419)           228,846          24,985
     Employee Statutory Profit-Sharing..............         64,971             (4,847)           (529)
                                                       ------------      -------------      ----------
     Income Before Extraordinary Gain...............        515,591            595,188          64,976
     Extraordinary Gain(4)..........................             --                 --              --
                                                       ------------      -------------      ----------
  Consolidated Net Income...........................        515,591            595,188          64,976
                                                       ============      =============      ==========
  Earnings per Series B Share.......................           0.34               0.36            0.04
                                                       ============      =============      ==========
  Earnings per CPO..................................           1.19               1.23            0.13
                                                       ============      =============      ==========
  Earnings per GDS..................................   Ps.     7.12      Ps.      7.36      $     0.80
                                                       ============      =============      ==========
  Ratio of Earnings to Fixed Charges................           3.75               4.47            4.47
U.S. GAAP:
  Net Income........................................    Ps. 207,590      Ps.   310,352      $   33,881
                                                       ============      =============      ==========
  Earnings per Series B Share.......................           0.14               0.19            0.02
                                                       ============      =============      ==========
  Earnings per CPO..................................           0.48               0.64            0.07
                                                       ============      =============      ==========
  Earnings per GDS..................................   Ps.     2.87      Ps.      3.84      $     0.42
                                                       ============      =============      ==========


                                        47




                                                           2000               2001             2001
                                                      ---------------   ----------------   -------------
                                                      (THOUSANDS OF CONSTANT PESOS AS OF   (THOUSANDS OF
                                                            DECEMBER 31, 2001)(1)           DOLLARS)(2)
                                                                                  
BALANCE SHEET DATA (AT END OF PERIOD):
MEXICAN GAAP:
  Total Current Assets..............................   Ps.2,335,951       Ps.1,836,448      $  200,486
  Property, Plant and Equipment -- Net..............      7,262,477          7,125,890         777,936
  Total Assets......................................     11,288,080         10,579,045       1,154,918
  Total Current Liabilities (including short-term
     debt)..........................................      2,058,898          1,877,052         204,919
  Short-Term Debt(5)................................        916,557            376,910          41,147
  Long-Term Debt....................................      3,206,071          2,946,493          21,670
  Total Stockholders' Equity........................   Ps.4,966,892       Ps.4,666,362     Ps. 509,428
U.S. GAAP:
  Total Assets......................................     11,807,716         11,721,033       1,279,588
  Total Stockholders' Equity........................      5,153,027          5,268,159         575,127

OTHER DATA:
MEXICAN GAAP:
  EBITDA(6).........................................   Ps.1,514,894       Ps.1,695,830      $  185,134
  EBITDA/Net Interest Expense.......................           3.89x              4.31x          4.31x
  Operating Profit Margin(7)........................           10.8%              10.6%           10.6%
  Capital Expenditures(8)...........................   Ps.1,031,819       Ps.1,089,243      $  118,913
  Cash Dividends Declared...........................             --            246,931          26,958
  Per Series B Share(9).............................             --             0.1451            0.02
  Per CPO(7)........................................             --             0.5105          0.0557
  Per GDS(7)........................................             --             3.0630          0.3343
  Soft Drink Sales Volume(10).......................        311,455            347,113             N/A
  Five Gallon Jugs..................................         88,749             95,310             N/A
  Single Serve/Multiserve...........................         22,636             27,935             N/A
  Number of Employees (at end of period)............         26,691             25,349             N/A
U.S. GAAP:
  EBITDA(6).........................................   Ps.1,448,302       Ps.1,540,171      $  168,141

INFLATION AND EXCHANGE RATE DATA:
  Increase in NCPI..................................           8.96%              4.40%            N/A
  Peso/dollar exchange rate (nominal pesos) (rate at
     end of period).................................           9.65               9.16             N/A


                                        48


                        NOTES TO SELECTED FINANCIAL DATA

 (1) Except for per Share, CPO and GDS data.

 (2) Dollar translation is calculated solely for the convenience of the reader
     at the Interbank Rate of Ps.9.16 per dollar, as reported by Centro de
     Analisis y Proyecciones Economicas para Mexico, or CAPEM, on December 31,
     2001, except for capital expenditures, which is translated at the average
     rate for the entire year of 2001.

 (3) Selling expense includes amortization of bottles and cases amounting to
     Ps.165,275 and Ps.121,836 for the years 2000 and 2001, respectively.

 (4) Extraordinary gain consists solely of the benefit from the utilization of
     tax loss carryforwards and asset tax credit carryforwards.

 (5) Includes current portion of long-term debt.

 (6) EBITDA, for Mexican GAAP purposes, is defined as operating income plus
     depreciation and amortization (including amortization of bottles and
     cases), whereas for U.S. GAAP purposes, EBITDA is defined as operating
     income plus depreciation and amortization (including amortization of
     bottles and cases), plus the restructuring charge and adjustments from
     impairment of long-lived assets and severance payments. EBITDA should not
     be construed as an alternative to (a) consolidated net income as an
     indicator of our operating performance or (b) cash flows from operating
     activities, financing activities and investing activities as a measure of
     our liquidity. Our definition of EBITDA may not necessarily be comparable
     to other companies' definitions of EBITDA.

 (7) Operating income expressed as a percentage of total revenues.

 (8) These amounts are restated for inflation and exchange rate impact and are
     net of disposals.

 (9) Nominal pesos.

(10) In thousands of cases. Includes sales of soft drinks and mineral water
     products.

                                        49


    The following tables present historical selected financial and operational
data of Gemex for the first half of 2002. This information is derived from
Gemex's Report on Form 6-K filed with the SEC on July 26, 2002, except book
value information, which was provided by Gemex.



                                                               JUNE, 2002     DECEMBER, 2001
                                                              ------------   ----------------
                                                              IN MILLIONS OF CONSTANT MEXICAN
                                                               PESOS AS OF JUNE 30, 2002(1)
                                                                       
Current Assets..............................................    Ps. 1,586        Ps. 1,884
  Cash and cash equivalents.................................          282              102
Property, Plant & Equipment (net)...........................        7,218            7,000
Goodwill & Deferred Assets..................................        1,606            1,903
Other Assets................................................           63               63
Total Assets................................................       10,473           10,850
                                                                ---------        ---------
Short Term Debt.............................................           35              386
Other Liabilities...........................................        1,434            1,539
Current Liabilities.........................................        1,469            1,925
Long Term Debt..............................................        3,195            3,022
Other Liabilities...........................................        1,454            1,117
Long Term Liabilities.......................................        4,649            4,139
Total Liabilities...........................................        6,118            6,064
Stockholder's Equity........................................        4,355            4,786
Total Liabilities & Stockholder's Equity....................       10,473           10,850
                                                                ---------        ---------
Book Value per Series B Share...............................         2.89               --
Book Value per CPO..........................................         8.67               --
Book Value per GDS..........................................        52.00               --


- ---------------

(1) (9.965 Pesos = US$1.00)

                                        50




                               3 MONTHS              3 MONTHS              6 MONTHS              6 MONTHS
                                ENDED       % OF      ENDED       % OF      ENDED       % OF      ENDED       % OF
                               JUNE 30,    TOTAL     JUNE 30,    TOTAL     JUNE 30,    TOTAL     JUNE 30,    TOTAL
                                 2002     REVENUES     2001     REVENUES     2002     REVENUES     2001     REVENUES
                               --------   --------   --------   --------   --------   --------   --------   --------
                                           IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF JUNE 30, 2002(1)
                                                                                    
Total Volume (MM's 8oz
  Cases).....................    107.2                  98.5                 197.2                 180.6
Soft Drinks (MM's 8oz.
  Cases).....................     96.0                  90.5                 177.8                 165.6
Bottled Water (MM's 8oz.
  Cases).....................     11.2                   8.0                  19.4                  15.0
Water Jug (MM's 19 Lts.
  Jugs)......................     30.0                  26.2                  53.5                  48.3
Total Revenues...............  Ps.3,308    100.0%    Ps.3,006    100.0%    Ps.6,003    100.0%    Ps.5,498    100.0%
Cost of Sales................    1,339      40.5%      1,323      44.0%      2,473      41.2%      2,361      42.9%
Gross Profit.................    1,969      59.5%      1,683      56.0%      3,530      58.8%      3,137      57.1%
Operating Expenses...........    1,325      40.0%      1,192      39.7%      2,443      40.7%      2,226      40.5%
EBITDA(2)....................      644      19.5%        491      16.3%      1,087      18.1%        911      16.6%
Depreciation &
  Amortization...............      166       5.1%        145       4.8%        311       5.2%        296       5.4%
Operating Income.............      478      14.4%        346      11.5%        776      12.9%        615      11.2%
Other Expenses...............       46       1.4%         25       0.8%         84       1.4%         89       1.6%
Integral Cost of Financing...      396      12.0%        (85)     -2.8%        356       5.9%        (94)     -1.7%
  Net interest expense.......       66       2.0%        120       4.0%        138       2.3%        222       4.1%
  Foreign exchange loss
    (gain)...................      358      10.8%       (164)     -5.5%        301       5.0%       (236)     -4.3%
  Monetary position gain.....      (28)     -0.8%        (41)     -1.3%        (83)     -1.4%        (80)     -1.5%
Income before tax............       36       1.0%        406      13.5%        336       5.6%        620      11.3%
Deferred tax.................       52       1.5%         77       2.6%         92       1.5%         86       1.6%
Tax..........................       41       1.2%         82       2.7%         65       1.1%         98       1.8%
Net Income...................      (57)     -1.7%        247       8.2%        179       3.0%        436       7.9%
Ratio of earnings to fixed
  charges....................    10.59                  4.04                  7.90                  3.71


- ---------------

(1) (9.965 Pesos = US$1.00)

(2) EBITDA, for Mexican GAAP purposes, is defined as operating income plus
    depreciation and amortization (including amortization of bottles and cases).
    EBITDA should not be construed as an alternative to (a) consolidated net
    income as an indicator of our operating performance or (b) cash flows from
    operating activities, financing activities and investing activities as a
    measure of our liquidity. Our definition of EBITDA may not necessarily be
    comparable to other companies' definitions of EBITDA.

                                        51


             INFORMATION REGARDING PBG, BG LLC AND EMBOTELLADOR HM

     PBG is the world's largest manufacturer, seller and distributor of
Pepsi-Cola beverages. Pepsi-Cola beverages sold by PBG include Pepsi-Cola, Diet
Pepsi, Pepsi One, Pepsi Twist, Mountain Dew, Mountain Dew Code Red, Amp, Lipton
Brisk, Lipton's Iced Tea, Slice, Mug, Aquafina, Starbucks Frappucino,
Fruitworks, Sierra Mist, Dole and Sobe, and outside the United States, 7UP,
Pepsi Max, Mirinda and Kas. PBG has the exclusive right to manufacture, sell and
distribute Pepsi-Cola beverages in all or a portion of 41 states, the District
of Columbia, eight Canadian provinces, Spain, Greece, Russia and Turkey. In some
of its territories, PBG also has the right to manufacture, sell and distribute
soft drink products of other companies, including Dr. Pepper and All Sport in
the United States.

     PBG was incorporated in Delaware in January 1999 as a wholly-owned
subsidiary of PepsiCo to effect the separation of most of PepsiCo's
company-owned bottling businesses. PBG became a publicly-traded company on March
31, 1999. As of August 9, 2002, PepsiCo owned approximately 37.6% of the
outstanding PBG common stock and 100% of the outstanding PBG Class B common
stock, together representing approximately 42.7% of the voting power of all
classes of PBG's voting stock. According to Gemex's Annual Report, PepsiCo also
owned as of June 26, 2002, directly or indirectly, approximately 34.4% of the
total capital stock of Gemex. PBG's main office is located at 1 Pepsi Way,
Somers, New York 10589-2201, telephone (914) 767-6000.

     BG LLC was formed in Delaware in January, 1999. BG LLC is the principal
operating subsidiary of PBG. PBG owns approximately 93% of the equity interest
in BG LLC and PepsiCo owns approximately 7%. BG LLC's main office is located at
1 Pepsi Way, Somers, New York 10589-2201, telephone (914) 767-6000.

     We were organized under the laws of Spain in June 2002, for the purpose of
carrying out the transactions contemplated in this U.S. Offer and the Mexican
Offer. We are an indirect majority-owned subsidiary of BG LLC. PBG holds,
indirectly, the minority interest in us. Our main office is located at Avenida
de los Olmos, #2, 01013, Vitoria, Spain, telephone +34 945 16 41 00. As a result
of PepsiCo's ownership interests in PBG, BG LLC and Gemex, we may be deemed to
be an affiliate of Gemex and the Offers commenced by us for all of the Shares,
CPOs and GDSs will constitute, if consummated, a "going-private transaction"
within the meaning of Rule 13e-3 promulgated under the Exchange Act.

     Neither we nor PBG or BG LLC currently own any capital stock of Gemex.

            PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS

AGREEMENTS RELATED TO GEMEX'S SECURITIES

     Master Joint Venture Agreement and Trust.  According to information
provided in Gemex's Annual Report, in October 1995, Gemex entered into a master
joint venture agreement with PepsiCo, some of PepsiCo's subsidiaries and Mr.
Molina, Gemex's Chairman of the Board, Chief Executive Officer, and largest
security holder. Under the terms of the master joint venture agreement, Mr.
Molina and PepsiCo formed the Molina/PepsiCo Trust into which Mr. Molina
deposited a portion of his voting securities in Gemex and into which PepsiCo and
its subsidiaries deposited all of their voting securities in Gemex. The
Molina/PepsiCo Trust currently controls 63.4% of Gemex's Shares, giving the
trust the ability to elect a majority of Gemex's Board of Directors and
effective control over Gemex.

     During Phase I of the joint venture agreement, which will end no later than
December 31, 2002, absent certain events, the shares in the trust are voted by
Mr. Molina. Consequently, Mr. Molina has the power to elect a majority of the
directors of Gemex and Gemex's management to determine the outcome of
substantially all actions requiring stockholder approval (including the
declaration, amount and payment of dividends), except some actions that may
involve a conflict of interest and some actions that require, pursuant to the
joint venture agreement, the approval of PepsiCo. During Phase II of the joint
venture agreement, PepsiCo will have the right to direct the vote of all of the
Shares and CPOs in the Molina/ PepsiCo Trust described above, including the CPOs
owned by Mr. Molina to the extent not previously

                                        52


withdrawn by him. The voting power of the Shares and the CPOs in the
Molina/PepsiCo Trust currently is sufficient to give PepsiCo (during Phase II)
the ability to elect a majority of Gemex's directors and to determine the
outcome of substantially all actions requiring stockholder approval, except some
actions that may involve a conflict of interest and some actions that require,
pursuant to the joint venture agreement, the approval of Mr. Molina.

     Put options and pledges of Securities.  According to information provided
in Gemex's Annual Report, Mr. Molina and PepsiCo entered into a put option
agreement dated as of October 6, 1995 (the "1995 Put Agreement"). Under the 1995
Put Agreement, Mr. Molina has the right at any time and from time to time during
the seven-year period commencing on October 6, 1995 to sell to PepsiCo all or
part of 50,000,000 CPOs or 150,000,000 Shares (or a combination of such CPOs and
Shares) at a price of $2.00 per CPO and $0.67 per Share; provided that the total
purchase price for Shares and CPOs that are subject to the option that are sold
under the 1995 Put Agreement may not exceed $100 million.

     According to information provided in Gemex's Annual Report, in connection
with a credit agreement, dated as of October 11, 1995 (the "1995 Loan
Agreement"), by and among GTE de Mexico, S.A. de C.V., a Mexican company
controlled by Mr. Molina ("GTE"), and Internationale Nederlanden (U.S.) Capital
Corporation, as agent, or ING, among others, Mr. Molina pledged certain rights
under the Molina/PepsiCo Trust and the 1995 Loan Agreement to ING in order to
enable ING, after an event of default under the 1995 Loan Agreement, to put up
to 50,000,000 CPOs held in the Molina/PepsiCo Trust to PepsiCo at an exercise
price specified in the 1995 Put Agreement. According to information provided in
an amendment to Mr. Molina's Schedule 13D filed on September 18, 2002, in late
August, 2002, GTE repaid $50.0 million of the outstanding principal amount under
the 1995 Loan Agreement. In September 2002, Mr. Molina arranged for Banco Bilbao
Vizcaya Argentaria, S.A., formerly known as Banco Bilbao Vizcaya, S.A., ("BBVA")
to provide Subenmo, S.A. de C.V., a Mexican company controlled by Mr. Molina
("Subenmo") a loan in the amount of $50.0 million which was used to repay the
remaining balance of the 1995 Loan Agreement. This loan is evidenced by a demand
note which will mature on October 27, and is unconditionally guaranteed by
PepsiCo. Mr. Molina has indemnified PepsiCo against any loss it may incur as a
result of its guarantee and has assigned to PepsiCo his rights under the 1995
Put Agreement. In addition, an affiliate of Mr. Molina has pledged 36,112,679
CPOs of Gemex to secure Mr. Molina's indemnification obligations.

     Gemex's Annual Report further provides that in connection with the entering
into of a loan agreement, dated as of January 27, 1999 (the "1999 Loan
Agreement"), by and among Subenmo and BBVA, New York Branch, as agent, Mr.
Molina entered into a trust agreement, dated as of January 27, 1999 (the "1999
Trust Agreement"), by and among Mr. Molina, BBVA, The Chase Manhattan Bank and
Chase Manhattan Bank Delaware. Pursuant to the terms of the 1999 Loan Agreement
and the 1999 Trust Agreement, the Molina 1999 Pepsi-Gemex Shares Trust, a
Delaware statutory business trust for the benefit of Mr. Molina (the "1999
Trust"), was formed as a security device for the lenders, and Mr. Molina
contributed 100,000,000 CPOs to the 1999 Trust. PepsiCo and the 1999 Trust
entered into a put option agreement, dated as of January 27, 1999 (the "1999 Put
Agreement"), pursuant to which the 1999 Trust, after an event of default under
the 1999 Loan Agreement, may, at any time prior to October 6, 2002, put to
PepsiCo all of the CPOs held by the 1999 Trust at the time of exercise, at a
purchase price of US$1.00 per CPO. According to information provided in an
amendment to Mr. Molina's Schedule 13D filed on September 18, 2002, in
connection with an agreement dated August 27, 2002, entered into among the
parties to the 1999 Loan Agreement to extend the maturity date of the 1999 Loan
Agreement until November 27, 2002, PepsiCo and the 1999 Trust entered into an
agreement, dated as of August 15, 2002, amending the 1999 Put Agreement to
extend the final date of the exercise period to January 10, 2003.

     The 1999 Loan Agreement contains customary default provisions. Unless and
until an event of default has occurred and is continuing under the 1999 Loan
Agreement, Mr. Molina has the full right to direct the vote of the CPOs
delivered to the Molina/PepsiCo Trust and the 1999 Trust and has the full right
to direct the disposition of any cash dividends on the CPOs delivered to the
Molina/PepsiCo Trust or the

                                        53


1999 Trust. Mr. Molina may not transfer any of the CPOs held by the
Molina/PepsiCo Trust or the 1999 Trust.

     Mr. Molina may withdraw CPOs from the 1999 Trust upon prepayment of the
loans made pursuant to the 1999 Loan Agreement. In order to induce PepsiCo to
enter into the 1999 Put Agreement, Mr. Molina entered into a letter agreement,
dated as of January 27, 1999, with PepsiCo (the "1999 Letter Agreement"),
pursuant to which Mr. Molina agreed that for every two CPOs and for every six
Shares put to PepsiCo pursuant to the terms of the 1995 Put Agreement, Mr.
Molina shall transfer one additional CPO to PepsiCo, up to a certain number
determined in accordance with the 1999 Letter Agreement, subject to a maximum of
25,000,000 CPOs. Upon withdrawal of CPOs from the 1999 Trust, Mr. Molina and
PepsiCo agreed to enter into a pledge and security agreement pursuant to which
Mr. Molina will pledge to PepsiCo the CPOs that are subject to transfer under
the 1999 Letter Agreement; under certain circumstances, the CPOs pledged to
PepsiCo pursuant to the terms of the 1999 Letter Agreement may be deposited in
the Molina/PepsiCo Trust.

     If any put is made to PepsiCo of any securities (including CPOs and Shares)
under the 1995 Put Agreement or the 1999 Put Agreement, Phase II under the terms
of the Molina/PepsiCo Trust immediately commences.

     Registration Rights Agreement.  According to Gemex's Annual Report, in
connection with the master joint venture agreement, Gemex entered into a
registration rights agreement with Mr. Molina pursuant to which, during the
period beginning October 1995 and ending on the sixth anniversary of the
termination of Phase I, Gemex has agreed to file, at the request of Mr. Molina,
the appropriate registration statement(s) with the SEC and the CNBV, to register
CPOs. In addition, Mr. Molina has "piggyback" registration rights with respect
to any such registrations Gemex files with respect to the issuance and sale of
its shares during such time.

     Molina Agreement to Tender.  On October 4, 2002, we and BG LLC entered into
the Molina Agreement to Tender with Mr. Molina. According to information in
Gemex's Annual Report and an amendment to Mr. Molina's Schedule 13D filed on
September 18, 2002, Mr. Molina had beneficial ownership over approximately 74.5%
of the total capital stock of Gemex, as of September 10, 2002, including (i)
Shares and CPOs deposited by PepsiCo and its subsidiaries in the Molina/PepsiCo
Trust, and (ii) immediately exercisable options held by Mr. Molina to buy series
T shares of Gemex which are convertible into CPOs. Without giving effect to
PepsiCo's Shares and CPOs deposited in the Molina/ PepsiCo Trust and to Mr.
Molina's options to buy series T shares of Gemex, Mr. Molina owned, directly or
indirectly, approximately 40.0% of the total outstanding capital stock of Gemex,
as of September 10, 2002. Under the Molina Agreement to Tender, Mr. Molina has
agreed to tender, and to cause his affiliates identified in such agreement to
tender, in the Offers, and not withdraw, all of the outstanding Securities owned
by them, directly or indirectly, or which may be acquired by them on or before
the expiration date of the Offers, subject to their right to accept more
competitive offers received at any time prior to or during the time the Offers
remain outstanding. Mr. Molina and such affiliates will tender such Securities
at the same price offered to all security holders.

     Under the Molina Agreement to Tender, if on or prior to the initial
expiration date the conditions to either of the Offers set forth in the U.S.
Offer under the caption "The U.S. Offer -- Certain conditions to the U.S. Offer"
and in the Mexican Offer are satisfied, we may extend the expiration date of the
Offers for a period of not more than five business days after such initial
expiration date, solely to increase the number of Securities to be tendered in
the Offers. If, on the other hand, the conditions to either of the Offers are
not satisfied or waived by us on or prior to the initial expiration date, we are
required to extend the Offers until all such conditions have been satisfied or
waived, but not more than ten business days after the initial expiration date.
In the event that the conditions to either of the Offers are still not satisfied
or waived by us, we have the right, at our sole discretion, to terminate the
Offers after such ten business days extension has expired or to further extend
the Offers for an additional ten business days. Under the Molina Agreement to
Tender, an extension of the Offers for any other reason or under any other

                                        54


circumstances requires the consent of Mr. Molina, unless such extension is
required by applicable laws and regulations.

     We may amend the U.S. Offer at any time in our sole discretion to increase
the price we are offering to pay for the Securities. We may also reduce the
purchase prices we are offering by the amount of all dividends for which a
payment date is announced or published by Gemex on or prior to the expiration
date and which is payable after the date of this U.S. Offer and prior to the
date of purchase of securities pursuant to the Offers, if any. If such dividends
are paid or announced, but we nonetheless consummate the U.S. Offer and pay for
the Securities tendered without reducing the offering price, Mr. Molina will pay
us within five business days after the expiration date the aggregate amount of
all such dividends paid or announced to be paid to security holders of Gemex,
other than PBG or any of its subsidiaries, including us.

     Except as set forth in the preceding paragraph, under the Molina Agreement
to Tender we may not change the form of consideration or reduce the price we are
offering to pay or the number of Securities sought in this U.S. Offer or
otherwise amend the U.S. Offer in any manner materially adverse to Mr. Molina,
without the consent of Mr. Molina.

     Mr. Molina has agreed that effective on the date his Securities and the
Securities of his affiliates are purchased in the Offers, he will surrender to
Gemex all of his unvested options to acquire securities of Gemex and release us
and Gemex from any and all claims, liabilities, losses and demands with respect
to such unvested options. Further, Mr. Molina agreed to exercise all of his
vested options in accordance with their terms prior to the initial expiration
date of the Offers and to tender in the Offers the Securities issued to him as a
result of his exercise. Mr. Molina has also agreed not to authorize, instruct or
otherwise cause Gemex or the Board of Directors of Gemex to modify or consent to
the modification of any of the terms and conditions of the unvested options to
acquire Securities of Gemex held by employees of Gemex or its subsidiaries.

     Under the Molina Agreement to Tender, Mr. Molina has also agreed that, if
his and his affiliates' Securities are purchased by us in the Offers, for five
years he will not engage in the manufacture, marketing or wholesale sales or
distribution of beverages that are competitive with the products manufactured,
marketed, sold or distributed by Gemex in Mexico as of the date of the Molina
Agreement to Tender. In addition, Mr. Molina represented and warranted to us and
BG LLC, except as expressly disclosed in such agreement, that Gemex and its
affiliates do not have any liabilities or obligations of any nature to Mr.
Molina or any of his affiliates and that neither him nor any of his affiliates
has any claims against Gemex and its subsidiaries or representatives of any of
them. Mr. Molina further warranted and represented to us and BG LLC that all
agreements between Mr. Molina and his affiliates, on one hand, and Gemex and any
of its subsidiaries, on the other hand, may be terminated by Gemex without
payment of any penalty, liquidated damages or termination charge.

     Mr. Molina agreed to put in escrow an amount in U.S. dollars equivalent to
approximately Ps.141.1 million at the Applicable Exchange Rate from the proceeds
he is entitled to receive in the Offers for his Securities (not including
Securities deposited by PepsiCo and its subsidiaries in the Molina/PepsiCo
Trust), as security for any indemnity obligations resulting from a breach by Mr.
Molina of his representations and warranties referred to in the preceding
paragraph. Under an Escrow Agreement among us, BG LLC, Mr. Molina and The Bank
of New York, as escrow agent, dated October 4, 2002, the funds in escrow will be
released over a period of three years, at a rate of one-sixth of the total
amount originally put in escrow every six months, to the extent indemnification
claims have not been made against them. Mr. Molina's indemnification obligations
with respect to the representations and warranties described in the preceding
paragraph will not exceed Ps.188.2 million, including amounts paid out of the
escrow. However, there is no limitation on the remedies available to us in the
event of other breaches by Mr. Molina of the Molina Agreement to Tender.
Pursuant to the Molina Agreement to Tender, Mr. Molina and specified affiliates
of Mr. Molina released Gemex and its affiliates from all claims, liabilities and
obligations, other than specified obligations. Gemex also released Mr. Molina
and such

                                        55


affiliates from all claims, liabilities and obligations other than his
indemnification obligations and other specified obligations.

     In the Agreement to Tender, Mr. Molina agreed to use his reasonable efforts
to cause Gemex to call an ordinary shareholders meeting to replace and elect new
members to the Gemex Board for a date selected by us, including to recommend
that date to the Gemex Board.

     The Molina Agreement to Tender further provides that upon the purchase of
Mr. Molina's and his affiliates' Securities pursuant to the Offers, Mr. Molina's
employment agreement with Gemex and all arrangements and understandings related
to it will terminate, and upon such termination Mr. Molina agrees to release
Gemex and its affiliates from any and all claims and liabilities arising from
his employment with Gemex and/or its subsidiaries. Under the Molina Agreement to
Tender, we and BG LLC acknowledge that Mr. Molina will be entitled to receive
approximately Ps.141.1 million in full satisfaction of his rights under Gemex's
executive pension plan and all other statutory and severance benefits following
the termination of his employment with Gemex and agree to cause the pension plan
to remit such amount to Mr. Molina in accordance with the terms of the pension
plan.

     Each party to the Molina Agreement to Tender may terminate such agreement
upon written notice to the other parties if there is any law, rule, regulation
or governmental order prohibiting the consummation of the Offers or upon a
breach of the agreement by the other party.

     PepsiCo Agreement to Tender.  On October 4, 2002, we and BG LLC entered
into the PepsiCo Agreement to Tender with PepsiCo, which as of August 9, 2002
owned, directly or indirectly, approximately 42.7% of the voting power of all
classes of PBG's voting stock. According to Gemex's Annual Report, PepsiCo also
owned, directly or indirectly, approximately 34.4% of the total outstanding
capital stock of Gemex, as of June 26, 2002. All of PepsiCo's Securities are
deposited in the Molina/ PepsiCo Trust that grants Mr. Molina the power to
direct the voting of PepsiCo's Securities, absent certain events, until December
31, 2002. However, during that time PepsiCo has the right to approve certain
decisions of Gemex's management. Under the PepsiCo Agreement to Tender, PepsiCo
has agreed to tender, and to cause its nominee identified in the such agreement
to tender, and not withdraw, all of the outstanding Securities owned directly or
indirectly by PepsiCo, or which may be acquired by PepsiCo, on or before the
expiration date, in the Offers, subject to their right to accept more
competitive offers received at any time prior to or during the period the Offers
remain outstanding.

     The PepsiCo Agreement to Tender provides that, as it is strategically
important that we purchase Gemex, PepsiCo has agreed to pay us Ps.172.7 million
in order to facilitate such purchase and ensure a smooth ownership transition of
Gemex. This payment will be made before the completion of the Offers.

     Under the PepsiCo Agreement to Tender, if on or prior to the initial
expiration date the conditions to either of the Offers set forth in the U.S.
Offer under the caption "The U.S. Offer -- Certain conditions to the U.S. Offer"
and in the Mexican Offer are satisfied, we may extend the expiration date of the
Offers for a period of not more than five business days after such initial
expiration date, solely to increase the number of Securities to be tendered in
the Offers. If, on the other hand, the conditions to either of the Offers are
not satisfied or waived by us on or prior to the initial expiration date, we are
required to extend the Offers until all such conditions have been satisfied or
waived, but not more than ten business days after the initial expiration date.
In the event that the conditions to either of the Offers are still not satisfied
or waived by us, we have the right, at our sole discretion, to terminate the
Offers after such ten business days extension has expired or to further extend
the Offers for an additional ten business days. Under the PepsiCo Agreement to
Tender, an extension of the Offers for any other reason or under any other
circumstances requires the consent of PepsiCo, unless such extension is required
by applicable laws and regulations.

     We may amend the U.S. Offer at any time in our sole discretion to increase
the price we are offering to pay for the Securities. We may also reduce the
purchase prices we are offering by the amount of all dividends for which a
payment date is announced or published by Gemex on or prior to the expiration
date and which is payable after the date of this U.S. Offer and prior to the
date of purchase of Securities

                                        56


pursuant to the Offers, if any. Except as set forth in this paragraph, under the
PepsiCo Agreement to Tender we may not change the form of consideration or
reduce the price we are offering to pay or the number of Securities sought in
this U.S. Offer or otherwise amend the U.S. Offer in any manner materially
adverse to PepsiCo, without the consent of PepsiCo.

     Each party to the PepsiCo Agreement to Tender may terminate such agreement
upon written notice to the other parties if there is any law, rule, regulation
or governmental order prohibiting the consummation of the Offers or upon a
breach of the agreement by the other party. There is no limitation on our
remedies in the event of a breach by PepsiCo of the PepsiCo Agreement to Tender.

AGREEMENTS AND TRANSACTIONS BETWEEN PBG AND PEPSICO AND ITS AFFILIATES

     PBG conducts its business primarily under agreements with PepsiCo. These
agreements give PBG the exclusive right to market, distribute, and produce
beverage products of PepsiCo in authorized containers in specified territories.
Material agreements and transactions between PBG and PepsiCo and certain of its
affiliates during 2000 and 2001 are described below.

     Beverage agreements and purchases of concentrates and finished
products.  PBG purchases concentrates from PepsiCo and manufactures, packages,
distributes and sells carbonated and non-carbonated beverages under license
agreements with PepsiCo. These agreements give PBG the right to manufacture,
sell and distribute beverage products of PepsiCo in both bottles and cans and
fountain syrup in specified territories. The agreements also provide PepsiCo
with the ability to set prices of such concentrates, as well as the terms of
payment and other terms and conditions under which PBG purchases such
concentrates. In addition, PBG bottles water under the Aquafina trademark
pursuant to an agreement with PepsiCo, which provides for the payment of a
royalty fee to PepsiCo. In certain instances, PBG purchases finished beverage
products from PepsiCo.

     Total payments by PBG to PepsiCo for concentrates, royalties and finished
beverage products were approximately $1.5 billion in 2000 and $1.7 billion in
2001.

     PBG manufacturing services.  PBG provides manufacturing services to PepsiCo
in connection with the production of certain finished beverage products. Amounts
paid or payable by PepsiCo to PBG for these services were approximately $21.1
million in 2000 and $13.8 million in 2001.

     Transactions with joint ventures in which PepsiCo holds an equity
interest.  PBG purchases tea concentrate and finished beverage products from the
Pepsi/Lipton Tea Partnership, a joint venture of Pepsi-Cola North America, a
division of PepsiCo, and Lipton. The total amounts paid or payable to PepsiCo
for the benefit of such partnership were approximately $113.3 million in 2000
and $116.7 million in 2001. In addition, PBG provides certain manufacturing
services in connection with the hot-filled tea products of the partnership to
PepsiCo for the benefit of the partnership. Amounts paid or payable by PepsiCo
to PBG for these services were approximately $14.8 million in 2000 and $18.4
million in 2001.

     PBG purchases finished beverage products from the North American Coffee
Partnership, a joint venture of Pepsi-Cola North America and Starbucks. Amounts
paid or payable to the North American Coffee Partnership by PBG were
approximately $95.8 million in 2000 and $108.3 million in 2001.

     Purchase of snack food products from Frito-Lay, Inc.  PBG purchases snack
food products from Frito-Lay, Inc., a subsidiary of PepsiCo, for sale and
distribution through all of Russia except for Moscow. Amounts paid or payable by
PBG to Frito-Lay, Inc. were approximately $23.7 million in 2000 and $27.1
million in 2001.

     Shared services.  PepsiCo provides various services to PBG pursuant to a
shared services agreement, including procurement of raw materials, processing of
accounts payable and credit and collection, certain tax and treasury services
and information technology maintenance and systems development. Amounts paid or
payable to PepsiCo for shared services totaled approximately $138.8 million in
2000 and $178.9 million in 2001.

                                        57


     Pursuant to the shared services agreements, PBG provides certain employee
benefit and international tax and accounting services to PepsiCo. Payments to
PBG from PepsiCo for these services totaled approximately $638,000 in 2000 and
$598,000 in 2001.

     Rental payments.  Amounts paid or payable by PepsiCo to PBG for rental of
office space at certain PBG facilities were approximately $10.6 million in 2000
and $11.6 million in 2001.

     Insurance services.  Hillbrook Insurance Company, Inc., a subsidiary of
PepsiCo, provides insurance and risk management services to PBG pursuant to a
contractual arrangement. Costs associated with such services totaled
approximately $62.1 million in 2000 and $57.8 million in 2001. In addition, in
December 2000, PBG paid Hillbrook approximately $57.6 million for insurance and
risk management services in 2001.

     National fountain services.  PBG provides certain manufacturing, delivery
and equipment maintenance services to PepsiCo's national fountain customers. Net
amounts paid or payable by PepsiCo to PBG for these services were approximately
$188.5 million in 2000 and $184.6 million in 2001.

     Marketing and other support arrangements.  PepsiCo provides PBG with
various forms of marketing support. The level of this support is negotiated
annually and can be increased or decreased at the discretion of PepsiCo. This
marketing support is intended to cover a variety of programs and initiatives,
including direct marketplace support (including point-of-sale materials),
capital equipment funding and shared media and advertising support. Total direct
marketing support funding paid or payable to PBG by PepsiCo was approximated
$523.6 million for 2000 and $553.8 million for 2001.

     Transactions with bottlers in which PepsiCo holds an equity interest.  In
March 2002, PBG acquired the operations and exclusive right to manufacture, sell
and distribute Pepsi-Cola's international beverages in Turkey. Specifically, PBG
acquired the majority and minority ownership interests in Fruko Mesrubat Sanayii
A.S. and other related entities from Tamek Holding A.S., individual shareholders
and PepsiCo. Prior to the acquisition, PepsiCo had a 22% investment in the
bottling operations in Turkey. As part of this acquisition, PBG paid PepsiCo
$7.0 million for its equity interest in the acquired entity, and received $16.0
million from PepsiCo for the sale of the acquired entity's local brands to
PepsiCo.

     PBG and PepsiAmericas, Inc., a bottler in which PepsiCo owns an equity
interest, and PBG and Pepsi Bottling Ventures LLC, a bottler in which PepsiCo
owns an equity interest, bought from and sold to each other finished beverage
products. These transactions occurred in instances where the proximity of one
party's production facilities to the other party's markets or lack of
manufacturing capability, as well as other economic considerations, made it more
efficient or desirable for one bottler to buy finished product from another.
PBG's sales to those bottlers totaled approximately $18.5 million in 2000 and
$774,000 in 2001. Purchases from those bottlers were approximately $1.5 million
in 2000 and $40,000 in 2001.

AGREEMENTS AND TRANSACTIONS BETWEEN GEMEX AND PEPSICO AND ITS AFFILIATES

     Marketing.  According to information provided in Gemex's Annual Report,
Gemex enters into cooperative marketing arrangements with Pepsi-Cola Mexicana, a
subsidiary of PepsiCo, on a yearly basis. These arrangements provide for
advertising of Pepsi-Cola and other Pepsi products on national and local
television and radio stations, billboards, newspapers and other media, as well
as other marketing-related efforts. The planning and execution of media spending
in support of Pepsi products are controlled by Pepsi-Cola Mexicana. In addition,
the cooperative marketing arrangements between Gemex and Pepsi-Cola Mexicana
also include reimbursements by Pepsi-Cola Mexicana of expenditures on various
promotional tools of the trade (including vending machines and refrigerated
display cases), other equipment used in connection with the sale of Pepsi
products and various marketing expenditures related to new products or
packaging, although Pepsi-Cola Mexicana reimburses only up to 33% (as compared
to 50% generally under cooperative arrangements) of some of these expenditures.
Reimbursements by Pepsi-Cola Mexicana amounted to Ps.208.3 million, Ps.236.6
million and Ps.340.5 million for the years ended December 31, 1999, 2000 and
2001, respectively.

                                        58


     In recent years, the spending levels under cooperative marketing
arrangements have been negotiated annually. These arrangements provide for a
specified amount to be spent on marketing in a particular year expressed as a
percentage of the value of all concentrate purchased by Gemex in that year.
Pepsi-Cola Mexicana contributes half of the amount to be spent on cooperative
marketing and Gemex contributes the remaining half. Since 1997, the amount spent
on marketing under these arrangements has been increasing in nominal terms and
as a percentage of concentrate sales. In 1999, 2000 and 2001, the total amount
spent on marketing equaled 100% of the value of concentrate purchased in each of
these years. According to Gemex's Annual Report, Gemex expects that such amount
in 2002 will equal the 2001 levels. During the discussions among PepsiCo, PBG
and Gemex prior to the commencement of this U.S. Offer to Purchase, PepsiCo and
PBG discussed the franchisor/franchisee arrangements that would be put in place
with Gemex following the completion of the Offers. As a result of these
discussions, PepsiCo and PBG reached a general understanding that such
arrangements would remain substantially the same as those in place prior to the
completion of the Offers, except that PepsiCo agreed to increase its marketing
support to Gemex in an amount equal to Gemex's scheduled concentrate price
increase of 2% on September 30, 2002.

     Bottling arrangements.  According to information provided in Gemex's Annual
Report, under Gemex's bottling agreement with PepsiCo, Gemex must purchase all
of its concentrate and syrup requirements for each Pepsi product from PepsiCo or
its designees. In 2001, Gemex's syrup concentrate purchases from PepsiCo and its
subsidiaries totaled Ps.1,230.2 million; in the first half of 2002, its syrup
and concentrate purchases from PepsiCo and its subsidiaries totaled Ps.617.7
million. In addition, Gemex and PepsiCo pay and reimburse each other in
connection with some of Gemex's marketing programs.

     In September 2000, Gemex acquired Emvasa, a Pepsi bottler operating in
territories contiguous with Gemex's then existing marketing territories, through
a cash tender offer. Gemex paid approximately Ps.724.9 million, or $77.7 million
at the then existing exchange rate, for all of the existing shares of Emvasa and
assumed Emvasa's outstanding indebtedness. In connection with the acquisition of
Emvasa, Gemex paid a subsidiary of PepsiCo approximately $14.5 million, in the
form of 18,749,260 CPOs, for its equity interest in the principal bottling
subsidiary of Emvasa. In addition, during 2000, Gemex purchased PepsiCo's 50%
interest in Tenedora del Noreste, a company through which Gemex and PepsiCo held
a joint venture interest in the Northeast Bottling Group, for $22.1 million in
the form of 28,670,742 CPOs.

                                        59


     ANNEX I -- INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF
                    EMBOTELLADOR HM, BG LLC, PBG AND PEPSICO

     An asterisk denotes persons who are executive officers, but do not serve on
the Board of Directors of the respective entities referred to below.

1.  DIRECTORS AND EXECUTIVE OFFICERS OF PBG



                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Linda G. Alvarado.........................   49, was elected to PBG's Board in March 1999. She is
                                             the President and Chief Executive Officer of Alvarado
                                             Construction, Inc., a general contracting firm
                                             specializing in commercial, industrial, environmental
                                             and heavy engineering projects, a position she assumed
                                             in 1976. Ms. Alvarado is also a director of Pitney
                                             Bowes, Inc., Qwest Communications International, Inc.,
                                             Lennox International and 3M Company.
Barry H. Beracha..........................   60, was elected to PBG's Board in March 1999. He has
                                             been the Chief Executive Officer of Sara Lee Bakery
                                             Group since August 2001. Previously, Mr. Beracha was
                                             the Chairman of the Board and Chief Executive Office of
                                             The Earthgrains Company since 1993. Earthgrains was
                                             formerly part of Anheuser-Busch Companies, where Mr.
                                             Beracha served from 1967 to 1996. From 1979 to 1993, he
                                             held the position of Chairman of the Board of
                                             Anheuser-Busch Recycling Corporation. From 1976 to
                                             1995, Mr. Beracha is also a director of St. Louis
                                             University and McCormick & Co., Inc.
John T. Cahill............................   45, was elected to PBG's Board in January 1999. He has
                                             been our Chief Executive Officer since September 2001.
                                             Previously, Mr. Cahill served as our President and
                                             Chief Operating Officer. Mr. Cahill served as our
                                             Executive Vice President and Chief Financial Officer
                                             prior to becoming our President and Chief Operating
                                             Officer in August 2000. He was Executive Vice President
                                             and Chief Financial Officer of the Pepsi-Cola Company
                                             from April 1998 to November 1998. Prior to that, Mr.
                                             Cahill was Senior Vice President and Treasurer of
                                             PepsiCo, having been appointed to that position in
                                             April 1997. In 1996, he became Senior Vice President
                                             and Chief Financial Officer of Pepsi-Cola North
                                             America. Mr. Cahill joined PepsiCo in 1989 and held
                                             several other senior financial positions through 1996.
Thomas H. Kean............................   67, was elected to PBG's Board in March 1999. Mr. Kean
                                             has been the President of Drew University since 1990
                                             and was the Governor of the State of New Jersey from
                                             1982 to 1990. Mr. Kean is also a director of Amerada
                                             Hess Corporation, Aramark Corporation, Fiduciary Trust
                                             Company International and UnitedHealth Group, Inc. He
                                             is also Chairman of Carnegie Corporation of New York.


                                        60




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Susan D. Kronick..........................   51, was elected to PBG's Board in March 1999. Ms.
                                             Kronick has been Group President of Federated
                                             Department Stores since February 2001. Previously, Ms.
                                             Kronick was the Chairman and Chief Executive Officer of
                                             Burdines, a division of Federated Department Stores, a
                                             position she had held since June 1997. From 1993 to
                                             1997, Ms. Kronick served as President of Federated's
                                             Rich's/Lazarus/Goldsmith's division. She spent the
                                             previous 20 years at Bloomingdale's, where her last
                                             position was as Senior Executive Vice President and
                                             Director of Stores. Ms. Kronick is also a director of
                                             Union Planters National Bank in Miami.
Blythe J. McGarvie........................   45, was elected to the Board at PBG's Board meeting in
                                             March 2002. Ms. McGarvie is Executive Vice President
                                             and Chief Financial Officer of BIC Group, a position
                                             she has held since July 1999. From 1994 to 1999, Ms.
                                             McGarvie served as Senior Vice President and CFO of
                                             Hannaford Bros. Co. Ms. McGarvie is a Certified Public
                                             Accountant and has also held senior financial positions
                                             at Sara Lee Corporation, Kraft General Foods, Inc. and
                                             Pizza Hut Inc. Ms. McGarvie is also a director of
                                             Accenture Ltd.
Margaret D. Moore.........................   54, was elected to PBG's Board in January 2001. Ms.
                                             Moore is Senior Vice President, Human Resources of
                                             PepsiCo, a position she assumed at the end of 1999.
                                             From November 1998 to December 1999, she was Senior
                                             Vice President and Treasurer of PBG. Prior to joining
                                             PBG, Ms. Moore spent 25 years with PepsiCo in a number
                                             of senior financial and human resources positions.
Clay G. Small.............................   52, was elected to PBG's Board of Directors in May
                                             2002. Mr. Small is Senior Vice President and General
                                             Counsel of Frito-Lay North America, a division of
                                             PepsiCo. Mr. Small joined PepsiCo as an attorney in
                                             1981 and held several positions in the legal
                                             department. He served as Vice President and Division
                                             Counsel of Pizza Hut, Inc. from 1987 to 1997. Prior to
                                             his PepsiCo tenure, he was an associate with the law
                                             firm of White & Case in New York City.
Craig E. Weatherup........................   57, was elected to PBG's Board in January 1999. He has
                                             been Chairman of the Board of PBG since March 1999. Mr.
                                             Weatherup was also the Chief Executive Officer of PBG
                                             from March 1999 to September 2001. He served on the
                                             Board of Directors of PepsiCo from 1996 until March
                                             1999. Prior to becoming Chairman and Chief Executive
                                             Officer of PBG, he had served as Chairman and Chief
                                             Executive Officer of the Pepsi-Cola Company since July
                                             1996. He was appointed President of the Pepsi-Cola
                                             Company in 1988, President and Chief Executive Officer
                                             of Pepsi-Cola North America in 1991, and served as
                                             PepsiCo's President in 1996. Mr. Weatherup is also a
                                             director of Federated Department Stores, Inc. and
                                             Starbucks Corporation.


                                        61




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Eric J. Foss*.............................   44, is currently President, PBG North America.
                                             Previously, Mr. Foss was Executive Vice President and
                                             General Manager, PBG North America from August 2000 to
                                             September 2001. From October 1999 until August 2000, he
                                             served as PBG's Senior Vice President, U.S. Sales and
                                             Field Operations, and prior to that, he was Senior Vice
                                             President, Sales and Field Marketing, since March 1999.
                                             Mr. Foss joined Pepsi-Cola Company in 1982 and has held
                                             a variety of other field and headquarters-based sales,
                                             marketing and general management positions. From 1994
                                             to 1996, Mr. Foss was General Manager of Pepsi-Cola
                                             North America's Great West Business Unit. In 1996, Mr.
                                             Foss was named General Manager for the Central Europe
                                             Region for Pepsi-Cola International, a position he held
                                             until joining PBG in March 1999.
Yiannis Petrides*.........................   44, has been President, PBG Europe, since June 2000,
                                             with responsibilities for PBG's operations in Spain,
                                             Greece and Russia. Most recently, he served as Business
                                             Unit General Manager for PBG in Spain and Greece. Mr.
                                             Petrides joined PepsiCo in 1987 in the international
                                             beverage division. In 1993, he was named General
                                             Manager of Frito Lay's Greek operation with additional
                                             responsibility for the Balkan countries. Two years
                                             later, he was appointed Business Unit General Manager
                                             for Pepsi Beverages International's bottling operation
                                             in Spain.
Alfred H. Drewes*.........................   47, is Senior Vice President and Chief Financial
                                             Officer of PBG. Appointed to this position in June
                                             2001, Mr. Drewes previously served as Senior Vice
                                             President and Chief Financial Officer of Pepsi
                                             Beverages International ("PBI"). Mr. Drewes joined
                                             PepsiCo in 1982 as a financial analyst in New Jersey.
                                             During the next nine years, he rose through
                                             increasingly responsible finance positions within
                                             Pepsi-Cola North America in field operations and
                                             headquarters. In 1991, Mr. Drewes joined PBI as Vice
                                             President of Manufacturing Operations, with
                                             responsibility for the global concentrate supply
                                             organization.
Pamela C. McGuire*........................   55, has been Senior Vice President, General Counsel and
                                             Secretary of PBG since November 1998. Ms. McGuire
                                             joined PepsiCo in 1977 and served as Vice President and
                                             Division Counsel of Pepsi-Cola Company from 1989 to
                                             March 1998, when she was named Vice President and
                                             Associate General Counsel of the Pepsi-Cola Company.


     The address of each of the directors and executive officers of PBG is c/o
PBG, 1 Pepsi Way, Somers, New York 10589-2201, telephone (914) 767-6000.

                                        62


2.  MANAGING DIRECTORS AND EXECUTIVE OFFICERS OF BG LLC



                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
John T. Cahill............................   45, is a Managing Director and the Principal Executive
                                             Officer of BG LLC. Mr. Cahill is currently the Chief
                                             Executive Officer of PBG. Previously, Mr. Cahill served
                                             as PBG's President and Chief Operating Officer from
                                             August 2000 to September 2001. Mr. Cahill has been a
                                             member of PBG's Board of Directors since January 1999
                                             and served as PBG's Executive Vice President and Chief
                                             Financial Officer prior to becoming President and Chief
                                             Operating Officer in August 2000. He was Executive Vice
                                             President and Chief Financial Officer of the Pepsi-Cola
                                             Company from April 1998 until November 1998. Prior to
                                             that, Mr. Cahill was Senior Vice President and
                                             Treasurer of PepsiCo, having been appointed to that
                                             position in April 1997. In 1996, he became Senior Vice
                                             President and Chief Financial Officer of Pepsi-Cola
                                             North America. Mr. Cahill joined PepsiCo in 1989 where
                                             he held several other senior financial positions
                                             through 1996.
Alfred H. Drewes*.........................   47, is the Principal Financial Officer of BG LLC. He is
                                             also the Senior Vice President and Chief Financial
                                             Officer of PBG. Appointed to this position in June
                                             2001. Mr. Drewes previously served as Senior Vice
                                             President and Chief Financial Officer of PBI. Mr.
                                             Drewes joined PepsiCo in 1982 as a financial analyst in
                                             New Jersey. During the next nine years, he rose through
                                             increasingly responsible finance positions within
                                             Pepsi-Cola North America in field operations and
                                             headquarters. In 1991, Mr. Drewes joined PBI as Vice
                                             President of Manufacturing Operations, with
                                             responsibility for the global concentrate supply
                                             organization.
Andrea L. Forster*........................   43, is the Principal Accounting Officer of BG LLC. She
                                             is also Vice President and Controller of PBG. In
                                             September 2000, Ms. Forster was also named Corporate
                                             Compliance Officer for PBG. Following several years
                                             with Deloitte Haskins and Sells, Ms. Forster joined
                                             PepsiCo in 1987 as a Senior Analyst in External
                                             Reporting. She progressed through a number of positions
                                             in the accounting and reporting functions and, in 1998,
                                             was appointed Assistant Controller of the Pepsi-Cola
                                             Company. She was named Assistant Controller of PBG in
                                             1999.
Pamela C. McGuire.........................   55, is a Managing Director of BG LLC. She is also the
                                             Senior Vice President, General Counsel and Secretary of
                                             PBG. She was the Vice President and Division Counsel of
                                             the Pepsi-Cola Company from 1989 to March 1998, at
                                             which time she was named its Vice President and
                                             Associate General Counsel. Ms. McGuire joined PepsiCo
                                             in 1977 and held several other positions in its legal
                                             department through 1989.


                                        63




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Matthew M. McKenna........................   52, is a Managing Director of BG LLC. He is also the
                                             Senior Vice President of Finance of PepsiCo. Mr.
                                             McKenna began his career at PepsiCo as Vice President,
                                             Taxes, in 1993. In 1998, he became Senior Vice
                                             President, Taxes, and served as Senior Vice President
                                             and Treasurer from 1998 until 2000. Prior to joining
                                             PepsiCo, he was a partner with the law firm of
                                             Winthrop, Stimson, Putnam & Roberts in New York.


     The address of each of the directors and executive officers of BG LLC is
c/o PBG, 1 Pepsi Way, Somers, New York 10589-2201, telephone (914) 767-6000.

3.  DIRECTORS AND EXECUTIVE OFFICERS OF EMBOTELLADOR HM



                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Inigo Madariaga...........................   41, is a Managing Director of Embotellador HM. He is
                                             also the Legal & Tax Vice President of PBG Europe.
                                             Previously he was the Legal & Tax Vice President of PBG
                                             Spain. Mr. Madariaga joined PepsiCo in 1990 and held
                                             several other positions in the international groups of
                                             its Legal and Tax Departments.
Javier Ezpeleta Gurpide...................   37, was elected administrator of Embotellador HM at its
                                             incorporation in June 2002. Mr. Ezpeleta is also member
                                             of the Board of many other entities of PBG Spain. Mr.
                                             Ezpeleta joined PepsiCo in 1989, as member of the legal
                                             and tax Department. He is also a Member of the Bar of
                                             Lawyers of Vitoria, Spain.
Francisco Javier Relloso..................   38, was elected General Representative of Embotellador
                                             HM at its incorporation in June 2002. Mr. Relloso is
                                             also PBG's Tax Director for Europe. He joined PepsiCo
                                             in 1994 as Manager in the Corporate Tax and Legal
                                             Department in Spain, and he has held legal and tax
                                             responsibilities within the PepsiCo and PBG structure
                                             in various countries. He is also Managing Director and
                                             Board member of several companies in Spain. Mr. Relloso
                                             is a Member of the Bar of Lawyers of Alava, Spain.


     The address of each of the directors and executive officers of Embotellador
HM is c/o Embotellador HM, Avenida de los Olmos, #2, 01013, Vitoria, Spain,
telephone +34 945 16 41 00.

4.  DIRECTORS AND EXECUTIVE OFFICERS OF PEPSICO



                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
John F. Akers.............................   67, former Chairman of the Board and Chief Executive
                                             Officer of International Business Machines Corporation,
                                             has been a member of PepsiCo's Board since 1991. Mr.
                                             Akers joined IBM in 1960 and was Chairman and Chief
                                             Executive Officer from 1986 until 1993. He is also a
                                             director of Hallmark Cards, Inc., Lehman Brothers
                                             Holdings, Inc., The New York Times Company, and W. R.
                                             Grace & Co.


                                        64




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Robert E. Allen...........................   67, former Chairman of the Board and Chief Executive
                                             Officer of AT&T Corp., has been a member of PepsiCo's
                                             Board since 1990 and is Chairman of its Nominating
                                             Committee. He began his career at AT&T in 1957 when he
                                             joined Indiana Bell. He was elected President and Chief
                                             Operating Officer of AT&T in 1986, and was Chairman and
                                             Chief Executive Officer from 1988 until 1997. He is
                                             also a director of Bristol-Myers Squibb Company and
                                             WhisperWire.com., and a Trustee of The Mayo Foundation
                                             and Wabash College.
David R. Andrews*.........................   60, became PepsiCo's Senior Vice President, Government
                                             Affairs, General Counsel and Secretary in February
                                             2002. Before joining PepsiCo, Mr. Andrews was a partner
                                             in the law firm of McCutchen, Doyle, Brown & Enersen,
                                             LLP, a position he held from 2000 to 2002 and from 1981
                                             to 1997. From 1997 to 2000, he served as the legal
                                             adviser to the U.S. Department of State and former
                                             Secretary Madeleine Albright.
Peter A. Bridgman*........................   49, has been PepsiCo's Senior Vice President and
                                             Controller since August, 2000. Mr. Bridgman began his
                                             career with PepsiCo at Pepsi-Cola International in 1985
                                             and became Chief Financial Officer for Central Europe
                                             in 1990. He became Senior Vice President and Controller
                                             for Pepsi-Cola North America in 1992 and Senior Vice
                                             President and Controller for The Pepsi Bottling Group
                                             in 1999.
Roger A. Enrico...........................   57, has been a member of PepsiCo's Board since 1987.
                                             Mr. Enrico served as Chief Executive Officer and
                                             Chairman of the Board from 1996 to 2001. He was Vice
                                             Chairman from 1993 to 1996 and from May 2001 until his
                                             retirement from PepsiCo in March 2002. He joined
                                             PepsiCo in 1971, and became President and Chief
                                             Executive Officer of Pepsi-Cola USA in 1983, President
                                             and Chief Executive Officer of PepsiCo Worldwide
                                             Beverages in 1986, Chairman and Chief Executive Officer
                                             of Frito-Lay, Inc. in 1991 and Chairman and Chief
                                             Executive Officer of PepsiCo Worldwide Foods in 1992.
                                             In addition, he was Chairman and Chief Executive
                                             Officer, PepsiCo Worldwide Restaurants, from 1994 until
                                             the spin-off of PepsiCo's restaurant businesses in
                                             1997. Mr. Enrico is a member of the Board of Directors
                                             of the A. H. Belo Corporation, Electronic Data Systems
                                             Corporation, Target Corporation and The National
                                             Geographic Society.


                                        65




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Peter Foy.................................   62, is Chairman of Whitehead Mann Group, an executive
                                             search firm based in London, a position he has held
                                             since January 1, 2001. He was elected to PepsiCo's
                                             Board in 1997. He is the former Chairman of Baring
                                             Brothers International Ltd., the corporate finance
                                             section of ING Group's investment bank. Mr. Foy joined
                                             McKinsey & Co., Inc. in 1968, became a director and
                                             head of its U. K. Consumer Goods Practice in 1980, the
                                             managing director of McKinsey U.K. in 1983, and was
                                             Senior Partner from 1990 until 1996. In 1996, he became
                                             Chairman of Baring Brothers, a position he held until
                                             he retired in December 1998. Mr. Foy is also a director
                                             of Omnicom Group Inc., The Peninsular and Oriental
                                             Steam Navigation Company and Safeway PLC.
Ray L. Hunt...............................   59, Chairman and Chief Executive Officer of Hunt Oil
                                             Company and Chairman, Chief Executive Officer and
                                             President, Hunt Consolidated, Inc., was elected to
                                             PepsiCo's Board in 1996. Mr. Hunt began his association
                                             with Hunt Oil Company in 1958 and has held his current
                                             position since 1976. He is also a director of
                                             Halliburton Company, Security Capital Group, Electronic
                                             Data Systems Corporation, and a Class C Director of the
                                             Federal Reserve Bank of Dallas.
Arthur C. Martinez........................   62, former Chairman of the Board, President and Chief
                                             Executive Officer of Sears, Roebuck and Co., was
                                             elected to PepsiCo's Board in May 1999. Mr. Martinez
                                             was Chairman and Chief Executive Officer of the former
                                             Sears Merchandise Group from 1992 to 1995 and served as
                                             Chairman of the Board, President and Chief Executive
                                             Officer of Sears, Roebuck and Co. from 1995 until 2000.
                                             He served as Vice Chairman and a director of Saks Fifth
                                             Avenue from 1990 to 1992. Mr. Martinez is Chairman of
                                             The Federal Reserve Bank of Chicago. He is also a
                                             director of Liz Claiborne, Inc., International Flavors
                                             and Fragrances, Inc. and Martha Stewart Living
                                             Omnimedia, Inc.
Matthew M. McKenna*.......................   52, has been PepsiCo's Senior Vice President of Finance
                                             since August, 2001. Mr. McKenna began his career at
                                             PepsiCo as Vice President, Taxes in 1993. In 1998, he
                                             became Senior Vice President, Taxes and served as
                                             Senior Vice President and Treasurer from 1998 until
                                             2001. Prior to joining PepsiCo, he was a partner with
                                             the law firm Winthrop, Stimson, Putnam & Roberts in New
                                             York.


                                        66




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Robert S. Morrison........................   60, was elected to PepsiCo's Board and became Vice
                                             Chairman in August 2001. Since 1997, Mr. Morrison has
                                             served as Chairman of the Board, President and Chief
                                             Executive Officer of The Quaker Oats Company, which
                                             merged with PepsiCo in August 2001. From 1994 until
                                             1997, Mr. Morrison served as Chairman and Chief
                                             Executive Officer of Kraft Foods, Inc., a division of
                                             Philip Morris Companies, Inc. Mr. Morrison had joined
                                             Kraft in 1983 and while there also held the positions
                                             of President of Kraft Refrigerated Products Group,
                                             President of Kraft General Foods Canada and President
                                             of General Foods U.S.A. prior to becoming Chairman and
                                             Chief Executive Officer. He is also a director of Aon
                                             Corporation and The Tribune Company.
Indra K. Nooyi............................   46, was elected to PepsiCo's Board and became President
                                             and Chief Financial Officer in May 2001, after serving
                                             as Senior Vice President and Chief Financial Officer
                                             since February 2000. Ms. Nooyi also served as Senior
                                             Vice President, Strategic Planning and Senior Vice
                                             President, Corporate Strategy and Development from 1994
                                             until 2000. Prior to joining PepsiCo, Ms. Nooyi spent
                                             four years as Senior Vice President of Strategy,
                                             Planning and Strategic Marketing for Asea Brown Boveri,
                                             Inc. She was also Vice President and Director of
                                             Corporate Strategy and Planning at Motorola, Inc.
Lionel L. Nowell III*.....................   48, has been PepsiCo's Senior Vice President and
                                             Treasurer since August 2001. Mr. Nowell joined PepsiCo
                                             as Senior Vice President and Controller in 1999 and
                                             then became Senior Vice President and Chief Financial
                                             Officer of The Pepsi Bottling Group. Prior to joining
                                             PepsiCo, he was Senior Vice President, Strategy and
                                             Business Development for RJR Nabisco, Inc. From 1991 to
                                             1998, he served as Chief Financial Officer of Pillsbury
                                             North America, and its Pillsbury Foodservice and Haagen
                                             Dazs unit, serving as Vice President and Controller of
                                             the Pillsbury Company, Vice President of Food and
                                             International Retailing Audit and Director of Internal
                                             Audit.
Franklin D. Raines........................   53, was elected to PepsiCo's Board in May 1999, and is
                                             Chairman of its Audit Committee. Mr. Raines has been
                                             Chairman of the Board and Chief Executive Officer of
                                             Fannie Mae since January 1999. He was Director of the
                                             U.S. Office of Management and Budget from 1996 to 1998.
                                             From 1991 to 1996, he was Vice Chairman of Fannie Mae
                                             and in 1998 he became Chairman and CEO-Designate. Prior
                                             to joining Fannie Mae, Mr. Raines was a general partner
                                             at Lazard Freres &Co., an investment banking firm. Mr.
                                             Raines is also director of AOL Time Warner, Inc. and
                                             Pfizer, Inc.


                                        67




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Steven S. Reinemund.......................   54, has been PepsiCo's Chairman and Chief Executive
                                             Officer since May 2001. He was elected a director of
                                             PepsiCo in 1996 and before assuming his current
                                             position, served as President and Chief Operating
                                             Officer from September 1999 until May 2001. Mr.
                                             Reinemund began his career with PepsiCo in 1984 as a
                                             senior operating officer of Pizza Hut, Inc. He became
                                             President and Chief Executive Officer of Pizza Hut in
                                             1986, and President and Chief Executive Officer of
                                             Pizza Hut Worldwide in 1991. In 1992, Mr. Reinemund
                                             became President and Chief Executive Officer of
                                             Frito-Lay, Inc., and Chairman and Chief Executive
                                             Officer of the Frito-Lay Company in 1996.
Sharon Percy Rockefeller..................   57, was elected a director of PepsiCo in 1986. She is
                                             President and Chief Executive Officer of WETA public
                                             stations in Washington, D.C., a position she has held
                                             since 1989, and was a member of the Board of Directors
                                             of WETA from 1985 to 1989. She is a member of the Board
                                             of Directors of Public Broadcasting Service,
                                             Washington, D. C. and was a member of the Board of
                                             Directors of the Corporation for Public Broadcasting
                                             until 1992. Mrs. Rockefeller is also a director of
                                             Sotheby's Holdings, Inc.
Franklin A. Thomas........................   68, was elected to PepsiCo's Board in 1994. From 1967
                                             to 1977, he was President and Chief Executive Officer
                                             of the Bedford-Stuyvesant Restoration Corporation. From
                                             1977 to 1979, Mr. Thomas had a private law practice in
                                             New York City. Mr. Thomas was President of the Ford
                                             Foundation from 1979 to April 1996 and is currently a
                                             consultant to the TFF Study Group, a non-profit
                                             organization assisting development in southern Africa.
                                             He is also a director of ALCOA, Avaya Inc., Citicorp,
                                             Conoco, Inc., Cummins, Inc. and Lucent Technologies.
Cynthia M. Trudell........................   49, President of Sea-Ray Group since 2001, was elected
                                             to PepsiCo's Board in January 2000. From 1999 until
                                             2001, Ms. Trudell served as General Motors' Vice
                                             President and Chairman and President of Saturn
                                             Corporation, a wholly owned subsidiary of GM. Ms.
                                             Trudell began her career with the Ford Motor Co. as a
                                             chemical process engineer. In 1981, she joined GM and
                                             held various engineering and manufacturing supervisory
                                             positions. In 1995, she became plant manager at GM's
                                             Wilmington Assembly Center in Delaware. In 1996, she
                                             became President of IBC Vehicles in Luton, England, a
                                             joint venture between General Motors and Isuzu.


                                        68




                                                         PRESENT PRINCIPAL OCCUPATION OR
NAME                                               EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
- ----                                               -------------------------------------------
                                          
Solomon D. Trujillo.......................   50, Chairman, Chief Executive Officer and President of
                                             Graviton, Inc. since November 2000, was elected to
                                             PepsiCo's Board in January 2000. Previously, Mr.
                                             Trujillo was Chairman of US WEST from May 1999, and
                                             served as its President and Chief Executive Officer
                                             beginning in 1998. He served as President and Chief
                                             Executive Officer of US WEST Communications Group and
                                             Executive Vice President of US WEST from 1995 until
                                             1998 and President and Chief Executive Officer of US
                                             WEST Dex, Inc. from 1992 to 1995. Mr. Trujillo is also
                                             a director of Comstellar Technologies, Orange SA and
                                             Target Corporation.
Daniel Vasella............................   49, was elected to PepsiCo's Board in February 2002.
                                             Dr. Vasella became Chairman of the Board and Chief
                                             Executive Officer of Novartis AG in 1999, after serving
                                             as President since 1996. From 1992 to 1996, Dr. Vasella
                                             held the positions of Chief Executive Officer, Chief
                                             Operating Officer, Senior Vice President and Head of
                                             Worldwide Development and Head of Corporate Marketing
                                             at Sandoz Pharma Ltd. He also served at Sandoz
                                             Pharmaceuticals Corporation from 1988 to 1992. Dr.
                                             Vasella is a director of Credit Suisse Group and a
                                             member of the Supervisory Board of Siemens AG.


     The address of each of the directors and executive officers of PepsiCo is
c/o PepsiCo, Inc., 700 Anderson Hill Road, Purchase, New York 10577, telephone
(914) 253-2000.

                                        69


          ANNEX II -- PROCEDURES FOR TENDERING INTO THE MEXICAN OFFER

     In the Mexican Offer, we offer to purchase all outstanding Shares and CPOs,
including those held by U.S. residents. Shares and CPOs may be tendered in the
Mexican Offer only by book-entry transfer. If you hold Shares in certificated
form you may participate in the Mexican Offer by promptly contacting the Mexican
Receiving Agent or a broker, dealer, bank, trust company, financial institution
or other nominee ("custodian") who is a participant in the book-entry transfer
system of S.D. Indeval, S.A. de C.V., Institucion para el Deposito de Valores,
commonly known as "Indeval," a privately-owned central securities depositary
that acts as clearing house, depositary, custodian, settlement, transfer and
registration institution for the Mexican Stock Exchange, and arrange for the
holding by the Mexican Receiving Agent or by such custodian of the Shares on
your behalf in book-entry form. In order for a book-entry transfer to constitute
a valid tender of your Shares and CPOs in the Mexican Offer, the Mexican
Receiving Agent must receive a properly completed and duly executed Acceptance
Letter from your custodian accepting the Mexican Offer prior to the expiration
date of the Mexican Offer. The Acceptance Letter should be sent to its address
located at Paseo de la Reforma 398, Piso 1, Col. Juarez, C.P. 06600, Mexico,
D.F., Mexico, to the attention of Mr. Erubiel Manrique. The form Acceptance
Letter has been prepared by the Mexican Receiving Agent and will be available to
custodians as of October   , 2002 from the Mexican Receiving Agent at the
above-mentioned address. Neither we nor the Mexican Receiving Agent will bear
any responsibility for a failure to comply with the instructions contained in
the Acceptance Letter submitted by the custodians on behalf of their respective
clients. In addition to the delivery of a properly completed and duly executed
Acceptance Letter, the corresponding custodian must transfer the Shares and/or
CPOs into account number 0307 maintained by the Mexican Receiving Agent with
Indeval before the expiration date of the Mexican Offer.

     Any issue relating to the form, validity (including hour of tender and
transfer) and the acceptance for payment of the Shares and CPOs tendered
pursuant to the Mexican Offer will be determined by us, at our sole discretion,
and such determination shall be final and binding. We reserve the right to
reject any tender of Shares or CPOs that in our opinion does not meet the
requirements set forth in the Mexican Offer, as well as the right not to carry
out a payment for Shares or CPOs that in the opinion of our counsel may be
considered illegal. In addition, we reserve the right to waive any irregularity
or defect in the tendering of the Shares and CPOs. We will have no obligation,
nor will PBG, the Mexican Receiving Agent, the U.S. Receiving Agent, the U.S.
Dealer Manager or any other person related with the Mexican Offer will be under
any duty to give notification of any defect or irregularity in tenders or incur
any liability for failure to give any such notification.

     The purchase price for the Shares and CPOs accepted for payment pursuant to
the Mexican Offer will be paid, at the election of the holder, in Mexican pesos
or in U.S. dollars equivalent to the applicable Mexican peso price based on the
Applicable Exchange Rate. However, individuals tendering Shares and CPOs into
the Mexican Offer will be entitled to elect to receive the purchase prices in
U.S. dollars only if they have an account in or outside Mexico into which they
can receive payment in U.S. dollars and the information regarding such account
has been provided to the custodian for their Shares and CPOs. All tendering
holders will bear exchange rate risks and costs if they wish to convert the
currency received into another currency. Holders of Shares and CPOs who wish to
receive Mexican pesos for their Shares and CPOs instead of U.S. dollars, should
have their custodians tender their Shares and CPOs in the Mexican Offer and
indicate their election to receive the purchase price in Mexican pesos.

                                        70


                                   ANNEX III

[THE FOLLOWING NOTE IS COPIED FROM THE NOTES TO GEMEX'S AUDITED CONSOLIDATED
FINANCIAL STATEMENTS AT DECEMBER 31, 2000 AND 2001 AND FOR EACH OF THE THREE
YEARS IN THE PERIOD ENDED DECEMBER 31, 2001, AS SET FORTH IN THE ANNUAL REPORT.
A COMPLETE COPY OF SUCH AUDITED FINANCIAL STATEMENT IS ATTACHED TO GEMEX'S
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2001, WHICH WAS FILED WITH THE SEC
ON JULY 1, 2002]

18.  DIFFERENCES BETWEEN MEXICAN AND UNITED STATES OF AMERICA ACCOUNTING
     PRINCIPLES

     The Company's consolidated financial statements are prepared in accordance
with Mexican GAAP, which vary in certain respects from accounting principles
generally accepted in the United States of America ("U.S. GAAP").

     The Mexican GAAP consolidated financial statements include the effects of
inflation as provided for under Bulletin B-10, as amended, whereas financial
statements prepared under U.S. GAAP are presented on an historical cost basis.
The following reconciliations to U.S. GAAP do not include the reversal of the
adjustments required under Bulletin B-10, as amended, except as discussed in
Note 18 (c). The application of Bulletin B-10, as amended, represents a
comprehensive measure of the effects of price level changes in the Mexican
economy and, as such, is considered a more meaningful presentation than
historical cost-based financial reporting for both Mexican GAAP and U.S. GAAP
purposes.

     Mexican GAAP also requires the restatement of all financial statements to
constant pesos as of the date of the most recent balance sheet presented.

     All material differences, other than inflation accounting, between Mexican
GAAP and U.S. GAAP and the effects on net income and total shareholders' equity
are presented below with an explanation of the adjustments:



                                                                                            THOUSANDS OF
                                                                                            U.S. DOLLARS
                                                                                            (CONVENIENCE
                                                                                            TRANSLATION)
                                                          YEAR ENDED DECEMBER 31,            YEAR ENDED
                                                   --------------------------------------   DECEMBER 31,
RECONCILIATION OF NET INCOME OF MAJORITY INTEREST     1999         2000          2001           2001
- -------------------------------------------------  ----------   -----------   -----------   ------------
                                                                                
Net income of majority interest reported under
  Mexican GAAP.................................    Ps.822,845   Ps. 482,522   Ps. 595,188     $ 64,976
U.S. GAAP adjustments for:
  Deferred income taxes........................       (90,833)     (250,375)     (201,439)     (21,991)
  Deferred employee statutory profit-sharing...        30,033        11,690        18,116        1,978
  Restatement of foreign sourced fixed assets...      (45,780)      (53,067)     (103,998)     (11,354)
  Amortization of goodwill.....................        27,865        (9,434)       27,867        3,042
  Accrued vacation cost........................        21,480       (13,311)      (12,462)      (1,360)
  Accrued severance payments...................            --        16,236       (16,236)      (1,772)
  Reversal of capitalized exchange losses and
     monetary position gains and related
     depreciation..............................        58,216        23,329         3,315          362
  Minority interest applicable to above
     adjustments...............................       (76,899)           --            --           --
                                                   ----------   -----------   -----------     --------
Net income under U.S. GAAP.....................    Ps.746,927   Ps. 207,590   Ps. 310,351     $ 33,881
                                                   ==========   ===========   ===========     ========


                                        71




                                                                                       THOUSANDS OF
                                                                                       U.S. DOLLARS
                                                                                       (CONVENIENCE
                                                        DECEMBER 31,                   TRANSLATION)
                                         -------------------------------------------   DECEMBER 31,
RECONCILIATION OF SHAREHOLDERS' EQUITY       1999            2000           2001           2001
- --------------------------------------   -------------   ------------   ------------   ------------
                                                                           
Total shareholders' equity reported
  under Mexican GAAP...................  Ps. 5,805,972   Ps.4,966,892   Ps.4,666,362     $509,428
Less minority interest in consolidated
  subsidiary included in shareholders'
  equity under Mexican GAAP............        229,349             --             --           --
                                         -------------   ------------   ------------     --------
                                             5,576,623      4,966,892      4,666,362      509,428
U.S. GAAP adjustments for:
  Effect on retained earnings from:
     Deferred income taxes.............     (1,248,991)      (323,938)      (525,377)     (57,356)
     Deferred employee statutory
       profit-sharing..................       (167,021)       (30,569)       (12,453)      (1,360)
     Restatement of foreign sourced
       fixed assets....................        (88,856)      (141,923)      (245,921)     (26,847)
     Goodwill..........................       (345,539)      (354,973)      (327,106)     (35,710)
     Accrued vacation cost.............         (3,751)       (17,062)       (29,524)      (3,223)
     Accrued severance payments........             --         16,236             --           --
     Reversal of capitalized exchange
       losses and monetary position
       gains and related
       depreciation....................        (70,771)       (47,442)       (44,127)      (4,817)
  Effect on deficiency in restated
     shareholders' equity related to:
     Deferred income taxes.............        229,037         19,044         21,129        2,307
     Deferred employee statutory
       profit-sharing..................          6,080          5,441          6,034          659
     Restatement of foreign source
       fixed assets....................        915,605      1,061,321      1,759,142      192,046
  Minority interest applicable to above
     adjustments.......................        (96,476)            --             --           --
                                         -------------   ------------   ------------     --------
Shareholders' equity under U.S. GAAP...  Ps. 4,705,940   Ps.5,153,027   Ps.5,268,159     $575,127
                                         =============   ============   ============     ========


     The applicable effects of inflation on the above U.S. GAAP adjustments in
the reconciliation of net income that relate to monetary assets or liabilities
have been included in the corresponding adjustments.

                                        72


     A summary of changes in shareholders' equity giving effect to the U.S. GAAP
adjustments described above is as follows:



                                                                                              ACCUMULATED
                                                ADDITIONAL                                       OTHER           TOTAL
                                   CAPITAL       PAID-IN        RETAINED                     COMPREHENSIVE   SHAREHOLDERS'
                                    STOCK        CAPITAL        EARNINGS        RESERVES        INCOME          EQUITY
                                  ----------   ------------   -------------   ------------   -------------   -------------
                                                                                           
Balance at January 1, 1999......  Ps.861,981   Ps.4,414,863   Ps.(1,318,836)  Ps.1,034,273   Ps.  (999,449)  Ps.3,992,832
Repurchase and sale of capital
  stock -- net..................      (2,446)           393         (14,875)         5,756              --        (11,172)
Result from holding non-monetary
  assets........................          --             --              --             --        (517,565)      (517,565)
Net income......................          --             --         746,927             --              --        746,927
Effect on deficiency in restated
  shareholders' equity related
  to:
  Deferred income taxes.........          --             --              --             --           1,954          1,954
  Deferred employee statutory
    profit-sharing..............          --             --              --             --             559            559
  Restatement of foreign sourced
    fixed assets................          --             --              --             --         511,982        511,982
Effect of minority interest on
  U.S. GAAP adjustments to
  shareholders' equity..........          --             --              --             --         (19,577)       (19,577)
                                  ----------   ------------   -------------   ------------   -------------   ------------
Balance at December 31, 1999....     859,535      4,415,256        (586,784)     1,040,029      (1,022,096)     4,705,940
Repurchase and sale of common
  stock -- net..................         223          1,357              --          5,940              --          7,520
Result from holding non-monetary
  assets........................          --             --              --             --        (200,127)      (200,127)
Net income......................          --             --         207,590             --              --        207,590
Capital share increase..........       1,942         40,320              --             --              --         42,262
Acquisition of minority
  interest......................      16,519        341,763              --             --              --        358,282
Effect on deficiency in restated
  shareholders' equity related
  to:
  Deferred income taxes.........          --             --              --             --        (209,993)      (209,993)
  Deferred employee statutory
    profit-sharing..............          --             --              --             --            (639)          (639)
  Restatement of foreign sourced
    fixed assets................          --             --              --             --         145,716        145,716
Effect of minority interest on
  U.S. GAAP adjustments to
  shareholders' equity..........          --             --              --             --          96,476         96,476
                                  ----------   ------------   -------------   ------------   -------------   ------------
Balance at December 31, 2000....     878,219      4,798,696        (379,194)     1,045,969      (1,190,663)     5,153,027
Sale of capital stock -- net....         714             69              --         19,045              --         19,828
Result from holding non-monetary
  assets........................          --             --              --             --        (625,212)      (625,212)
Net income......................          --             --         310,351             --              --        310,351
Dividends declared..............          --       (246,931)             --             --              --       (246,931)
Shareholders' equity adjustment
  for labor obligations upon
  retirement....................          --             --              --             --         (43,403)       (43,403)
Effect on deficiency in restated
  shareholders' equity related
  to:
  Deferred income taxes.........          --             --              --             --           2,085          2,085
  Deferred employee statutory
    profit-sharing..............          --             --              --             --             593            593
  Restatement of foreign sourced
    fixed assets................                         --              --             --         697,821        697,821
                                  ----------   ------------   -------------   ------------   -------------   ------------
Balance at December 31, 2001....  Ps.878,933   Ps.4,551,834   Ps.   (68,843)  Ps.1,065,014   Ps.(1,158,779)  Ps.5,268,159
                                  ==========   ============   =============   ============   =============   ============


     A) DEFERRED INCOME TAXES AND EMPLOYEE STATUTORY PROFIT-SHARING -- As
mentioned in Note 1 to the consolidated financial statements, beginning January
1, 2000, the Company changed its method of accounting for income tax, tax on
assets and employee statutory profit-sharing under Mexican GAAP to conform with
the new Bulletin D-4.

                                        73


     D-4 requires the use of the asset and liability method of accounting for
deferred income tax and employee statutory profit-sharing. Under such method,
deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amount and their respective tax bases. This method also requires the
recognition of future tax benefits, such as those arising from tax loss
carryforwards, to the extent the realization of such benefits is highly likely.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in the tax rates is recognized in income in
the period that includes the enactment date. A deferred tax asset is also
recognized for the unused portion of tax credits, such as tax on assets, to the
extent the realization of such tax credit is highly likely. When, in accordance
with accounting principles generally accepted in Mexico, items related to
temporary differences are recorded directly to shareholders' equity, without
affecting net income, the deferred effects of such items are also recorded
directly to shareholders' equity. D-4 also requires that when there is a tax
regime that recognizes totally or partially the effects of inflation and this
causes the tax effect of the temporary differences to be restated, the change in
deferred tax arising from the restatement for inflation should be included in
the monetary result of the period.

     Through December 31, 1999, deferred income taxes under Mexican GAAP were
provided only for identifiable, nonrecurring timing differences, which were
expected to reverse over a definite period of time.

     For U.S. GAAP purposes, the Company applies Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109").

     Under SFAS No. 109, deferred income taxes reflect the net tax effect of (a)
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes and
(b) the benefits of operating loss and tax credit carryforwards. Under SFAS No.
109, the effect on deferred taxes of a change in tax rates is recognized as
income or expense, as the case may be, in the period that includes the enactment
date.

     During the year ended December 31, 2001, the valuation allowance for income
tax purposes associated with certain net operating losses and tax credits
carryforwards increased by $249,270, because the Company believes it is more
likely than not that such deferred tax asset will not be realized.

     The Company calculates a deferred employee statutory profit-sharing
liability for U.S. GAAP purposes based on temporary differences between the
financial reporting basis and the employee statutory profit-sharing basis of
assets and liabilities for those subsidiaries of the Company which have
employees. Through December 31, 1999, under Mexican GAAP, deferred employee
statutory profit-sharing was not recognized in the financial statements;
however, with the adoption of D-4, beginning January 1, 2000 the Company
recognizes deferred statutory profit-sharing as described above. During the year
ended December 31, 2001, the valuation allowance for deferred profit sharing
assets associated with certain tax losses carryforwards increased by $45,932
because the Company believes it is more likely than not that such deferred tax
asset will not be realized.

     Under U.S. GAAP the portion of deferred taxes and deferred employee
statutory profit-sharing attributable to the excess (deficiency) in restated
shareholders' equity is reflected as an adjustment to the excess (deficiency) in
restated shareholders' equity.

     Under Mexican GAAP, employee statutory profit-sharing expense or benefit is
included in provisions after operating income. Under U.S. GAAP, employee
statutory profit-sharing expense or benefit is treated as a component of
operating expenses.

     Under Mexican GAAP deferred tax assets and liabilities are of a long-term
nature, whereas under U.S. GAAP they are classified based on the nature of the
temporary difference.

                                        74


     Under U.S. GAAP, temporary differences and the resulting deferred tax
assets and liabilities at December 31, 2000 and 2001 are summarized as follows:



                                                                  DECEMBER 31,
                                                          -----------------------------
                                                              2000            2001
                                                          -------------   -------------
                                                                    
Current deferred tax liabilities -- Inventories.........  Ps.  (343,983)  Ps.  (344,344)
                                                          -------------   -------------
Current deferred tax assets:
  Accrued expenses and reserves.........................         52,078         103,931
  Allowance for doubtful accounts.......................         26,090          34,315
                                                          -------------   -------------
     Total current deferred tax assets..................         78,168         138,246
                                                          -------------   -------------
Non-current deferred tax liabilities:
  Property, plant and equipment.........................     (1,021,252)     (1,298,176)
  Investments in associated companies...................         (8,920)             --
  Other.................................................        (46,129)        (45,871)
                                                          -------------   -------------
     Total non-current deferred tax liabilities.........     (1,076,301)     (1,344,047)
                                                          -------------   -------------
Non-current deferred tax assets -- Net operating losses
  and tax credits.......................................        524,932         794,923
                                                          -------------   -------------
Valuation allowance.....................................       (272,309)       (521,579)
                                                          -------------   -------------
       Net deferred tax liability.......................  Ps.(1,089,493)  Ps.(1,276,801)
                                                          =============   =============


     The components of deferred employee statutory profit-sharing at December
31, 2000 and 2001 are summarized as follows:



                                                                   DECEMBER 31,
                                                             -------------------------
                                                                2000          2001
                                                             -----------   -----------
                                                                     
Current deferred tax liabilities -- Inventories............  Ps. (54,724)  Ps. (69,587)
                                                             -----------   -----------
Current deferred tax assets:
  Accrued expenses and reserves............................       15,311        19,416
  Allowance for doubtful accounts..........................        7,090         3,896
                                                             -----------   -----------
     Total current deferred tax assets.....................       22,401        23,312
                                                             -----------   -----------
Non-current deferred tax liabilities:
  Property, plant and equipment............................     (125,474)      (78,471)
  Other....................................................       10,924        16,421
                                                             -----------   -----------
                                                                (125,474)      (94,892)
                                                             -----------   -----------
Non-current deferred tax assets -- Net operating losses....           --        54,076
                                                             -----------   -----------
Valuation allowance........................................           --       (45,932)
                                                             -----------   -----------
Net deferred employee statutory profit-sharing liability...  Ps.(168,718)  Ps.(133,023)
                                                             ===========   ===========


     B) MINORITY INTEREST -- Under Mexican GAAP, the minority interest in
consolidated subsidiaries is presented as a separate component within the
shareholders' equity section in the consolidated balance sheet. For U.S. GAAP
purposes, the minority interest is not included in shareholders' equity.

     C) RESTATEMENT OF FOREIGN SOURCED FIXED ASSETS -- Effective January 1,
1997, the Company adopted the Fifth Amendment to Bulletin B-10 which allows
foreign sourced fixed assets to be restated for inflation using either of two
methodologies. Under the first methodology, foreign sourced fixed assets are
restated by applying Mexican NCPI factors to the original cost of the asset,
denominated in pesos. The alternate methodology, which is utilized by the
Company, restates foreign sourced fixed assets by applying the

                                        75


inflation factor of the country of origin to the original cost, denominated in
the foreign currency, and then translating such amounts into pesos at the
foreign exchange rate in effect at the most recent balance sheet date.

     The alternate methodology is not consistent with Regulation S-X, Rule
3-20(e) of the Securities and Exchange Commission. Accordingly, foreign sourced
fixed assets have been restated using the Mexican NCPI applied to original cost
(the balance of the related assets at December 31, 1997 or historical cost if
acquired subsequent to 1997), in pesos, for purposes of the U.S. GAAP
reconciliation.

     d) GOODWILL -- In 1992 and 1995, the Company recorded goodwill in
connection with the acquisition of three entities under common control in
accordance with Mexican GAAP. Under U.S. GAAP, such transactions would be
accounted for in a manner similar to that of a pooling of interests and,
accordingly, the unamortized excess of the amount paid over the net book value
of net assets acquired has been recognized as a reduction to equity and the
amortization expense for Mexican GAAP has been reversed for U.S. GAAP purposes.
Also, in December 2000, the Company recognized in the results of operations
under Mexican GAAP the negative goodwill that arose from the acquisition of a
minority interest of a consolidated associated company. For U.S. GAAP purposes,
the Company has reversed the negative goodwill recognized into income and has
reduced the recorded value of non-current assets.

     As mentioned in Note 1, beginning 2001, the Company began to include as
part of other income and expense in the statements of income prepared under
Mexican GAAP, the amortization of the excess of cost over fair value of net
assets acquired. The consolidated statements of income of prior years were
reclassified in order to conform them with the presentation utilized in 2001.
For U.S. GAAP purposes the amortization of goodwill should be reported as part
of operating income. Accordingly, Ps.78,014, Ps.(4,156) and Ps.90,111 would have
to be recorded as a decrease (increase) of operating income for the years ended
December 31, 1999, 2000 and 2001, respectively. This difference does not have an
effect in the net income or earnings per share reported during the years ended
December 31, 1999, 2000 and 2001.

     e) ACCRUED VACATION -- Under Mexican GAAP, the Company does not accrue
liabilities related to employees' rights to receive compensation for future
absences. Statement of Financial Accounting Standards No. 43, "Accounting for
Compensated Absences," requires that vacation benefits be accrued. For purposes
of the U.S. GAAP reconciliation, the Company has accrued such liability as of
December 31, of each year presented and recognized the related expense.

     f) ACCRUED SEVERANCE PAYMENTS -- Under Mexican GAAP, the Company has
accrued severance payments to be made to certain of its employees as a
consequence of the restructuring of operations initiated at the end of 2000 as
described in Note 1. For U.S. GAAP purposes the Company has reversed such cost
since at the date of the financial statements the Company had not communicated
to the employees the type and amount of benefits they will receive upon
termination.

     g) CAPITALIZATION OF INTEGRAL COST (INCOME) OF FINANCING -- Under Mexican
GAAP, total integral cost (income) of financing is subject to capitalization to
assets under construction, including foreign exchange gains and losses, interest
income and gains and losses from monetary position. In accordance with U.S.
GAAP, foreign exchange gains and losses, interest income and monetary position
gains and losses are not capitalizable. Consequently, such amounts capitalized
under Mexican GAAP have been reversed and treated as income or expense, as
appropriate, in the period incurred and current year depreciation has also been
adjusted.

     h) OTHER DIFFERENCES AND SUPPLEMENTAL U.S. GAAP DISCLOSURES --

          1.  Extraordinary Items -- Through December 31, 1999, under Mexican
     GAAP, the utilization of tax loss carryforwards and assets taxes paid in
     prior years was considered to be an extraordinary gain. Under U.S. GAAP,
     such amounts would be considered to be a component of income tax expense.
     Although this difference does not affect consolidated net income, it does
     affect the reported amount of income tax expense.

                                        76


          2.  Cash flows -- The Company presents its cash flow information,
     under Mexican GAAP, exclusive of the effects of inflation. Such information
     for the year ended December 31, 1999, 2000 and 2001 is presented below:



                                                    DECEMBER 31,
                                     -------------------------------------------
                                        1999           2000            2001
                                     -----------   -------------   -------------
                                                          
OPERATING ACTIVITIES:
Consolidated net income-Mexican
  GAAP.............................  Ps. 891,371   Ps.   515,591   Ps.   595,188
Effects of inflation...............     (476,096)       (259,059)       (218,646)
                                     -----------   -------------   -------------
Consolidated net income exclusive
  of inflation-Mexican GAAP........      415,275         256,532         376,542
Adjustments to reconcile net (loss)
  income to net cash provided by
  operating activities:
  Depreciation and amortization....      435,414         428,762         602,837
  Statutory seniority premiums.....       14,505          32,455          43,689
  Restructuring charge.............           --         524,000          83,505
  Equity in earnings of associated
     companies.....................       (1,120)             --              --
  Deferred taxes...................           --        (263,523)        (28,456)
  Unrealized foreign exchange
     (gain) loss on current and
     long-term debt................      (96,435)         56,211        (185,225)
  Realized foreign exchange (gain)
     loss on current and long-term
     debt..........................      (69,924)         12,079          (9,404)
Changes in operating assets and
  liabilities:
  Accounts receivable -- net.......     (320,735)        (95,041)         (9,451)
  Inventories......................       (1,956)       (252,171)        276,530
  Prepaid expenses.................       (4,177)         (5,374)         15,932
  Trade accounts payable...........      144,447          59,032            (949)
  Taxes payable, accrued expenses
     and other liabilities.........       18,722         (23,259)        163,344
                                     -----------   -------------   -------------
  NET CASH PROVIDED BY OPERATING
     ACTIVITIES....................      534,016         729,703       1,328,894
                                     -----------   -------------   -------------
INVESTING ACTIVITIES:
Acquisition of property, plant and
  equipment........................     (809,101)       (941,269)     (1,067,638)
Loan to associated company.........      (94,383)         (1,121)             --
Other assets.......................       61,385         (29,638)        110,356
Increase in goodwill...............           --              --        (111,650)
Acquisition of subsidiaries, net of
  cash received....................           --          77,716              --
Effect on cash of consolidating
  Tenedora.........................       44,910              --              --
                                     -----------   -------------   -------------
NET CASH USED IN INVESTING
  ACTIVITIES.......................     (797,189)       (894,312)     (1,068,932)
                                     -----------   -------------   -------------
FINANCING ACTIVITIES:
Payments of long-term debt.........      (74,992)        (40,760)       (282,154)
Proceeds from long-term debt.......       63,760         768,294         732,772
Payments of notes payable..........     (556,688)     (1,056,921)     (1,775,772)
Proceeds from notes payable........      653,373         479,469         918,166
Repurchase and sale of capital
  stock -- net.....................       (9,822)          6,861          19,427
Capital stock increase.............           --          40,481              --
                                     -----------   -------------   -------------


                                        77




                                                    DECEMBER 31,
                                     -------------------------------------------
                                        1999           2000            2001
                                     -----------   -------------   -------------
                                                          
NET CASH PROVIDED BY (USED IN)
  FINANCING ACTIVITIES.............       75,631         197,424        (387,561)
                                     -----------   -------------   -------------
Net increase (decrease) in cash and
  cash equivalents.................     (187,542)         32,815        (127,599)
Cash and cash equivalents at
  beginning of year................      317,651         169,239         217,217
Effect of inflation on cash........       39,130          24,721           9,558
                                     -----------   -------------   -------------
Cash and cash equivalents at end of
  year.............................  Ps. 169,239   Ps.   226,775   Ps.    99,176
                                     ===========   =============   =============


          Supplemental Cash Flow Information Required by U.S. GAAP -- Resources
     generated by operating activities in the statements of changes in financial
     position reflect cash payments of interest and income taxes as follows:



                                                 YEAR ENDED DECEMBER 31,
                                           ------------------------------------
                                              1999         2000         2001
                                           ----------   ----------   ----------
                                                            
Interest.................................  Ps.389,571   Ps.399,386   Ps.396,560
Income taxes.............................          --           --           --


          In accordance with Mexican GAAP, acquisition of subsidiaries is shown
     net of cash received as an investing activity and the corresponding debt
     incurred in the acquisition is shown as a financing activity. Also, when
     material, acquisition of minority interest in exchange of own shares is
     shown as an investing and financing activity, respectively. Under U.S.
     GAAP, because such transactions are non-cash, it is necessary only to
     disclose non-cash investing and financing activities. Supplemental
     disclosure of non-cash investing and financing activities is as follows:



                                                       YEAR ENDED DECEMBER 31,
                                                     ----------------------------
                                                      1999       2000       2001
                                                     ------   ----------   ------
                                                                  
Fair value of net assets acquired..................   Ps.--   Ps.708,014    Ps.--
Less: liabilities incurred.........................      --      791,907       --
                                                     ------   ----------   ------
Acquisition of subsidiaries, net of cash
  acquired.........................................   Ps.--   Ps.(83,893)   Ps.--
                                                     ======   ==========   ======
Shares issued in exchange of minority interest.....   Ps.--   Ps.358,282    Ps.--
                                                     ======   ==========   ======


          In accordance with Mexican GAAP, unrealized exchange losses on current
     and long-term debt are included as a financing activity in the statement of
     changes in financial position. Under U.S. GAAP, unrealized exchange losses
     on current and long-term debt would be reflected as non-cash expenses in
     operating activities and not as a financing activity.

          Also, under Mexican GAAP dividends declared and not paid are shown as
     resources used in and generated by financing activities, respectively.
     Under U.S. GAAP dividends declared but not paid are not included in the
     statement of cash flows.

          3.  Statement of Comprehensive Income -- Statement of Financial
     Accounting Standards No. 130, "Reporting Comprehensive Income," establishes
     standards for reporting and display of comprehensive income and its
     components. The Company's statements of comprehensive income for

                                        78


     the years ended December 31, 1999, 2000 and 2001, giving effect to the U.S.
     GAAP adjustments described above, are set forth below:



                                                                        THOUSANDS OF
                                                                        U.S. DOLLARS
                                                                        (CONVENIENCE
                                           DECEMBER 31,                 TRANSLATION)
                              ---------------------------------------   DECEMBER 31,
                                 1999          2000          2001           2001
                              -----------   -----------   -----------   ------------
                                                            
Net income under U.S. GAAP..  Ps. 746,927   Ps. 207,590   Ps. 310,352     $ 33,881
Other comprehensive (loss)
  income:
Result from holding
  nonmonetary assets as
  reported under Mexican
  GAAP......................     (517,565)     (200,127)     (625,212)     (68,255)
Adjustment from labor
  obligations upon
  retirement under Mexican
  GAAP......................           --            --       (43,403)      (4,738)
U.S. GAAP adjustments to
  result from holding
  nonmonetary assets........      494,918        31,560       700,501       76,474
                              -----------   -----------   -----------     --------
Total other comprehensive
  (loss) income.............      (22,647)     (168,567)       31,886        3,481
                              -----------   -----------   -----------     --------
Comprehensive income (loss)
  under U.S. GAAP...........  Ps. 724,280   Ps.  39,023   Ps. 342,238     $ 37,362
                              ===========   ===========   ===========     ========


          Accumulated other comprehensive loss at December 31, 1999, 2000 and
     2001, giving effect to the U.S. GAAP adjustments discussed above, consists
     of losses from holding nonmonetary assets of Ps.(1,022,096), Ps.(1,190,663)
     and Ps.(1,237,344), respectively.

          4.  Earnings Per Share in Accordance With U.S. GAAP -- Statement of
     Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
     128") requires the presentation of "basic" earnings per share, which is
     calculated by dividing income available to common shareholders by the
     weighted average number of shares outstanding during the period, and
     diluted earnings per share giving effect to all potentially dilutive common
     shares outstanding during the period.

          At December 31, 2000, the Company has not presented diluted earnings
     per share because there are no potentially dilutive securities outstanding.
     However, as discussed in Note 9, during 1999 the Company established an
     executive share purchase program. Under SFAS No. 128, shares granted under
     this program would possibly be considered dilutive when and if granted.

          Earnings per share for each of the years in the three-year period
     ended December 31, 2001 is presented below:



                                                                     THOUSANDS OF
                                                                     U.S. DOLLARS
                                                                     (CONVENIENCE
                                           DECEMBER 31,              TRANSLATION)
                                 ---------------------------------   DECEMBER 31,
                                   1999        2000        2001          2001
                                 ---------   ---------   ---------   ------------
                                                         
Basic earnings per share:
  B Shares.....................   Ps. 0.51     Ps.0.14     Ps.0.19      $0.020
  CPOs.........................       1.77        0.48        0.64       0.070
  GDS..........................      10.64        2.87        3.84       0.419
Weighted average shares
  outstanding (in 000's):
  Total shares.................  1,343,064   1,347,664   1,504,383
  CPOs.........................    322,381     336,219     375,318
  GDS..........................     53,730      56,037      62,553


                                        79


          5.  Restructuring Charge -- In accordance with U.S. GAAP the
     restructuring charges should be reported as part of operating income. This
     difference does not have an effect in the net income or earnings per share
     reported during the year ended December 31, 2001.

          6.  Impairment of long-lived assets and severance payments -- In
     accordance with U.S. GAAP the adjustments arising from the impairment of
     long-lived assets and severance payments arising from restructurings or
     reorganizations which are included in other expenses for Mexican GAAP
     purposes should be reported as part of the operating income. This
     difference does not have an effect in the net income or earnings per share
     reported during the year ended December 31, 2001.

          7.  Stock Option Program -- In accordance with the program (see Note
     9) the exercise price is determined to be the closing price on the last
     trading day prior to May 1 of each year for the options granted for the
     previous year, therefore, there was no compensation expense recognized in
     the financial statements, in accordance with Accounting Principles Board
     Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), for
     U.S. GAAP purposes.

          APB 25 requires that compensation expense for a stock option plan be
     measured using the intrinsic value method whereby compensation expense for
     a fixed plan is recognized in an amount equal to the excess of the market
     price of the underlying stock over the exercise price of the option at the
     grant date.

          Under Statement of Financial Accounting Standards No. 123 "Accounting
     for Stock-Based Compensation," ("SFAS No. 123"), the Company presents the
     following additional required disclosures to the financial statements:

             Pro Forma Effect of Stock Compensation Program -- SFAS No. 123
        requires the disclosure of the Company's net income and net income per
        share, as if the Company had accounted for its employee stock option
        plan under the fair value method. For purposes of these pro forma
        disclosures, the estimated fair value of the options is amortized over
        the options' vesting period. Had the Company's stock option program been
        accounted for under SFAS No. 123, the net income for U.S. GAAP at
        December 31, 1999, 2000 and 2001 would have been decreased by Ps.17,087,
        Ps.16,708 and Ps.10,080, respectively.

          Earnings per share for each of the years in the three-year period
     ended December 31, 2001 is presented below:



                                                                     THOUSANDS OF
                                                                     U.S. DOLLARS
                                                                     (CONVENIENCE
                                           DECEMBER 31,              TRANSLATION)
                                 ---------------------------------   DECEMBER 31,
                                   1999        2000        2001          2001
                                 ---------   ---------   ---------   ------------
                                                         
Basic earnings per share:
  B Shares.....................   Ps. 0.49     Ps.0.13     Ps.0.18      $0.020
  CPOs.........................       1.69        0.44        0.62       0.068
  GDS..........................      10.15        2.64        3.71       0.406
Weighted average shares
  outstanding (in 000's):
  Total shares.................  1,343,064   1,347,664   1,504,383
  CPOs.........................    322,381     336,219     375,318
  GDS..........................     53,730      56,037      62,553


          The fair value of the options granted used in order to calculate the
     pro forma amounts above, have been estimated at the date of grant using the
     Black-Scholes option-pricing model with the following assumptions: i)
     expected life of 7 years and expected volatility of 44.0%, ii) risk free
     rate of 5.32% and 6.36% for options granted during 1999 and 2000,
     respectively, and iii) no expected dividend yield. Based on these
     assumptions, the weighted average fair value of employee stock options
     granted during 1999 and 2000 was Ps.1.94 and Ps.1.55 per share (in nominal
     pesos), respectively, and the market price on the grant date was Ps.4.13
     and Ps.2.72, respectively

                                        80


          The Black-Scholes option valuation model was developed for use in
     estimating the fair value of traded options that have no vesting
     restrictions and are fully transferable. In addition, option valuation
     models require the input of highly subjective assumptions, including the
     expected stock price volatility. The Company's options have characteristics
     significantly different from those of traded options, and changes in the
     subjective input assumptions can materially affect the fair value estimate.

          8.  Recently Issued Accounting Standards -- In June 2001, the
     Financial Accounting Standards Board ("FASB") issued Statement of Financial
     Accounting Standards No. 141, "Business Combinations" ("SFAS 141") and
     Statement of Financial Accounting Standards No. 142, "Goodwill and Other
     Intangible Assets" ("SFAS 142"). SFAS 141 addresses financial accounting
     and reporting for business combinations and requires that the purchase
     method of accounting be used for all business combinations initiated or
     completed after June 30, 2001. Under SFAS 142, goodwill and certain other
     intangible assets with indefinite useful lives will no longer be
     systematically amortized, but instead will be tested for impairment at
     least annually and written-down with a charge to operations when the
     carrying amount exceeds the estimated fair value. SFAS 142 is effective for
     fiscal years beginning after December 15, 2001. The Company's management
     has not completed the initial impairment review required by SFAS 142.
     However, management believes that the adoption of SFAS 142 will reduce
     substantially the amortization expense of future years.

          In August 2001, the FASB also issued Statement of Financial Accounting
     Standards No. 143, "Accounting for Obligations Associated with the
     Retirement of Long-Lived Assets" ("SFAS 143"). SFAS 143 establishes
     accounting standards for the recognition and measurement of an asset
     retirement obligation and its associated asset retirement cost. It provides
     accounting guidance for legal obligations associated with the retirement of
     tangible long-lived assets. It requires the recognition of the fair value
     of a liability for an asset retirement obligation in the period in which it
     is incurred if a reasonable estimate of fair value can be made. SFAS 143 is
     effective for fiscal years beginning after June 15, 2002, with early
     adoption permitted. Management is currently evaluating the effects of
     adopting SFAS 143, but believes it will not have a material effect on the
     Company's results of operations and financial position. In addition, in
     October 2001, the FASB issued Statement of Financial Accounting Standards
     No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
     ("SFAS 144"). SFAS 144 establishes a single accounting model for the
     impairment or disposal of long-lived assets, including discontinued
     operations. SFAS 144 is effective for fiscal years beginning after December
     15, 2001. Management is currently evaluating the effects of adopting SFAS
     144, but believes it will not have a material effect on the Company's
     results of operations or financial position.

          In April 2002, the FASB issued SFAS No 145, "Recission of FASB
     Statements Nos. 4, 44 and 64, Amendment of FASB Statement No. 13, and
     Technical Corrections." As a result of this statement, The Company may no
     longer classify gains and losses from extinguishments of debt as
     extraordinary items unless the debt meets the criteria of APB 30. The
     provisions of this statement with regard to FAS 4 will be effective for
     fiscal years beginning after 2002. Gains and losses from extinguishments of
     debt that have been classified as extraordinary in previous years that do
     not meet the criteria of APB 30 will be reclassified.

          During 2000 and 2001, the Emerging Issues Task Force ("EITF")
     addressed various issues related to the income statement classification of
     certain promotional payments. In April 2001, the EITF reached a consensus
     on Issue 00-14: "Accounting for Certain Sales Incentives" which addresses
     the recognition, measurement, and income statement classification for sales
     incentives offered voluntarily by a vendor without charge to customers that
     can be used in, or that are exercisable by a customer as a result of, a
     single exchange transaction. Sales incentives have various forms including
     discounts, coupons, rebates, and free products or services. Under the
     consensus, it is required that if the sales incentive is a free product
     delivered at the time of sale, the cost of the product or service should be
     classifies as an expense. However, the reduction in or refund of the
     selling price of the products resulting from any cash sales incentives
     should be classified as a reduction of revenue. EITF 00-14 should be
     applied for annual or interim periods beginning after December 15, 2001. In

                                        81


     January, 2001 the EITF reached a consensus on Issue 00-22: "Accounting for
     "Points" and Certain Other Time-Based or Volume-Based Sales Incentive
     Offers for Free Products or Services to be Delivered in the Future." EITF
     00-22 requires that cash rebates or refund obligations should be recognized
     as a reduction of revenue based on a systematic and rational allocation of
     the cost of honoring them. EITF 00-22 is applied for quarters ended after
     February 15, 2001. In April 2001, the EITF reached a consensus on Issue
     00-25: "Vendor Income Statement Characterization of Consideration Paid to
     Reseller of the Vendor's Products." EITF 00-25 addresses the income
     statement classification, other than that addressed in EITF 00-14, from a
     vendor to a reseller or another party that purchases the vendor's products.
     EITF 00-25 requires that any consideration from a vendor to a reseller of
     its products is presumed to be a reduction of the selling price of the
     vendor's products and should be characterized as a reduction of revenue in
     the vendor's income statement. Such EITF, also establishes the conditions
     under which the consideration could be characterized as a cost incurred.
     EITF 00-25 should be applied for annual or interim periods beginning after
     December 15, 2001. In November of 2001, EITF codified Issues 00-14, 00-22
     and 00-25 as Issue 01-9: "Accounting for a Consideration Given by a Vendor
     to a Reseller of the Vendor's Products." Management is currently evaluating
     the effects of adopting EITF 00-14 and 00-25, but believes it will not have
     a material effect on the Company's results of operations or financial
     position. Adoption of EITF 00-22 did not have a material effect in the
     results of operation or financial position.

          The adoption of Statement of Accounting Standards No. 133, "Accounting
     for Derivative Instruments and Hedging Activities" ("SFAS No. 133"), as
     amended by SFAS 138 did not have a material effect on the results of
     operations, financial position and cash flows of the Company on January 1,
     2001, the date of adoption. SFAS No. 133 establishes accounting and
     reporting standards for derivative instruments, including certain
     derivative instruments embedded in other contracts (collectively referred
     to as derivatives) and for hedging activities. SFAS No. 133 requires an
     enterprise to recognize all derivatives as either assets or liabilities in
     the statement of financial position and measure these instruments at fair
     value.

                                        82


    GDS Letters of Transmittal, properly completed and duly signed, accompanied
by GDRs, or in the event of book-entry deliveries, Agent's Messages, evidencing
the tendered GDSs, and all other required documents related to the tender of
GDSs in the U.S. Offer should be delivered to the U.S. Receiving Agent. In order
to tender by Guaranteed Delivery, prior to the expiration of the U.S. Offer, the
U.S. Receiving Agent must receive from an eligible guarantor institution a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form we have provided, setting forth your name and address,
and the amount of GDSs you are tendering and stating that the tender is being
made by notice of guaranteed delivery. These documents may be sent by overnight
courier, registered or certified mail or (in the case of Notices of Guaranteed
Delivery only) facsimile transmission.

                The U.S. Receiving Agent for the U.S. Offer is:

                              THE BANK OF NEW YORK

                                    By Mail:

                              The Bank of New York
                          Tender & Exchange Department
                                 P.O. Box 11248
                             Church Street Station
                         New York, New York 10286-1248

                         By Hand or Overnight Courier:

                              The Bank of New York
                          Tender & Exchange Department
                               101 Barclay Street
                    Receive and Deliver Window Street Level
                            New York, New York 10286

                    For Notices of Guaranteed Delivery Only:

                            Facsimile Transmission:
                        (for Eligible Institutions only)

                                 (212) 815-6433

                       To Confirm Facsimile Transmission:

                                 (212) 815-6212

    DELIVERY OF A GDS LETTER OF TRANSMITTAL AND ANY CERTIFICATE OR AGENT'S
MESSAGE TO AN ADDRESS OTHER THAN THE ADDRESS LISTED ABOVE IS NOT A VALID
DELIVERY OF THE GDS LETTER OF TRANSMITTAL, CERTIFICATE OR AGENT'S MESSAGE.

    An Acceptance Letter from the Mexican custodian, evidencing the tendered
Shares or CPOs, and all other required documents related to the tender of Shares
and CPOs in the U.S. Offer should be delivered to the Mexican Receiving Agent.

               The Mexican Receiving Agent for the U.S. Offer is:

                   ACCIONES Y VALORES DE MEXICO, S.A. de C.V.

                          By Hand or Overnight Courier

                        Paseo de la Reforma 398, Piso 1
                            Col. Juarez, C.P. 06600
                                 Mexico, D.F.,
                                     Mexico
                        Attention: Mr. Erubiel Manrique

    DELIVERY OF ANY ACCEPTANCE LETTER TO AN ADDRESS OTHER THAN THE ADDRESS
LISTED ABOVE IS NOT A VALID DELIVERY OF THE CONFIRMATION.

    Questions or requests for assistance or additional copies of this U.S. Offer
to Purchase, the GDS Letter of Transmittal and any other documents may be
directed to the Information Agent at its address and telephone numbers set forth
below. A holder of Securities also may contact his or her broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
U.S. Offer.

                  The Information Agent for the U.S. Offer is:

                           [MORROW & CO., INC. LOGO]
                           445 Park Avenue, 5th Floor
                            New York, New York 10022
                                 (212) 754-8000

              U.S. SECURITY HOLDERS CALL TOLL FREE: (800) 607-0088
             SECURITY HOLDERS OUTSIDE THE U.S. PLEASE CALL COLLECT
                        EMAIL: TENDER.INFO@MORROWCO.COM

                 The U.S. Dealer Manager for the U.S. Offer is:

                          [SALOMON SMITH BARNEY LOGO]
                              388 Greenwich Street
                            New York, New York 10013

EX-99.A.2

                                                                  EXHIBIT (a)(2)

                           GDS LETTER OF TRANSMITTAL

                  TO TENDER FOR CASH GLOBAL DEPOSITARY SHARES
                                       OF

                           PEPSI-GEMEX, S.A. DE C.V.
           PURSUANT TO U.S. OFFER TO PURCHASE, DATED OCTOBER 7, 2002
                                       BY

                 PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.
                           AN INDIRECT SUBSIDIARY OF

                              BOTTLING GROUP, LLC
                     THE PRINCIPAL OPERATING SUBSIDIARY OF

                         THE PEPSI BOTTLING GROUP, INC.

  THE U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME (4:00 P.M., MEXICO CITY TIME), ON NOVEMBER 5, 2002 UNLESS THE U.S. OFFER IS
                                   EXTENDED.

     Please deliver this properly completed and duly executed GDS Letter of
                                Transmittal and
     accompanying documents to the U.S. Receiving Agent for the U.S. Offer:

                              THE BANK OF NEW YORK
                             (U.S. RECEIVING AGENT)



                     By Mail:                                  By Hand or Overnight Courier
                                                 
               The Bank of New York                                The Bank of New York
           Tender & Exchange Department                        Tender & Exchange Department
                  P.O. Box 11248                                    101 Barclay Street
               Church Street Station                      Receive and Deliver Window Street Level
           New York, New York 10286-1248                         New York, New York 10286


YOU SHOULD ONLY USE THIS GDS LETTER OF TRANSMITTAL TO TENDER YOUR GDSs IN THE
U.S. OFFER. IF YOU HOLD SHARES AND/OR CPOs THAT YOU WISH TO TENDER IN THE U.S.
OFFER OR THE MEXICAN OFFER YOU SHOULD PROMPTLY CONTACT THE NOMINEE HOLDING THE
SHARES AND/OR CPOs ON YOUR BEHALF.

DELIVERY OF THIS GDS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN THAT LISTED
ABOVE, OR TRANSMISSION BY FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY OF YOUR GDSs.

                    NOTE: SIGNATURES MUST BE PROVIDED BELOW.
              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
        BOX BELOW TO BE COMPLETED BY ALL TENDERING HOLDERS OF THE GDSS.



- --------------------------------------------------------------------------------------------------------
                                      DESCRIPTION OF GDSS TENDERED
- --------------------------------------------------------------------------------------------------------
                             1                                         2                     3
- --------------------------------------------------------------------------------------------------------
                                                                  CERTIFICATE          NUMBER OF GDSS
           NAME AND ADDRESS OF REGISTERED HOLDER                   NUMBER(S)*            TENDERED**
- --------------------------------------------------------------------------------------------------------
                                                                              

                                                              ------------------------------------------

                                                              ------------------------------------------

                                                              ------------------------------------------

                                                              ------------------------------------------
                                                                                    TOTAL:
- --------------------------------------------------------------------------------------------------------
 * Need not be completed by holders who tender by book-entry transfer.
** Unless otherwise indicated in column 3, a holder will be deemed to have tendered ALL of the GDSs
   represented by the certificate(s) listed in column 2. (See Instruction 4).
- --------------------------------------------------------------------------------------------------------



     By signing this GDS Letter of Transmittal, you hereby acknowledge that you
have received the U.S. Offer to Purchase, dated October 7, 2002 (the "U.S. Offer
to Purchase"), by PBG Grupo Embotellador Hispano-Mexicano, S.L. ("Embotellador
HM"), a Spanish indirect subsidiary of Bottling Group, LLC ("BG LLC"), the
principal operating subsidiary of The Pepsi Bottling Group, Inc., and this GDS
Letter of Transmittal. The U.S. Offer to Purchase together with this GDS Letter
of Transmittal constitutes Embotellador HM's U.S. Offer (the "U.S. Offer") to
purchase for cash (1) all outstanding Global Depositary Shares ("GDSs") of
Pepsi-Gemex, S.A. de C.V. ("Gemex"), a variable stock corporation organized
under the laws of Mexico, and (2) all outstanding Series B Common Shares of
Gemex (the "Shares") and all outstanding Ordinary Participation Certificates of
Gemex (the "CPOs," and collectively with the Shares and GDSs, the "Securities")
held by persons who are not Mexican residents. Each CPO represents one Series B
Common Share, one Series D Preferred Share and one Series L Limited Voting
Share. Each GDS represents six CPOs. Simultaneously with the U.S. Offer,
Embotellador HM is offering in Mexico (the "Mexican Offer", and collectively
with the U.S. Offer, the "Offers") to purchase all outstanding Shares and CPOs
of Gemex, including those held by U.S. residents, on substantially the same
terms as the U.S. Offer.

     In the U.S. Offer, we are offering to purchase all the outstanding GDSs at
a price of Ps.106.38 per GDS, all outstanding Shares held by persons who are not
Mexican residents at a price of Ps.5.91 per Share, and all outstanding CPOs held
by persons who are not Mexican residents at a price of Ps.17.73 per CPO, in
cash, in each case less any withholding taxes and without interest thereon. The
purchase price for the Securities accepted for payment pursuant to the U.S.
Offer will be paid in U.S. dollars equivalent to the applicable Mexican peso
price in the U.S. Offer, based on the U.S. dollar to Mexican peso exchange rate
calculated using the average of the exchange rates reported on each of the five
consecutive business days ending two business days prior to the expiration date
of the U.S. Offer by Reuters and Bloomberg on their FXBENCH page as the New York
closing rate for the exchange of Mexican pesos and U.S. dollars (the "Applicable
Exchange Rate"). We will announce the Applicable Exchange Rate by a press
release not later than 9:00 a.m., New York City time, on the next business day
after the Applicable Exchange Rate is determined. The Mexican Offer is open to
all holders of Shares and CPOs, including those held by U.S. residents. The
purchase price for the Shares and CPOs tendered in the Mexican Offer will be
paid, at such holder's election, in Mexican pesos or in U.S. dollars equivalent
to the Mexican peso price in the Mexican Offer based on the Applicable Exchange
Rate. However, individuals tendering Shares and CPOs into the Mexican Offer will
be entitled to elect to receive the purchase price in U.S. dollars only if they
have an account in or outside Mexico into which they can receive payment in U.S.
dollars and the information regarding such account has been provided to the
custodian for their Shares and CPOs.

     If you hold GDSs and would like to tender the underlying Shares and/or CPOs
instead of the GDSs you may do so. A holder of GDSs may contact The Bank of New
York, as depositary, to convert its GDSs into CPOs and tender such CPOs in the
Mexican Offer. However, you will have to pay a fee of $5.00 for each 100 GDSs
converted. If you choose to convert your GDSs into CPOs and tender into the
Mexican Offer and elect to receive payment in Mexican pesos you will bear the
risk of any fluctuation in the exchange rate after the consummation of the
Offers if you later wish to convert your Mexican pesos into U.S. dollars. If you
are not a Mexican resident, you can tender Shares and CPOs in either the U.S.
Offer or the Mexican Offer. Mexican residents can only tender Shares and CPOs
held by them in the Mexican Offer. The conditions to the Mexican Offer are
substantially similar to those in the U.S. Offer. In the event that the Mexican
Offer is amended to increase or decrease the price offered for the Securities,
we will make a corresponding amendment to increase or decrease the price offered
for the Securities in the U.S. Offer.

                                        2


     THIS GDS LETTER OF TRANSMITTAL IS TO BE USED ONLY FOR TENDERING GLOBAL
DEPOSITARY RECEIPTS ("GDRs"), OR GDSs HELD IN BOOK-ENTRY FORM, IN THE U.S.
OFFER. DO NOT USE THIS GDS LETTER OF TRANSMITTAL TO TENDER SHARES OR CPOs. IF
YOU HOLD SHARES AND/OR CPOs THAT YOU WISH TO TENDER IN THE U.S. OFFER, PLEASE
READ THE INFORMATION PROVIDED IN THE U.S. OFFER TO PURCHASE UNDER THE CAPTION
"THE U.S. OFFER -- PROCEDURE FOR TENDERING IN THE U.S. OFFER -- HOLDERS OF
SHARES AND CPOs" AND CONTACT THE NOMINEE FOR YOUR SHARES AND/OR CPOs AND
INSTRUCT YOUR NOMINEE TO TENDER ON YOUR BEHALF.

     If you tender your GDSs, and we accept the GDSs, this will constitute a
binding agreement between us, subject to the terms and conditions set forth in
the U.S. Offer to Purchase and this GDS Letter of Transmittal. In order to
validly tender your GDSs in the U.S. Offer, you must, on or prior to the
expiration of the U.S. Offer, do one of the following:

     - Tender the GDSs by sending a properly completed and duly executed GDS
       Letter of Transmittal (or facsimile thereof) and all other documents
       required by the GDS Letter of Transmittal, together with the GDRs
       evidencing the GDSs in proper form for transfer, to the U.S. Receiving
       Agent at one of its addresses set forth on the back cover of the U.S.
       Offer; or

     - If the GDSs are held in book-entry form, tender the GDSs by following the
       procedures for book-entry transfer described in the U.S. Offer to
       Purchase under the caption "The U.S. Offer -- Procedure for tendering in
       the U.S. Offer -- Holders of GDSs" and by sending a properly completed
       and duly executed GDS Letter of Transmittal, with any required signature
       guarantees, or an Agent's Message (as defined below) instead of a GDS
       Letter of Transmittal, to the U.S. Receiving Agent.

     The term "Agent's Message" means a message, transmitted by The Depository
Trust Company ("DTC") to, and received by, the U.S. Receiving Agent and forming
a part of a book-entry confirmation which states that DTC has received an
express acknowledgment from the participant tendering the GDSs which are the
subject of such book-entry confirmation that such participant has received and
agrees to be bound by the terms of the GDS Letter of Transmittal and that we may
enforce such agreement against such participant.

     If you are the registered holder of the GDSs and you wish to tender your
GDSs, but (1) the GDRs evidencing the GDSs are not immediately available, (2)
time will not permit the GDRs evidencing the GDSs or other required documents to
reach the U.S. Receiving Agent before the expiration of the U.S. Offer, or (3)
the procedure for book-entry transfer cannot be completed before the expiration
of the U.S. Offer, a tender of GDSs may be effected by following the guaranteed
delivery procedures described in the U.S. Offer to Purchase under the caption
"The U.S. Offer -- Procedure for tendering in the U.S. Offer -- Holders of
GDSs."

     Only registered holders of the GDSs are entitled to tender their GDSs in
the U.S. Offer. If you are a beneficial owner whose GDSs are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
you wish to tender your GDSs in the U.S. Offer, you should promptly contact the
person in whose name the GDSs are registered and instruct that person to tender
on your behalf. If you wish to tender in the U.S. Offer on your own behalf,
prior to completing and executing this GDS Letter of Transmittal and delivering
the certificates for your GDSs, you must either make appropriate arrangements to
register ownership of the GDSs in your name or obtain a properly completed stock
power from the person in whose name the GDSs are registered.

     In order to properly complete this GDS Letter of Transmittal, you must: (1)
complete the box entitled "Description of GDSs Tendered," (2) if appropriate,
check the boxes entitled "Special Payment/Issuance Instructions" and/or "Special
Delivery Instructions," (3) sign this GDS Letter of Transmittal by completing
the box entitled "Sign Here" and (4) complete and sign the box entitled
"Substitute Form W-9." By completing the box entitled "Description of GDSs
Tendered" and signing below, you will have tendered your GDSs for cash on the
terms and conditions described in the U.S. Offer to Purchase and this GDS Letter
of Transmittal. You should read the detailed instructions at the end of this
document before completing this GDS Letter of Transmittal.

     All references to "U.S. dollars," "$" and "US$" are to the United States
dollar and all references to "Mexican pesos," "pesos," and "Ps." shall mean the
currency which is presently legal tender in Mexico.

                                        3


                    BOXES BELOW TO BE CHECKED AS APPLICABLE

[ ] CHECK HERE IF GDRs REPRESENTING YOUR GDSs ARE BEING TENDERED WITH THIS GDS
    LETTER OF TRANSMITTAL.

[ ] CHECK HERE IF THE GDRs REPRESENTING YOUR GDSs HAVE BEEN LOST, DESTROYED OR
    STOLEN AND YOU REQUIRE ASSISTANCE IN OBTAINING NEW RECEIPTS.

    Certificate Number(s)
   -----------------------------------------------------------------------------

    Number of GDSs Represented
   -----------------------------------------------------------------------------

    You must contact the U.S. Receiving Agent to obtain instructions for
    replacing lost, destroyed or stolen GDRs representing GDSs. (See Instruction
    12)

                     SPECIAL PAYMENT/ISSUANCE INSTRUCTIONS
                              (SEE INSTRUCTION 6)

TO BE COMPLETED ONLY IF CHECKS CONSTITUTING CASH PAYMENTS SHOULD BE ISSUED TO
SOMEONE OTHER THAN THE UNDERSIGNED OR GDSs NOT PURCHASED SHOULD BE ISSUED IN THE
NAME OF SOMEONE OTHER THAN THE UNDERSIGNED:

(PLEASE PRINT)

[ ] Check to:
[ ] GDSs to:

Name:
- ---------------------------------------------

Address:
- -------------------------------------------

          -----------------------------------------------------

          -----------------------------------------------------

Telephone:
- -----------------------------------------

Tax Identification or Social Security Number. (See Instruction 9).

- ------------------------------------------------------

                                SPECIAL DELIVERY
                                  INSTRUCTIONS
                              (SEE INSTRUCTION 6)

TO BE COMPLETED ONLY IF CHECKS CONSTITUTING CASH PAYMENTS OR CERTIFICATES
EVIDENCING GDSs NOT PURCHASED SHOULD BE MAILED TO SOMEONE OTHER THAN THE
UNDERSIGNED, OR TO THE UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE
UNDER "DESCRIPTION OF GDSs TENDERED":

(PLEASE PRINT)

[ ] Check to:
[ ] GDSs to:

Name:
- ---------------------------------------------

Address:
- -------------------------------------------

          -----------------------------------------------------

          -----------------------------------------------------

Telephone:
- -----------------------------------------

Tax Identification or Social Security Number. (See Instruction 9).

- ------------------------------------------------------

                                        4


[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
    THE TENDERED GDSs ARE BEING DELIVERED UNDER A NOTICE OF GUARANTEED DELIVERY
    PREVIOUSLY SENT TO THE U.S. RECEIVING AGENT AND COMPLETE THE FOLLOWING:

    Name(s) of registered holder(s)
   -----------------------------------------------------------------------------

    Date of execution of Notice of Guaranteed Delivery
   ---------------------------------------------------------------

    Name of institution which guaranteed delivery
   ---------------------------------------------------------------------

    BOXES BELOW TO BE CHECKED BY ELIGIBLE GUARANTOR INSTITUTIONS ONLY

[ ] CHECK HERE IF TENDERED GDSs ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER INTO
    THE U.S. RECEIVING AGENT'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND
    COMPLETE THE FOLLOWING:

    Name of Tendering Institution
   -----------------------------------------------------------------------------

    Account (DTC Participant) Number

 -------------------------------------------------------------------------------

    Transaction Code Number
   -----------------------------------------------------------------------------

[ ] CHECK HERE IF TENDERED GDSs NOT ACCEPTED FOR PAYMENT ARE TO BE RETURNED BY
    CREDITING THE PARTICIPANT ACCOUNT NUMBER INDICATED ABOVE

                                        5


Ladies and Gentlemen:

     Upon the terms and subject to the conditions of the U.S. Offer, as
described in the U.S. Offer to Purchase and this GDS Letter of Transmittal, I
hereby tender to Embotellador HM the number of GDSs described above in the box
entitled "Description of GDSs Tendered" for Ps.106.38 in cash, less any
withholding taxes and without interest thereon, for each GDS tendered, payable
in U.S. dollars equivalent to the Mexican Peso price based on the Applicable
Exchange Rate, as described in the U.S. Offer to Purchase under the caption "The
U.S. Offer -- Terms of this U.S. Offer; Expiration Date."

     Subject to and effective upon the acceptance for payment of all or any
portion of the GDSs tendered by this GDS Letter of Transmittal in accordance
with the terms and conditions of the U.S. Offer -- including, if the U.S. Offer
is extended or amended, the terms and conditions of any extension or
amendment -- I hereby sell, assign and transfer to, or upon the order of,
Embotellador HM all right, title and interest in and to the GDSs tendered by
this GDS Letter of Transmittal. I hereby irrevocably constitute and appoint the
U.S. Receiving Agent as my agent and attorney-in-fact with respect to the
tendered GDSs, with full knowledge that the U.S. Receiving Agent is also acting
as the agent of Embotellador HM in connection with the U.S. Offer, with full
power of substitution, such power of attorney being deemed to be an irrevocable
power coupled with an interest, subject only to the limited right of withdrawal
as set forth in the U.S. Offer to Purchase, to (1) deliver GDRs evidencing the
tendered GDSs to Embotellador HM together with all accompanying evidences of
transfer and authenticity to, or upon the order of, Embotellador HM, upon
receipt by the U.S. Receiving Agent, as my agent, of the cash to be paid for the
tendered GDSs, (2) request a transfer of the tendered GDSs on the books of
Gemex, and (3) receive for the account of Embotellador HM all benefits and
otherwise exercise all rights of ownership of the tendered GDSs, all in
accordance with the terms and conditions of the U.S. Offer.

     I hereby represent and warrant that I have full power and authority to
tender, sell, assign and transfer the GDSs tendered by this GDS Letter of
Transmittal and that, when the tendered GDSs are accepted for payment,
Embotellador HM will acquire good, marketable and unencumbered title to the
tendered GDSs, free and clear of all liens, restrictions, charges and
encumbrances, and that the tendered GDSs are not subject to any adverse claims
or proxies. I will, upon request, execute and deliver any additional documents
deemed by Embotellador HM or the U.S. Receiving Agent to be necessary or
desirable to complete the sale, assignment and transfer of the GDSs tendered by
this GDS Letter of Transmittal and take any and all steps necessary to remove
any liens, restrictions, charges and encumbrances upon the tendered GDSs. I have
received a copy of, and I agree to all of the terms of, the U.S. Offer.

     The name(s) and address(es) of the registered holder(s) are printed above
as they appear on the GDRs representing the GDSs. The certificate number(s) and
the number of GDSs that I wish to tender are indicated in the appropriate boxes
above or, in the event that I left such information blank, I wish to tender all
my GDSs.

     Unless I have otherwise indicated by completing the box entitled "Special
Payment/Issuance Instructions" above, I hereby direct that cash be paid to the
undersigned or, in the case of a book-entry delivery of GDSs, that the cash be
credited to the account indicated above maintained with The Depository Trust
Company. Similarly, unless I have otherwise indicated by completing the box
entitled "Special Delivery Instructions," I hereby direct that the cash payment
be delivered to the address shown below my signature.

     If I have (1) tendered any GDSs that are not accepted for payment in the
U.S. Offer for any reason or (2) submitted GDRs for more GDSs than I wish to
tender, unless I have otherwise indicated by completing the boxes entitled
"Special Payment/Issuance Instructions" or "Special Delivery Instructions," I
hereby direct that receipts for any GDSs that are not tendered or not accepted
for payment should be issued in the name of the undersigned, if applicable, and
delivered to the address shown below my signature, or, in the case of a
book-entry transfer of GDSs, that GDSs that are not tendered or accepted for
payment be credited to the account indicated above maintained with The
Depository Trust Company, in each case at Embotellador HM's expense, promptly
following the expiration or termination of the U.S. Offer.

     I understand that if I decide to tender GDSs, and Embotellador HM accepts
the GDSs for payment, this will constitute a binding agreement between me and
Embotellador HM, subject to the terms and conditions set forth in the U.S. Offer
to Purchase and this GDS Letter of Transmittal.

                                        6


     I also recognize that, under certain circumstances described in the U.S.
Offer to Purchase under the caption "The U.S. Offer -- Certain conditions to the
U.S. Offer" Embotellador HM may not be required to accept for payment any GDSs
tendered by this GDS Letter of Transmittal.

     All authority conferred in or agreed to be conferred in this GDS Letter of
Transmittal will survive my death or incapacity, and any obligation of mine
under this GDS Letter of Transmittal will be binding upon my heirs, executors,
administrators, personal representatives, trustees in bankruptcy, legal
representatives, successors and assigns. Except as stated in the U.S. Offer to
Purchase and Instruction 4 herein, this tender is irrevocable.

   PLEASE COMPLETE AND SIGN THIS SIGNATURE PAGE AND SUBSTITUTE FORM W-9 BELOW

                        (SEE INSTRUCTIONS 1, 2, 5 AND 6)

          SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2

     This GDS Letter of Transmittal must be signed by (1) the registered
holder(s) exactly as the name(s) of the registered holder(s) appear(s) on the
GDRs for the GDSs tendered or on the register of holders maintained by The Bank
of New York, as depositary, or (2) by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted with this GDS
Letter of Transmittal -- including any opinions of counsel, certifications and
other information as may be necessary for the GDSs to comply with the
restrictions on transfer, if any, applicable to the GDSs. If the signature below
is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or another acting in a similar fiduciary or representative
capacity, please set forth the signer's full title. (See Instruction 5).

- --------------------------------------------------------------------------------
                       SIGNATURE(S) OF HOLDER(S) OF GDSS
(EACH HOLDER MUST EXECUTE AND SIGN THIS SIGNATURE PAGE IF GDSS ARE HELD JOINTLY)

DATED ------------------------------------------------------------ , 2002

NAME(S)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 (PLEASE PRINT)

CAPACITY
- --------------------------------------------------------------------------------

ADDRESS
- --------------------------------------------------------------------------------
                                   (ZIP CODE)

TAX IDENTIFICATION OR SOCIAL SECURITY NO.
- -------------------------------------------------------
                                                   (SEE INSTRUCTION 9)

AREA CODE AND TELEPHONE NO.
- --------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                            SIGNATURE(S) GUARANTEED
                        (SEE INSTRUCTION 2, IF REQUIRED)

ELIGIBLE GUARANTOR INSTITUTION
- ----------------------------------------------------------------------

OFFICIAL SIGNATURE
- --------------------------------------------------------------------------------

DATED: ------------------------------------------------------------ , 2002

                                        7


                                                                                     
- --------------------------------------------------------------------------------------------------------------------------------
                                 PAYOR'S NAME:  THE BANK OF NEW YORK, AS U.S. RECEIVING AGENT.
- --------------------------------------------------------------------------------------------------------------------------------
   SUBSTITUTE                   PART 1:  TAXPAYER IDENTIFICATION NUMBER ("TIN") -- PLEASE    TIN: -----------------------------
   FORM W-9                     PROVIDE YOUR TIN IN THE SPACE AT RIGHT. IF YOU HAVE NOT      (SOCIAL SECURITY NUMBER OR EM-
                                YET RECEIVED YOUR TIN, PLEASE INDICATE BY CHECKING THE BOX   PLOYER IDENTIFICATION NUMBER)
                                AT RIGHT AND COMPLETING THE CERTIFICATE BELOW.               AWAITING TIN [ ]
                               ------------------------------------------------------------------------------------------------
 Department of the Treasury     PART 2:  BACKUP WITHHOLDING -- CHECK THE BOX IF (X) YOU ARE A U.S. PERSON (INCLUDING A U.S.
 Internal Revenue Service       RESIDENT ALIEN), AND (Y) YOU ARE NOT SUBJECT TO BACKUP WITHHOLDING UNDER THE PROVISIONS OF SEC-
 PAYOR'S REQUEST FOR TAXPAYER   TION 340(A)(1)(C) OF THE INTERNAL REVENUE CODE BECAUSE EITHER (1) YOU ARE EXEMPT FROM BACKUP
 IDENTIFICATION NUMBER          WITHHOLDING, (2) YOU HAVE NOT BEEN NOTIFIED THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING AS A
                                RESULT OF FAILURE TO REPORT ALL INTEREST OR DIVIDENDS OR (3) THE INTERNAL REVENUE SERVICE HAS
                                NOTIFIED YOU THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING [ ]
                               ------------------------------------------------------------------------------------------------
                                PART 3:  CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION
                                PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE
                                SIGNATURE -------------------------  DATE ------------, 2002
 -------------------------------------------------------------------------------------------------------------------------------



- --------------------------------------------------------------------------------

             CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of the payment, 30% of the
payments made to me may be withheld.

- --------------------------------------------------------------------------------
             Signature                                                      Date

- --------------------------------------------------------------------------------

FORM INSTRUCTIONS:  You must not check the box in Part 2 above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, then you may check the box in Part 2 above.

FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 30%
OF ANY CASH PAYMENTS. THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING.
PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

                                        8


    INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE U.S. OFFER

     1.  DELIVERY OF GDS LETTER OF TRANSMITTAL AND CERTIFICATES.  You must
complete this GDS Letter of Transmittal if you are a registered holder of GDSs
and either (1) you wish to tender the GDRs evidencing your GDSs to the U.S.
Receiving Agent together with this GDS Letter of Transmittal or (2) you wish to
tender your GDSs by book-entry transfer to the U.S. Receiving Agent account at
The Depository Trust Company and you elect to submit this GDS Letter of
Transmittal to the U.S. Receiving Agent instead of an Agent's Message. In order
to constitute a valid tender of your GDSs, unless you comply with the procedures
for guaranteed delivery described below, the U.S. Receiving Agent must receive
the following documents at the address listed above on or prior to the
expiration of the U.S. Offer: (1) GDRs evidencing the GDSs, in proper form for
transfer, or book-entry confirmation of transfer into the U.S. Receiving Agent's
account with The Depository Trust Company, (2) a properly completed and duly
executed GDS Letter of Transmittal, with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message instead of this GDS
Letter of Transmittal, and (3) all other documents required by this GDS Letter
of Transmittal.

     If you are a holder of the GDSs and wish to tender your GDSs, but (1) your
GDRs evidencing the GDSs are not immediately available, (2) time will not permit
such receipts for the GDSs or other required documents to reach the U.S.
Receiving Agent before the expiration of the U.S. Offer, or (3) the procedure
for book-entry transfer cannot be completed prior to the expiration of the U.S.
Offer, you may effect a tender if: (1) the tender is made through an Eligible
Guarantor Institution (as defined below); (2) prior to the expiration of the
U.S. Offer, the U.S. Receiving Agent receives from an Eligible Guarantor
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form we have provided, setting forth your name
and address and the amount of GDSs you are tendering and stating that the tender
is being made by Notice of Guaranteed Delivery; and (3) the U.S. Receiving Agent
receives within three New York Stock Exchange trading days after the date of
execution of the Notice of Guaranteed Delivery: (a) the GDRs for all physically
tendered GDSs, in proper form for transfer, or a book-entry confirmation of
transfer of the GDSs into the U.S. Receiving Agent's account at The Depository
Trust Company, as the case may be, (b) a properly completed and duly executed
GDS Letter of Transmittal, with any required signature guarantees, or, in the
case of a book-entry confirmation, an Agent's Message instead of the GDS Letter
of Transmittal, and (c) all other documents required by the GDS Letter of
Transmittal. The Notice of Guaranteed Delivery may be sent by overnight courier,
hand delivery, registered or certified mail or facsimile transmission and must
include a guarantee by an Eligible Guarantor Institution in the form set forth
in the Notice.

THE METHOD OF DELIVERY OF GDRs, GDS LETTERS OF TRANSMITTAL, NOTICES OF
GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS IS AT YOUR ELECTION. IF YOU
DELIVER YOUR GDRs BY MAIL, WE RECOMMEND REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO
ASSURE TIMELY DELIVERY. PLEASE SEND GDRs, GDS LETTERS OF TRANSMITTAL, NOTICE OF
GUARANTEED DELIVERY OR OTHER REQUIRED DOCUMENTS TO THE U.S. RECEIVING AGENT AT
THE ADDRESS LISTED ABOVE. PLEASE DO NOT SEND THESE DOCUMENTS TO EMBOTELLADOR HM.

     Embotellador HM will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of this GDS Letter of Transmittal
or delivery of an Agent's Message instead of the GDS Letter of Transmittal,
waives any right to receive any notice of the acceptance of such tender.

     2.  GUARANTEE OF SIGNATURES.  No signature guarantee on this GDS Letter of
Transmittal is required if:

          (a) this GDS Letter of Transmittal is signed by the registered holder
     of GDSs tendered with this GDS Letter of Transmittal, unless such holder(s)
     has completed either the box entitled "Special Payment/Issuance
     Instructions" or the box entitled "Special Delivery Instructions" above, or

          (b) the GDSs are tendered for the account of a firm that is an
     Eligible Guarantor Institution.

     In all other cases, an Eligible Guarantor Institution must guarantee the
signature(s) on this GDS Letter of Transmittal. (See Instruction 5). An
"Eligible Guarantor Institution" means a financial institution that is a
participant in the Security Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or The New York Stock Exchange, Inc. Medallion
Signature Program.

                                        9


     3.  INADEQUATE SPACE.  If the space provided in the box captioned
"Description of GDSs Tendered" is inadequate, the serial number(s) and/or the
number of GDSs tendered and any other required information should be listed on a
separate signed schedule which is attached to this GDS Letter of Transmittal.

     4.  PARTIAL TENDERS AND WITHDRAWAL RIGHTS.  If you are tendering less than
all of your GDSs, please fill in the number of GDSs which are to be tendered in
column 3 ("Principal Amount of GDSs Tendered") of the box entitled "Description
of GDSs Tendered." In that case, unless you have otherwise indicated by
completing the boxes entitled "Special Payment/Issuance Instructions" or
"Special Delivery Instructions," new GDR(s) for the remainder of the GDSs that
were evidenced by your old receipts(s) will be sent to the registered holder of
the GDSs, or in the case of a book-entry delivery of GDSs, the account of the
U.S. Receiving Agent with The Depository Trust Company will be credited with the
number of untendered GDSs, promptly after the expiration of the U.S. Offer. All
GDSs delivered to the U.S. Receiving Agent will be deemed to have been tendered
unless otherwise indicated.

     Tenders of GDSs made pursuant to the U.S. Offer may be withdrawn at any
time prior to the expiration date, as it may be extended at any time and from
time to time prior to the expiration date, subject to applicable law.
Thereafter, such tenders are irrevocable, except that they may be withdrawn
after December 6, 2002, unless theretofor accepted for payment by us as provided
in the U.S. Offer to Purchase. If we extend the period of time during which the
U.S. Offer is open, are delayed in accepting for payment or paying for GDSs, or
are unable to accept for payment or pay for GDSs pursuant to the U.S. Offer for
any reason, then, without prejudice to our rights under the U.S. Offer, the U.S.
Receiving Agent may, on our behalf, retain all the GDSs tendered and such GDSs
may not be withdrawn except to the extent that tendering security holders are
entitled to withdrawal rights as set forth in this Instruction 4. Any such delay
will be an extension of the U.S. Offer to the extent required by law.

     For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the U.S.
Receiving Agent at the address set forth above and must specify the name of the
person who tendered the GDSs to be withdrawn, the number of GDSs to be withdrawn
and the name of the registered holder of the GDSs, if different from that of the
person who tendered such GDSs. If the GDSs to be withdrawn have been delivered
to the U.S. Receiving Agent, a signed notice of withdrawal with (except in the
case of GDSs tendered by an Eligible Guarantor Institution) signatures
guaranteed by an Eligible Guarantor Institution must be submitted prior to the
acceptance of such GDSs for payment by us. In addition, such notice must
specify, in the case of GDSs tendered by delivery of GDRs, the name of the
registered holder (if different from that of the tendering security holder) and
the serial numbers shown on the particular GDRs evidencing the GDSs to be
withdrawn or, in the case of GDSs tendered by book-entry transfer, the name and
account or participant number at The Depository Trust Company to be credited
with the withdrawn GDSs. Withdrawals may not be rescinded, and GDSs withdrawn
will thereafter be deemed not validly tendered for purposes of the U.S. Offer.
However, withdrawn GDSs may be re-tendered by again following one of the
procedures described in this Offer to Purchase, as applicable, at any time prior
to the expiration date.

     5.  SIGNATURES ON GDS LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this GDS Letter of Transmittal is signed by the registered holder(s) of the
GDSs tendered hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the GDRs or on the register of holders maintained by
The Bank of New York, as Depositary. If any of the GDSs tendered hereby are
registered in the name of two or more joint owners, all such owners must sign
this GDS Letter of Transmittal. If any tendered GDSs are registered in different
name(s) on several receipt(s), it will be necessary to complete, sign and submit
as many separate GDS Letters of Transmittal as there are different registered
holders.

     When this GDS Letter of Transmittal is signed by the registered holder(s)
of the GDSs listed and transmitted by this GDS Letter of Transmittal, no
endorsement(s) of GDRs or separate stock power(s) are required unless checks
constituting cash payments are to be paid to a person other than the registered
holder(s). Signature(s) on the receipts or stock power(s) must be guaranteed by
an Eligible Guarantor Institution.

     If a person or persons other than the registered holder(s) of GDSs signs
the GDS Letter of Transmittal, GDRs for the GDSs must be endorsed or accompanied
by appropriate stock powers, signed exactly as the name or names of the
registered holder(s) that appears on the GDRs for the GDSs and also must be
accompanied by any opinions of counsel, certifications and other information as
Embotellador HM may require in accordance with the restrictions on transfer, if
any, applicable to the GDSs. Signatures on GDRs or stock powers must be
guaranteed by an Eligible Guarantor Institution.
                                        10


     If you are a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or act in a similar fiduciary or representative
capacity, and wish to sign this GDS Letter of Transmittal or any GDRs for GDSs
or stock powers, you must indicate your status when signing. If you are acting
in any of these capacities, you must submit proper evidence satisfactory to us
of your authority to so act unless we waive this requirement.

     6.  SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.  If checks constituting
cash payments are to be paid or delivered to a person other than the signer of
this GDS Letter of Transmittal, or to an address other than that shown above,
the boxes entitled "Special Payment/Issuance Instructions" and/or "Special
Delivery Instructions" on this GDS Letter of Transmittal should be completed.
GDRs for GDSs not accepted for payment will be returned by mail (See Instruction
4), or in the case of a book-entry transfer, be credited to the account
indicated above maintained with The Depository Trust Company.

     7.  IRREGULARITIES.  All questions as to the validity, form,
eligibility -- including time of receipt -- and acceptance of GDSs tendered for
payment will be determined by Embotellador HM in its sole discretion. Our
determination will be final and binding. We reserve the absolute right to reject
any and all tenders of GDSs improperly tendered or to not accept any GDSs; this
right is not limited to situations where the acceptance of tender might be
unlawful as determined by us or our counsel. We also reserve the absolute right
to waive any defects or irregularities or conditions of the U.S. Offer as to any
GDSs either before or after the expiration of the U.S. Offer -- including the
right to waive the ineligibility of any holder who seeks to tender GDSs in the
U.S. Offer. Our interpretation of the terms and conditions of the U.S. Offer as
to any particular GDSs either before or after the expiration of the U.S.
Offer -- including the terms and conditions of the GDS Letter of Transmittal and
the accompanying instructions -- will be final and binding. Unless waived, any
defects or irregularities in connection with tenders of GDSs for payment must be
cured within a reasonable period of time, as determined by us. Neither we, the
U.S. Receiving Agent nor any other person has any duty to give notification of
any defect or irregularity with respect to any tender of GDSs for payment, nor
will we have any liability for failure to give such notification.

     8.  QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.  Questions in
respect of the transactions contemplated in the U.S. Offer, the procedures for
tendering in the U.S. Offer and for additional copies of the U.S. Offer to
Purchase, this GDS Letter of Transmittal or the Notice of Guaranteed Delivery
should be directed to the U.S. Receiving Agent at one of the addresses set forth
above.

     9.  30% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9.  Under U.S. Federal income
tax law, a holder whose tendered GDSs are accepted for payment is required to
provide the U.S. Receiving Agent with the holder's correct taxpayer
identification number (e.g., social security number or employer identification
number) (the "TIN") on Substitute Form W-9 above. If the U.S. Receiving Agent is
not provided with the correct TIN, cash payments to such holders or other payees
with respect to GDSs purchased in the U.S. Offer may be subject to 30% backup
withholding. In addition, the Internal Revenue Service may subject the holder or
other payee to a $50 penalty.

     The box "Awaiting TIN" in Part 1 of the Substitute Form W-9 may be checked
if the tendering holder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box "Awaiting TIN" in Part
1 is checked, the holder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number above in order to avoid backup
withholding. Notwithstanding that the box "Awaiting TIN" in Part 1 is checked
and the Certificate of Awaiting Taxpayer Identification Number is completed, the
U.S. Receiving Agent may withhold 30% of all payments made prior to the time a
properly certified TIN is provided to the U.S. Receiving Agent. The U.S.
Receiving Agent will retain all amounts withheld during the 60-day period
following the date of the Substitute Form W-9. If the holder furnishes the U.S.
Receiving Agent with its TIN within 60 days after the date of the Substitute
Form W-9, the amounts retained during the 60-day period will be remitted to the
holder and no further amounts will be retained or withheld from payments made to
the holder thereafter. If, however, the holder has not provided the U.S.
Receiving Agent with its TIN within the 60-day period, amounts withheld will be
remitted to the IRS as backup withholding. In addition, 30% of all payments, if
any, made thereafter will be withheld and remitted to the IRS until a correct
TIN is provided.

     The holder is required to give the U.S. Receiving Agent the TIN of the
registered holder of the GDSs or of the last transferee appearing on the
transfers attached to, or endorsed on, the GDSs. If the GDSs are registered in
more than one name or are not in the name of the actual holder, consult the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which number to report.
                                        11


     Certain holders -- including, among others, corporations and financial
institutions -- may not be subject to these backup withholding and reporting
requirements. These holders should nevertheless complete the Substitute Form W-9
above, and check the box in Part 2 of the Substitute Form W-9, to avoid possible
erroneous backup withholding. A foreign person may qualify for an exemption from
backup withholding by submitting a properly completed IRS Form W-8BEN,
Certificate of Foreign Status of Beneficial Owner for United States Tax
Withholding, or other applicable Form W-8, signed under penalties of perjury,
attesting to the holder's foreign status. Please consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which holders are exempt from backup
withholding.

     Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.

     10.  CONDITIONS FOR COMPLETION OF U.S. OFFER.  We will not be required to
accept GDSs for payment if (i) less than 90% of all of the outstanding capital
stock of Gemex (including shares represented by CPOs and GDSs) on the expiration
date, is tendered in the Offers on or prior to the expiration date and not
withdrawn, (ii) less than all of the Securities of Gemex owned, directly or
indirectly, or which may be acquired on or before the expiration date, by
PepsiCo and its nominee identified in the Agreement to Tender, dated October 4,
2002, by and among BG LLC, Embotellador HM and PepsiCo, are tendered in the
Offers and not withdrawn, (iii) less than all of the Securities of Gemex owned,
directly or indirectly, or which may be acquired on or before the expiration
date, by Mr. Enrique C. Molina Sobrino and his affiliates identified in the
Agreement to Tender, dated October 4, 2002, by and among BG LLC, Embotellador HM
and Mr. Molina, are tendered in the Offers and not withdrawn, (iv) the
conditions to the Mexican Offer have not been satisfied or waived on or before
the expiration date of the Mexican Offer or the Mexican Offer has been
terminated without the purchase of any Securities, or (v) the other conditions
set forth in the U.S. Offer to Purchase under the caption "The U.S.
Offer -- Certain conditions to the U.S. Offer" are not satisfied or waived at
any time on or prior to the expiration date of the U.S. Offer.

     11.  NO CONDITIONAL TENDERS.  No alternative, conditional or contingent
tenders will be accepted. All tendering holders of GDSs, by execution of this
GDS Letter of Transmittal, waive any right to receive notice of the acceptance
of GDSs for payment.

     12.  LOST, DESTROYED OR STOLEN CERTIFICATES.  If any GDRs representing GDSs
have been lost, destroyed or stolen, the holder should check the box above
regarding lost, destroyed or stolen receipts and promptly notify the U.S.
Receiving Agent. The holder will then be instructed as to the steps that must be
taken in order to replace the receipts. This GDS Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen receipts have been followed.

     13.  TRANSFER TAXES.  You will not be obligated to pay any transfer taxes
in connection with the tender of GDSs in the U.S. Offer unless you instruct us
to make payment to, or request that GDSs not tendered or not accepted in the
U.S. Offer be registered in the name of, a person other than the registered
tendering holder. In those cases, you will be responsible for the payment of any
applicable transfer tax. If satisfactory evidence of payment of these taxes or
an exemption from payment is not submitted with this GDS Letter of Transmittal,
no payment will be made and no certificates for GDSs will be issued until such
evidence is received by the U.S. Receiving Agent.

IMPORTANT:  UNLESS YOU COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES DESCRIBED
ABOVE, A PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES) GDS LETTER OF TRANSMITTAL (OR A FACSIMILE OF THIS GDS
LETTER OF TRANSMITTAL), OR AN AGENT'S MESSAGE IN THE CASE OF BOOK-ENTRY
DELIVERY, TOGETHER WITH GDRs OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE U.S. RECEIVING AGENT ON OR
PRIOR TO THE EXPIRATION OF THE U.S. OFFER.

                                        12


     Questions or requests for assistance or additional copies of the U.S. Offer
to Purchase, the GDS Letter of Transmittal and any other documents may be
directed to the Information Agent at its address and telephone numbers set forth
below. A holder of Securities also may contact his or her broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
U.S. Offer.

                  The Information Agent for the U.S. Offer is:

                              [MORROW & CO. LOGO]
                           445 Park Avenue, 5th Floor
                            New York, New York 10022
                                 (212) 754-8000

              U.S. SECURITY HOLDERS CALL TOLL FREE: (800) 607-0088
             SECURITY HOLDERS OUTSIDE THE U.S. PLEASE CALL COLLECT
                        EMAIL: TENDER.INFO@MORROWCO.COM

                 The U.S. Dealer Manager for the U.S. Offer is:

                          [SALOMON SMITH BARNEY LOGO]
                              388 Greenwich Street
                            New York, New York 10013

EX-99.A.3

                                                                  Exhibit (a)(3)

                          [SALOMON SMITH BARNEY LOGO]

                              388 Greenwich Street
                               New York, NY 10013

                U.S. OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
        SERIES B COMMON SHARES, ORDINARY PARTICIPATION CERTIFICATES AND
                            GLOBAL DEPOSITARY SHARES

                                       OF

                           PEPSI-GEMEX, S.A. DE C.V.

                        at the U.S. Dollar Equivalent of

                  Mexican Pesos 5.91 Per Series B Common Share
                                    of Gemex

                                      and

           Mexican Pesos 17.73 Per Ordinary Participation Certificate
                                    of Gemex
         (each CPO representing one Series B Common Share, one Series D
             Preferred Share and one Series L Limited Voting Share)

                                      and

                Mexican Pesos 106.38 Per Global Depositary Share
                                    of Gemex
                        (each GDS representing six CPOs)

                                       by

                 PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.

                           AN INDIRECT SUBSIDIARY OF

                              BOTTLING GROUP, LLC
                     THE PRINCIPAL OPERATING SUBSIDIARY OF

                         THE PEPSI BOTTLING GROUP, INC.

   THIS U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME(4:00 P.M., MEXICO CITY TIME), ON NOVEMBER 5, 2002 UNLESS THIS U.S. OFFER IS
                                   EXTENDED.

                                                                 October 7, 2002

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

     We have been appointed by The Pepsi Bottling Group, Inc., a Delaware
corporation ("PBG"), to act as Dealer Manager in the United States in connection
with the offer to purchase for cash, by PBG Grupo Embotellador Hispano-Mexicano,
S.L. ("Embotellador HM"), a Spanish limited liability company and an indirect
subsidiary of Bottling Group, LLC, a Delaware limited liability company and the
principal operating subsidiary of PBG (the "U.S. Offer"), (1) all outstanding
Global Depositary Shares ("GDSs") of Pepsi-Gemex, S.A. de C.V. ("Gemex"), a
variable stock corporation organized under the laws of Mexico, and (2) all
outstanding Series B Common Shares of Gemex (the "Shares"), and all outstanding
Ordinary Participation Certificates of Gemex (the "CPOs", and collectively with
the Shares and GDSs, the "Securities") held by persons who are not Mexican
residents. Each CPO


represents one Series B Common Share, one Series D Preferred Share and one
Series L Limited Voting Share. Each GDS represents six CPOs. Simultaneously with
the U.S. Offer, Embotellador HM is offering in Mexico (the "Mexican Offer," and
collectively with the U.S. Offers, the "Offers") to purchase all outstanding
Shares and CPOs of Gemex, including those held by U.S. residents, on
substantially the same terms as the U.S. Offer.

     In the U.S. Offer, Embotellador HM is offering to purchase all the
outstanding GDSs at a price of Ps.106.38 per GDS, all outstanding Shares held by
persons who are not Mexican residents at a price of Ps.5.91 per Share, and all
outstanding CPOs held by persons who are not Mexican residents at a price of
Ps.17.73 per CPO, in cash, in each case less any withholding taxes and without
interest thereon. The purchase price for the Securities accepted for payment
pursuant to the U.S. Offer will be paid in U.S. dollars equivalent to the
applicable Mexican peso price in the U.S. Offer, based on the U.S. dollar to
Mexican peso exchange rate calculated using the average of the exchange rates
reported on each of the five consecutive business days ending two business days
prior to the expiration date of the U.S. Offer by Reuters and Bloomberg on their
FXBENCH page as the New York closing rate for the exchange of Mexican pesos and
U.S. dollars (the "Applicable Exchange Rate"). Embotellador HM will announce the
Applicable Exchange Rate by a press release not later than 9:00 a.m., New York
City time, on the next business day after the Applicable Exchange Rate is
determined. The Mexican Offer is open to all holders of Shares and CPOs,
including those held by U.S. residents. The purchase price for the Shares and
CPOs tendered in the Mexican Offer will be paid, at such holder's election, in
Mexican pesos or in U.S. dollars equivalent to the Mexican peso price in the
Mexican Offer based on the Applicable Exchange Rate. However, individuals
tendering Shares and CPOs into the Mexican Offer will be entitled to elect to
receive the purchase price in U.S. dollars only if they have an account in or
outside Mexico into which they can receive payment in U.S. dollars and the
information regarding such account has been provided to the custodian for their
Shares and CPOs.

     If you hold GDSs and would like to tender the underlying Shares and/or CPOs
instead of GDSs you may do so. A holder of GDSs may contact The Bank of New
York, as depositary, to convert its GDSs into CPOs and tender such CPOs in the
Mexican Offer. However, such holder will have to pay a fee of $5.00 for each 100
GDSs converted. If such holder chooses to convert its GDSs into CPOs and tender
into the Mexican Offer and elects to receive payment in Mexican pesos, such
holder will bear the risk of any fluctuation in the exchange rate after the
consummation of the Offers if it then wishes to convert its Mexican pesos into
U.S. dollars. If you are not a Mexican resident, you can tender Shares and CPOs
in either the U.S. Offer or the Mexican Offer. Mexican residents can only tender
Shares and CPOs held by them into the Mexican Offer. The conditions to the
Mexican Offer are substantially similar to those of the U.S. Offer. In the event
that the Mexican Offer is amended to increase or decrease the price offered for
the Securities, Embotellador HM will make a corresponding amendment to increase
or decrease the price offered for the Securities in the U.S. Offer.

     WE ARE REQUESTING THAT YOU PROMPTLY CONTACT YOUR CLIENTS FOR WHOSE ACCOUNTS
YOU HOLD GDSs IN CONNECTION WITH THE U.S. OFFER. For your information and for
forwarding to those of your clients for whom you hold GDSs registered in your
name or in the name of your nominee, we are enclosing the following documents:

          1.  The U.S. Offer to Purchase, dated October 7, 2002;

          2.  A printed form of letter that may be sent to your clients for
     whose account you hold GDSs registered in your name or in the name of a
     nominee, with space provided for obtaining such clients' instructions with
     regard to the U.S. Offer;

          3.  The GDS Letter of Transmittal to be used by holders of GDSs in
     accepting the U.S. Offer;

          4.  A form of Notice of Guaranteed Delivery;

          5.  Guidelines for Certification of Taxpayer Identification Number on
     Substitute Form W-9; and

          6.  The return envelope addressed to The Bank of New York (the "U.S.
     Receiving Agent") (for tendering GDSs).

     A tender of Shares and/or CPOs in the U.S. Offer by your clients may only
be made by the nominee for their Shares and/or CPOs pursuant to their
instructions. Please advise your clients to contact their nominee to effect such
a tender. Additional information can be obtained from Morrow & Co., Inc., the
Information Agent for the U.S. Offer (the "Information Agent"), at 445 Park
Avenue, 5th Floor, New York, New York 10022 at telephone (800) 654-2468 or (800)
607-0088. For a description of the procedures for tendering Shares and/or CPOs
in the

                                        2


U.S. Offer, see in the U.S. Offer to Purchase under the caption "The U.S.
Offer -- Procedure for tendering in the U.S. Offer -- Holders of Shares and
CPOs."

     WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE U.S. OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME (4:00 P.M. MEXICO CITY TIME) ON
NOVEMBER 5, 2002, UNLESS THE U.S. OFFER IS EXTENDED (AS IT MAY BE EXTENDED, THE
"EXPIRATION DATE"). GDSs TENDERED FOR PAYMENT PURSUANT TO THE U.S. OFFER MAY BE
WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE OR AT ANY TIME AFTER DECEMBER
6, 2002, IF EMBOTELLADOR HM HAS NOT ACCEPTED THE TENDERED GDSs FOR PAYMENT BY
THAT DATE.

     Any holder of GDSs who would like to participate in the U.S. Offer must do
one of the following on or prior to the Expiration Date:

     - Tender the GDSs by sending a properly completed and duly executed GDS
       Letter of Transmittal (or facsimile thereof) and all other documents
       required by the GDS Letter of Transmittal, together with the Global
       Depositary Receipt ("GDRs") evidencing the GDSs in proper form for
       transfer, to the U.S. Receiving Agent at one of its addresses set forth
       on the back cover of the U.S. Offer; or

     - If the GDSs are held in book-entry form, tender the GDSs by following the
       procedures for book-entry transfer described in the U.S. Offer to
       Purchase under the caption "Procedure for accepting this U.S.
       Offer -- Holders of GDSs" and by sending a properly completed and duly
       executed GDS Letter of Transmittal, with any required signature
       guarantees, or an Agent's Message (as defined below) instead of a GDS
       Letter of Transmittal, to the U.S. Receiving Agent.

     The term "Agent's Message" means a message, transmitted by The Depository
Trust Company ("DTC") to, and received by, the U.S. Receiving Agent and forming
a part of a book-entry confirmation which states that DTC has received an
express acknowledgment from the participant tendering the GDSs which are the
subject of such book-entry confirmation that such participant has received and
agrees to be bound by the terms of the GDS Letter of Transmittal and that the
offeror may enforce such agreement against such participant.

     If the registered holder of the GDSs wishes to tender the GDSs, but (1) the
GDRs evidencing the GDSs are not immediately available, (2) time will not permit
the GDRs evidencing the GDSs or other required documents to reach the U.S.
Receiving Agent before the expiration of the U.S. Offer; or (3) the procedure
for book-entry transfer cannot be completed before the expiration of the U.S.
Offer, a tender of GDSs may be effected by following the guaranteed delivery
procedures described in the U.S. Offer to Purchase under the caption "The U.S.
Offer -- Procedure for tendering in the U.S. Offer -- Holders of GDSs."

     Embotellador HM will not pay any fees or commissions to any broker, dealer
or other person for soliciting tenders of GDSs pursuant to the U.S. Offer (other
than the U.S. Dealer Manager, the U.S. Receiving Agent and the Information Agent
as described in the U.S. Offer to Purchase). It will, however, upon request,
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients.

     Any inquiries you may have with respect to the U.S. Offer and requests for
additional copies of the enclosed materials should be addressed to the
Information Agent at its address and telephone numbers set forth on the back
cover page of the U.S. Offer to Purchase.

Very truly yours,

SALOMON SMITH BARNEY

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON, THE AGENT OF EMBOTELLADOR HM, PBG, THE U.S. DEALER MANAGER,
THE U.S. RECEIVING AGENT, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM,
OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE U.S. OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.

                                        3

EX-99.A.4

                                                                  Exhibit (a)(4)
                U.S. OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
        SERIES B COMMON SHARES, ORDINARY PARTICIPATION CERTIFICATES AND
                            GLOBAL DEPOSITARY SHARES

                                       OF

                           PEPSI-GEMEX, S.A. DE C.V.

                        at the U.S. Dollar Equivalent of

                  Mexican Pesos 5.91 Per Series B Common Share
                                    of Gemex

                                      and

           Mexican Pesos 17.73 Per Ordinary Participation Certificate
                                    of Gemex
    (each CPO representing one Series B Common Share, one Series D Preferred
                  Share and one Series L Limited Voting Share)

                                      and

                Mexican Pesos 106.38 Per Global Depositary Share
                                    of Gemex
                        (each GDS representing six CPOs)

                                       by

                 PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.

                           AN INDIRECT SUBSIDIARY OF

                              BOTTLING GROUP, LLC
                     THE PRINCIPAL OPERATING SUBSIDIARY OF

                         THE PEPSI BOTTLING GROUP, INC.

   THIS U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME(4:00 P.M., MEXICO CITY TIME), ON NOVEMBER 5, 2002 UNLESS THIS U.S. OFFER IS
                                   EXTENDED.

                                                                 October 7, 2002

To Our Clients:

     Enclosed for your consideration is a U.S. Offer to Purchase, dated October
7, 2002 (the "U.S. Offer to Purchase"), and related GDS Letter of Transmittal
(the "GDS Letter of Transmittal") relating to the offer in the United States
(the "U.S. Offer") by PBG Grupo Embotellador Hispano-Mexicano, S.L.
("Embotellador HM"), a Spanish limited liability company and an indirect
subsidiary of Bottling Group, LLC, a Delaware limited liability company and the
principal operating subsidiary of The Pepsi Bottling Group, Inc., a Delaware
corporation ("PBG"), to purchase for cash (1) all outstanding Global Depositary
Shares ("GDSs") of Pepsi-Gemex, S.A. de C.V. ("Gemex"), a variable stock
corporation organized under the laws of Mexico, and (2) all outstanding Series B
Common Shares of Gemex (the "Shares"), and all outstanding Ordinary
Participation Certificates of Gemex (the "CPOs", and collectively with the
Shares and GDSs, the "Securities") held by persons who are not Mexican
residents. Each CPO represents one Series B Common Share, one Series D Preferred
Share and one Series L Limited Voting Share. Each GDS represents six CPOs.
Simultaneously with the U.S. Offer, Embotellador HM is offering in Mexico (the
"Mexican Offer," and collectively with the U.S. Offer, the "Offers") to purchase
all


outstanding Shares and CPOs of Gemex, including those held by U.S. residents, on
substantially the same terms as the U.S. Offer.

     In the U.S. Offer, Embotellador HM is offering to purchase all the
outstanding GDSs at a price of Ps.106.38 per GDS, all outstanding Shares held by
persons who are not Mexican residents at a price of Ps.5.91 per Share, and all
outstanding CPOs held by persons who are not Mexican residents at a price of
Ps.17.73 per CPO, in cash, in each case less any withholding taxes and without
interest thereon. The purchase price for the Securities accepted for payment
pursuant to the U.S. Offer will be paid in U.S. dollars equivalent to the
applicable Mexican peso price in the U.S. Offer, based on the U.S. dollar to
Mexican peso exchange rate calculated using the average of the exchange rates
reported on each of the five consecutive business days ending two business days
prior to the expiration date of the U.S. Offer by Reuters and Bloomberg on their
FXBENCH page as the New York closing rate for the exchange of Mexican pesos and
U.S. dollars (the "Applicable Exchange Rate"). Embotellador HM will announce the
Applicable Exchange Rate by a press release not later than 9:00 am, New York
City time, on the next business day after the Applicable Exchange Rate is
determined. The Mexican Offer is open to all holders of Shares and CPOs,
including those held by U.S. residents. The purchase price for the Shares and
CPOs tendered in the Mexican Offer will be paid, at such holder's election, in
Mexican pesos or in U.S. dollars equivalent to the Mexican peso price in the
Mexican Offer based on the Applicable Exchange Rate. However, individuals
tendering Securities into the Mexican Offer will be entitled to elect to receive
the purchase price in U.S. dollars only if they have an account outside Mexico
into which they can receive payment in U.S. dollars and the information
regarding such account has been provided to the Mexican Receiving Agent.

     THE MATERIALS RELATING TO THE U.S. OFFER ARE BEING FORWARDED TO YOU AS THE
BENEFICIAL OWNER OF THE GDSs HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN
YOUR NAME. IF YOU WISH TO TENDER SUCH GDSs IN THE U.S. OFFER, YOU MUST COMPLETE,
SIGN AND RETURN TO US THE INSTRUCTION FORM ATTACHED TO THIS LETTER. NONE OF THE
GDSs HELD BY US FOR YOUR ACCOUNT WILL BE TENDERED UNLESS WE RECEIVE SUCH WRITTEN
INSTRUCTIONS FROM YOU TO DO SO. UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN
IN THE SPACE PROVIDED, YOUR SIGNATURE(S) ON THE INSTRUCTION FORM SHALL
CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL THE GDSs HELD BY US FOR YOUR
ACCOUNT. A TENDER OF THE GDSs MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD OF
THE GDSs, PURSUANT TO YOUR INSTRUCTIONS.

     If you beneficially own GDSs but prefer to tender the underlying Shares and
CPOs, please instruct us to convert your GDSs into CPOs. We will, on your
behalf, contact The Bank of New York, as depositary, to convert your GDSs into
CPOs and tender such CPOs in the U.S. Offer or the Mexican Offer, as the case
may be, in accordance with the terms of the Offers and your instruction.
However, you will have to pay a fee of $5.00 for each 100 GDSs converted. If you
choose to convert your GDSs into CPOs and tender into the Mexican Offer and
elect to receive payment in Mexican pesos you will bear the risk of any
fluctuation in the exchange rate after the consummation of the Offers if you
then wish to convert your Mexican pesos into U.S. dollars. If you are not a
Mexican resident, you can tender Shares and CPOs in either the U.S. Offer or the
Mexican Offer. Mexican residents can only tender Shares and CPOs held by them in
the Mexican Offer. The conditions to the Mexican Offer are substantially similar
to those of the U.S. Offer. In the event that the Mexican Offer is amended to
increase or decrease the price offered for the Securities, Embotellador HM will
make a corresponding amendment to increase or decrease the price offered for the
Securities in the U.S. Offer.

     Accordingly, we request your instructions as to whether you wish us to
tender on your behalf the GDSs held by us for your account, pursuant to the
terms and subject to the conditions set forth in the enclosed U.S. Offer to
Purchase and GDS Letter of Transmittal, or convert the GDSs into CPOs.

     Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the GDSs on your behalf in accordance with the
provisions of the U.S. Offer. THE U.S. OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME (4:00 P.M. MEXICO CITY TIME) ON NOVEMBER 5, 2002, UNLESS THE U.S.
OFFER IS EXTENDED (AS IT MAY BE EXTENDED, THE "EXPIRATION DATE"). GDSs TENDERED
FOR PAYMENT PURSUANT TO THE U.S. OFFER MAY BE WITHDRAWN AT ANY TIME

                                        2


BEFORE THE EXPIRATION DATE OR AT ANY TIME AFTER DECEMBER 6, 2002, IF
EMBOTELLADOR HM HAS NOT ACCEPTED THE TENDERED GDSs FOR PAYMENT BY THAT DATE.

     If you wish to have us tender your GDSs or convert them into CPOs, please
so instruct us by completing, executing and returning to us the instruction form
on the back of this letter. The instruction form relates only to the tender or
conversion of GDSs. If you beneficially own Shares and/or CPOs of Gemex and
would like to tender your Shares and/or the CPOs in the U.S. Offer or in the
Mexican Offer, please contact the nominee for your Shares and/or CPOs to effect
such a tender.

     Any inquiries you may have with respect to the U.S. Offer and requests for
additional copies of the enclosed materials should be addressed to Morrow & Co.,
Inc., the Information Agent for the U.S. Offer, at its address and telephone
numbers set forth on the back cover page of the U.S. Offer to Purchase.

                                        3


    INSTRUCTION FORM FOR GDSS OF PEPSI-GEMEX, S.A. DE C.V. IN THE U.S. OFFER

     The undersigned acknowledges receipt of your letter and the enclosed
materials referred to therein related to the U.S. Offer by Embotellador HM to
purchase all the outstanding GDSs of Pepsi-Gemex, S.A. de C.V. and all
outstanding Shares and CPOs of Pepsi-Gemex held by persons who are not Mexican
residents.

     This will instruct you to tender or convert the number of GDSs indicated
below (and if no number is indicated, all GDSs) held by you for the account of
the undersigned in accordance with the terms and subject to the conditions set
forth in the U.S. Offer to Purchase and in the GDS Letter of Transmittal.

     Please tender the GDSs held by you for my account as indicated below:

        [ ] Please tender ______________ GDSs
[NUMBER OF GDSS]

        [ ] Please DO NOT tender any GDSs held by you for my account.

     Please convert the GDSs held by you for my account into CPOs as indicated
below:

        [ ] Please convert ______________ GDSs into CPOs
[NUMBER OF GDSS]

        [ ] Please DO NOT convert any GDSs held by you for my account.

Date:
- ------------------------, 2002

Signature(s):
- --------------------------------------------------------------------------------

Print Name(s) here:
- --------------------------------------------------------------------------------

Print Address(es):
- --------------------------------------------------------------------------------

Area Code and Telephone Number(s):
- --------------------------------------------------------------------------------

Tax Identification or Social Security Number(s):
- ------------------------------------------------------------------------

     NONE OF THE GDSs HELD BY US FOR YOUR ACCOUNT WILL BE TENDERED OR CONVERTED
UNLESS WE RECEIVE WRITTEN INSTRUCTIONS FROM YOU TO DO SO. UNLESS A SPECIFIC
CONTRARY INSTRUCTION IS GIVEN IN THE SPACE PROVIDED, YOUR SIGNATURE(S) HEREON
SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL THE GDSs HELD BY US FOR YOUR
ACCOUNT.

                                        4

EX-99.A.5

                                                                  EXHIBIT (a)(5)

                         NOTICE OF GUARANTEED DELIVERY

                                      FOR

                            GLOBAL DEPOSITARY SHARES

                                       OF

                           PEPSI-GEMEX, S.A. DE C.V.

     As set forth in the U.S. Offer to Purchase, dated October 7, 2002 (the
"U.S. Offer to Purchase") by PBG Grupo Embotellador Hispano-Mexicano, S.L.
("Embotellador HM"), a Spanish limited liability company and an indirect
subsidiary of Bottling Group, LLC, the principal operating subsidiary of The
Pepsi Bottling Group, Inc., a Delaware corporation, and in the accompanying GDS
Letter of Transmittal and instructions thereto (the "GDS Letter of Transmittal",
and together with the U.S. Offer to Purchase, the "U.S. Offer"), this form or
one substantially equivalent hereto must be used to accept Embotellador HM's
U.S. Offer to purchase for cash all outstanding Global Depositary Shares
("GDSs") of Pepsi-Gemex, S.A. de C.V., a variable stock corporation organized
under the laws of Mexico ("Gemex"), if (i) Global Depositary Receipts ("GDRs")
evidencing GDSs to be tendered for purchase and payment are not lost but are not
immediately available, (ii) time will not permit the GDS Letter of Transmittal,
GDRs or other required documents to reach the U.S. Receiving Agent prior 5:00
p.m. New York City time on November 5, 2002 (4:00 p.m., Mexico City time) or
prior to the end of any applicable extension period for the U.S. Offer (the
"Expiration Date"), or (iii) the procedure for book-entry transfer cannot be
completed prior to the Expiration Date. This form may be delivered by one of the
institutions identified by Instruction 2 of the GDS Letter of Transmittal as an
Eligible Guarantor Institution by mail or hand delivery or transmitted, via
telegram, telex or facsimile, to the U.S. Receiving Agent as set forth below.
All capitalized terms not defined herein are defined in the U.S. Offer.

 THIS U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME(4:00 P.M., MEXICO CITY TIME), ON NOVEMBER 5, 2002 UNLESS THIS U.S. OFFER IS
                                   EXTENDED.

                           TO: THE BANK OF NEW YORK,
                              U.S. RECEIVING AGENT

                                                            
          By Mail:                 By Facsimile Transmission          By Hand or Overnight
                               (for Eligible Institutions Only):            Courier:
    The Bank of New York
Tender & Exchange Department            (212) 815-6433                The Bank of New York
       P.O. Box 11248                                             Tender & Exchange Department
    Church Street Station            Confirm by Telephone:             101 Barclay Street
New York, New York 10286-1248                                      Receive and Deliver Window
                                        (212) 815-6212                    Street Level
                                                                    New York, New York 10286



     DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION VIA TELEGRAM,
TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.

     This form is not to be used to guarantee signatures. If a signature on the
GDS Letter of Transmittal is required to be guaranteed by an Eligible Guarantor
Institution under the instructions thereto, such signature guarantee must appear
in the applicable space provided in the signature box on the GDS Letter of
Transmittal.


Ladies and Gentlemen:

     The undersigned hereby tenders to Embotellador HM, upon the terms and
subject to the conditions set forth in the U.S. Offer, receipt of which is
hereby acknowledged, the aggregate number of GDSs set forth below pursuant to
the guaranteed delivery procedures set forth in the U.S. Offer to Purchase.

     The undersigned agrees that tenders of GDSs pursuant to the U.S. Offer may
be withdrawn any time prior to the Expiration Date as provided in the U.S. Offer
to Purchase.

     All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.

                                                       

Signatory: ---------------------------------------------  --------------------------------------------------------
- --------------------------------------------------------  --------------------------------------------------------
- --------------------------------------------------------  --------------------------------------------------------
                                                          Address: -----------------------------------------------
Number of GDSs Tendered:                                  --------------------------------------------------------
- --------------------------------------------------------  Area Code and Telephone No.: -----------------------
No(s). of GDSs (if available):                            If GDSs will be delivered by book-entry transfer at The
- --------------------------------------------------------  Depository Trust Company, provide account number.
- --------------------------------------------------------  Depository Account No.: -----------------------------
Date: --------------------------------------------------



This Notice of Guaranteed Delivery must be signed by the registered holder(s) of
GDSs exactly as its (their) name(s) appear on GDRs or on a security position
listing as the owner of GDSs or by person(s) authorized to become registered
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.

                      Please print name(s) and address(es)

             
Name(s):        ------------------------------------------------------------
                ------------------------------------------------------------
Capacity:       ------------------------------------------------------------
                ------------------------------------------------------------
Address(es):    ------------------------------------------------------------
                ------------------------------------------------------------



     Do not send GDRs with this form. GDRs should be sent to the U.S. Receiving
Agent together with a properly completed and duly executed GDS Letter of
Transmittal.

                                        2


                                   GUARANTEE
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     The undersigned, an Eligible Guarantor Institution, hereby (a) represents
that each holder of GDSs on whose behalf this tender is being made "own(s)" the
GDSs covered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended, (b) represents that such tender of GDSs
complies with such Rule 14e-4, and (c) guarantees that, within three New York
Stock Exchange trading days after the date of execution of this Notice of
Guaranteed Delivery, a properly completed and duly executed GDS Letter of
Transmittal (or a facsimile thereof), the GDRs for all physically tendered GDSs,
in proper form for transfer, or a book-entry confirmation of transfer of such
GDSs into the U.S. Receiving Agent's account at The Depository Trust Company,
including the agent's message instead of a GDS Letter of Transmittal, as the
case may be, with any required signature guarantees and any other documents
required by the GDS Letter of Transmittal, will be deposited by the undersigned
with the U.S. Receiving Agent.

THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE GDS LETTER OF TRANSMITTAL
AND THE GDRS FOR ALL GDSS TENDERED HEREBY, OR, IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE INSTEAD OF A LETTER OF TRANSMITTAL, TO THE U.S.
RECEIVING AGENT WITHIN THE TIME PERIOD SET FORTH ABOVE AND THAT FAILURE TO DO SO
COULD RESULT IN FINANCIAL LOSS TO THE UNDERSIGNED.

                                                
Name of Firm:
  -----------------------------------------
                                                   -----------------------------------------------
                                                   AUTHORIZED SIGNATURE
Address:                                           Name:
- -----------------------------------------------    -----------------------------------------------
                                                   Title:
- -----------------------------------------------    -----------------------------------------------
                                                   Date:
- -----------------------------------------------    -----------------------------------------------

Area Code and
Telephone Number:
  ------------------------------------



                                        3

EX-99.A.6

                                                                  EXHIBIT (a)(6)

            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU)
TO GIVE THE PAYER -- Social Security numbers have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: i.e. 00-0000000. The table below will help
determine the number to give the payer. All "Section" references are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.



- ------------------------------------------------------------
                                              GIVE THE
                                           SOCIAL SECURITY
       FOR THIS TYPE OF ACCOUNT:            NUMBER OF --
- ------------------------------------------------------------
                                   
 1.  Individual                          The individual
 2.  Two or more individuals (joint or,  The actual owner of
     account)                            the account if
                                         combined funds, the
                                         first individual on
                                         the account(1)
 3.  Custodian account of a minor        The Minor(2)
     (Uniform Gift to Minors Act)
 4.  a. The usual revocable savings      The grantor-
        trust account (grantor is also   trustee(1)
        trustee)
     b. So-called trust account that is  The actual owner(1)
        not a legal or valid trust
        under state law
 5.  Sole proprietorship                 The owner(3)




- ------------------------------------------------------------
                                          GIVE THE EMPLOYER
                                           IDENTIFICATION
       FOR THIS TYPE OF ACCOUNT:            NUMBER OF --
- ------------------------------------------------------------
                                   
 6.  A valid trust, estate, or pension   The legal entity(4)
     trust
 7.  Corporate                           The corporation
 8.  Association, club, religious,       The organization
     charitable, educational, or other
     tax-exempt organization account
 9.  Partnership                         The partnership
10.  A broker or registered nominee      The broker or
                                         nominee
11.  Account with the Department of      The public entity
     Agriculture in the name of a
     public entity (such as a state or
     local government, school district,
     or prison) that receives
     agricultural program payments


- ------------------------------------------------------------
- ------------------------------------------------------------

(1) List first and circle the name of the person whose number you furnish. If
    only one person on a joint account has a social security number, that
    person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
    "doing business as" name. You may use either your social security number or
    your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
    (Do not furnish the taxpayer identification number of the personal
    representative or trustee unless the legal entity itself is not designated
    in the account title.)

NOTE:

         (i) If no name is circled when there is more than one name, the number
             will be considered to be that of the first name listed.

         (ii) If you are an individual, you must generally provide the name
              shown on your social security card. However, if you have changed
              your last name, for instance, due to marriage, without informing
              the Social Security Administration of the name change, please
              enter your first name, the last name shown on your social security
              card, and your new last name.

        (iii) For a joint account, only the person whose taxpayer identification
              number is shown on the Substitute Form W-9 should sign the form.


            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9
                                     PAGE 2

OBTAINING A NUMBER
If you do not have a taxpayer identification number, obtain Form SS-5,
Application for a Social Security Card, at your local Social Security
Administration office, or Form SS-4, Application for Employer Identification
Number (for business and all other entities), by calling 1 (800) TAX-FORM or
from your local office of the Internal Revenue Service, and apply for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING
  Payees specifically exempted from withholding include:
  - An organization exempt from tax under section 501(a), an individual
    retirement account (IRA), or a custodial account under Section 403(b)(2), if
    the account satisfies the requirements of Section 401(f)(7).
  - The United States or a state thereof, the District of Columbia, a possession
    of the United States, or a political subdivision or wholly-owned agency or
    instrumentality of any one or more of the foregoing.
  - An international organization or any agency or instrumentality thereof.
  - A foreign government and any political subdivision, agency or
    instrumentality thereof.
  Payees that may be exempt from backup withholding include:
  - A corporation.
  - A financial institution.
  - A dealer in securities or commodities required to register in the United
    States, the District of Columbia, or a possession of the United States.
  - A real estate investment trust.
  - A common trust fund operated by a bank under section 584(a).
  - An entity registered at all times during the tax year under the investment
    Company Act of 1940.
  - A middleman known in the investment community as a nominee or custodian.
  - A futures commission merchant registered with the Commodity Futures Trading
    Commission.
  - A foreign central bank of issue.
  Payments of dividends and patronage dividends generally exempt from backup
withholding include:
  - Payments to nonresident aliens subject to withholding under Section 1441.
  - Payments to partnerships not engaged in a trade or business in the United
    States and that have at least one nonresident alien partner.
  - Payments of patronage dividends not paid in money.
  - Payments made by certain foreign organizations.
  - Section 404(k) payments made by an ESOP.
  Payments of interest generally exempt from backup withholding include:
  - Payments of interest on obligations issued by individuals. Note: You may be
    subject to backup withholding if this interest is $600 or more and you have
    not provided your correct taxpayer identification number to the payer.
  - Payments of tax-exempt interest (including exempt-interest dividends under
    section 852).
  - Payments described in section 6049(b)(5) to nonresident aliens.
  - Payments on tax-free covenant bonds under section 1451.
  - Payments made by certain foreign organizations.
  - Mortgage interest paid to you.
Certain payments, other than payments of interest, dividends, and patronage
dividends, that are exempt from information reporting are also exempt from
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A and 6050N.

EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO
AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER.
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, CHECK THE BOX "EXEMPT FROM BACKUP
WITHHOLDING" ON FORM W-9 OR CHECK THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9,
AND RETURN TO THE PAYER. ALSO SIGN AND DATE THE FORM.

PRIVACY ACT NOTICE -- Section 6109 requires you to provide your correct taxpayer
identification number to payers, who must report the payments to the IRS. The
IRS uses the number for identification purposes and may also provide this
information to various government agencies for tax enforcement or litigation
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 30% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.

PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish
your taxpayer identification number to a payer, you are subject to a penalty of
$50 for each such failure unless your failure is due to reasonable cause and not
to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

                  FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
                  CONSULTANT OR THE INTERNAL REVENUE SERVICE.

EX-99.A.7

                                                                  EXHIBIT (a)(7)

   This announcement is not an offer to purchase or a solicitation of an offer
     to sell Securities. The U.S. Offer is made solely by the U.S. Offer to
  Purchase dated October 7, 2002 and the related GDS Letter of Transmittal and
    is not being made to, nor will tenders be accepted from or on behalf of,
    holders of Securities in any jurisdiction in which the making of the U.S.
  Offer or acceptance thereof would not be in compliance with the laws of such
       jurisdiction. In those jurisdictions where it is required that the
   U.S. Offer be made by a licensed broker or dealer, the U.S. Offer shall be
  deemed to be made on behalf of PBG Grupo Embotellador Hispano-Mexicano, S.L.
   by Salomon Smith Barney, Inc. or one or more registered brokers or dealers
                  licensed under the laws of such jurisdiction.


            NOTICE OF U.S. OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
         SERIES B COMMON SHARES, ORDINARY PARTICIPATION CERTIFICATES AND
                            GLOBAL DEPOSITARY SHARES
                                       OF
                            PEPSI-GEMEX, S.A. DE C.V.

                        at the U.S. Dollar Equivalent of

                  Mexican Pesos 5.91 Per Series B Common Share
                                    of Gemex


                                       and

           Mexican Pesos 17.73 Per Ordinary Participation Certificate
                                    of Gemex
 (each CPO representing one Series B Common Share, one Series D Preferred Share
                     and one Series L Limited Voting Share)

                                       and

                Mexican Pesos 106.38 Per Global Depositary Share
                                    of Gemex
                        (each GDS representing six CPOs)

                                       by

                  PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.

                            AN INDIRECT SUBSIDIARY OF

                               BOTTLING GROUP, LLC

                      THE PRINCIPAL OPERATING SUBSIDIARY OF

                         THE PEPSI BOTTLING GROUP, INC.

THE U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME (4:00 P.M., MEXICO CITY TIME), ON NOVEMBER 5, 2002 UNLESS THE U.S. OFFER
IS EXTENDED.


                                                                 October 7, 2002


         PBG Grupo Embotellador Hispano-Mexicano, S.L. ("Embotellador HM"), a
Spanish indirect subsidiary of Bottling Group, LLC ("BG LLC"), a Delaware
limited liability company and the principal operating subsidiary of The Pepsi
Bottling Group, Inc., a Delaware corporation ("PBG"), is offering in the United
States (the "U.S. Offer" or the "U.S. Offer to Purchase") to purchase for cash
(1) all outstanding Global Depositary Shares ("GDSs") of Pepsi-Gemex, S.A. de
C.V. ("Gemex"), a variable stock corporation

organized under the laws of Mexico, and (2) all outstanding Series B Common
Shares of Gemex (the "Shares"), and all outstanding Ordinary Participation
Certificates of Gemex (the "CPOs", and collectively with the Shares and GDSs,
the "Securities") held by persons who are not Mexican residents. Each CPO
represents one Series B Common Share, one Series D Preferred Share and one
Series L Limited Voting Share. Each GDS represents six CPOs. Simultaneously with
the U.S. Offer, Embotellador HM is offering in Mexico (the "Mexican Offer" and,
collectively with the U.S. Offer, the "Offers") to purchase all outstanding
Shares and CPOs of Gemex, including those held by U.S. residents, on
substantially the same terms as the U.S. Offer.

         In the U.S. Offer, Embotellador HM is offering to purchase all the
outstanding GDSs at a price of Ps106.38 per GDS, all outstanding Shares held by
persons who are not Mexican residents at a price of Ps5.91 per Share, and all
outstanding CPOs held by persons who are not Mexican residents at a price of
Ps17.73 per CPO, in cash, in each case less any withholding taxes and without
interest thereon. The purchase price for the Securities accepted for payment
pursuant to the U.S. Offer will be paid in U.S. dollars equivalent to the
applicable Mexican peso price in the U.S. Offer, based on the U.S. dollar to
Mexican peso exchange rate calculated using the average of the exchange rates
reported on each of the five consecutive business days ending two business days
prior to the expiration date of the U.S. Offer by Reuters and Bloomberg on their
FXBENCH page as the New York closing rate for the exchange of Mexican pesos and
U.S. dollars (the "Applicable Exchange Rate"). Embotellador HM will announce the
Applicable Exchange Rate by a press release not later than 9:00 a.m., New York
City time, on the next business day after the Applicable Exchange Rate is
determined.

         The Mexican Offer is open to all holders of Shares and CPOs, including
those held by U.S. residents. Any holder who is not a Mexican resident can
tender Shares and CPOs in either the U.S. Offer or the Mexican Offer. Mexican
residents can only tender Shares and CPOs held by them into the Mexican Offer.
The purchase price for the Shares and CPOs tendered in the Mexican Offer will be
paid, at such holder's election, in Mexican pesos or in U.S. dollars equivalent
to the Mexican peso price in the Mexican Offer based on the Applicable Exchange
Rate. However, individuals tendering Shares and CPOs into the Mexican Offer will
be entitled to elect to receive the purchase price in U.S. dollars only if they
have an account in or outside Mexico into which they can receive payment in U.S.
dollars and the information regarding such account has been provided to the
custodian for their Shares and CPOs.

         A holder of GDSs may contact The Bank of New York, as depositary, to
convert its GDSs into CPOs and tender such CPOs in the Mexican Offer. However,
such holder will have to pay a fee of $5.00 for each 100 GDSs converted. If a
holder chooses to convert its GDSs into CPOs and tender into the Mexican Offer
and elects to receive payment in Mexican pesos it will bear the risk of any
fluctuation in the exchange rate after the consummation of the Offers, if it
then wishes to convert its Mexican pesos to U.S. dollars. The conditions to the
Mexican Offer are substantially similar to those in the U.S. Offer. In the event
that the Mexican Offer is amended to increase or decrease the price offered for
the Securities, Embotellador HM will make a corresponding amendment to increase
or decrease the price offered for the Securities in the U.S. Offer. Payment for
Shares and CPOs purchased in the Offers will be subject in all cases to a 5%
Mexican withholding tax on the gross proceeds of the sale. A holder may obtain a
refund under specified circumstances set forth in the U.S. Offer to Purchase.

         Embotellador HM and BG LLC have entered into agreements to tender with
the two major security holders of Gemex. In an agreement with PepsiCo, Inc. (the
"PepsiCo Agreement to Tender"), PepsiCo has agreed to tender, and to cause its
nominee identified in such agreement to tender, in the Offers and not withdraw
all of the outstanding Securities owned or acquired by them prior to the
expiration date, subject to their right to accept more competitive offers. As of
August 9, 2002, PepsiCo beneficially owned, directly or indirectly,
approximately 42.7% of the voting power of all classes of PBG's voting stock
and, according to Gemex's Annual Report on Form 20-F for the year ended December
31, 2001, which was filed with the Securities and Exchange Commission on July 1,
2002, also owned, as of June 26, 2002, directly or indirectly, approximately
34.4% of the total capital stock of Gemex. In addition, as it is strategically
important that Embotellador HM purchase Gemex, PepsiCo has agreed to pay
Embotellador HM approximately Ps.172.7 million in order to facilitate the
purchase of Gemex and ensure a smooth ownership transition of Gemex. Such
payment will be made before the completion of the Offers. In an agreement with
Mr. Enrique C. Molina Sobrino who, according to an amendment to his Schedule 13D
filed on September 18, 2002, owned, directly or indirectly, as of September 10,
2002, approximately 40.0% of the total capital stock of Gemex (the "Molina
Agreement to Tender"), Mr. Molina


                                       2

has agreed to tender, and to cause his affiliates identified in such agreement
to tender, and not withdraw in the Offers all of the outstanding Securities
owned or acquired by them prior to the expiration date, subject to their right
to accept more competitive offers.

         Embotellador HM will not be required to accept Securities for payment
if (i) less than 90% of all of the outstanding capital stock of Gemex (including
shares represented by CPOs and GDSs) on the expiration date, is tendered in the
Offers on or prior to the expiration date and not withdrawn, (ii) less than all
of the Securities of Gemex owned, directly or indirectly, or which may be
acquired on or before the expiration date, by PepsiCo and its nominee identified
in the PepsiCo Agreement to Tender are tendered in the Offers and not withdrawn,
(iii) less than all of the Securities of Gemex owned, directly or indirectly, or
which may be acquired on or before the expiration date, by Mr. Molina and his
affiliates identified in the Molina Agreement to Tender are tendered in the
Offers and not withdrawn, (iv) the conditions to the Mexican Offer have not been
satisfied or waived on or before the expiration date of the Mexican Offer or the
Mexican Offer has been terminated without the purchase of any Securities, or (v)
the other conditions set forth in the U.S. Offer to Purchase are not satisfied
or waived at any time on or prior to the expiration date of the U.S. Offer.

         PBG intends to issue commercial paper in an amount of up to $1.2
billion prior to the expiration date of the Offers. The commercial paper will
bear interest at a rate to be determined immediately prior to or on the date of
issuance. The proceeds of this issuance will be used to finance the Offers and
to refinance a portion of the indebtedness of Gemex following the consummation
of the Offers. As support for the commercial paper, PBG has entered into a
bridge revolving credit facility with Salomon Smith Barney Inc., Credit Suisse
First Boston Corporation and Deutsche Bank Securities Inc., as joint lead
arrangers, Citibank N.A., Credit Suisse First Boston, Cayman Islands Branch and
Deutsche Bank AG New York Branch, as joint syndication agents, and certain
lenders specified in the bridge revolving credit facility agreement, to provide
up to $1.2 billion. The bridge revolving credit facility is guaranteed by BG
LLC. Borrowings under the bridge revolving credit facility may be repaid and
reborrowed until April 30, 2003, when the term of the bridge revolving credit
facility expires. Borrowings will bear interest, at the option of PBG, at the
base rate (i.e., prime rate) of Credit Suisse First Boston or LIBOR plus an
applicable margin determined by reference to PBG's credit rating. The bridge
revolving credit facility is unsecured. PBG does not anticipate borrowing under
the bridge revolving credit facility unless and to the extent that it does not
issue commercial paper as described above. PBG, through BG LLC, will provide
Embotellador HM with the funds raised by it to purchase all the Securities
validly tendered and not withdrawn in the Offers. Any remaining funds necessary
to consummate the Offers will be provided by BG LLC from available cash or
borrowings utilizing existing credit facilities of BG LLC. However, the Offers
are not conditioned upon the receipt by PBG of the proceeds of either such
financing or the advance of such funds to BG LLC or Embotellador HM. PBG expects
to repay the commercial paper and/or the bridge revolving credit facility, as
the case may be, with the funds provided by BG LLC from proceeds of a private
placement of debt securities of BG LLC to be completed after the consummation of
the Offers. Up to $1.0 billion of debt securities are expected to be guaranteed
by PepsiCo.

         To tender GDSs pursuant to the U.S. Offer, (a) if GDSs are held in
certificated form, a properly completed and duly executed GDS Letter of
Transmittal (or facsimile thereof) together with the Global Depositary Receipts
("GDRs") for the GDSs to be tendered and all other documents required by the GDS
Letter of Transmittal must be received by The Bank of New York (the "U.S.
Receiving Agent") by the expiration date, (b) if GDSs are held in book-entry
form, the GDSs must be delivered by the holder thereof to the U.S. Receiving
Agent pursuant to the procedures for book-entry transfer described in the U.S.
Offer to Purchase, and a confirmation of such delivery as well as a properly
completed and duly executed GDS Letter of Transmittal (or a facsimile thereof)
or an Agent's Message, as defined below, must also be received by the U.S.
Receiving Agent by the expiration date. Alternatively, a holder may be able to
use the guaranteed delivery procedure described in the U.S. Offer to Purchase.
The term "Agent's Message" means a message, transmitted by The Depository Trust
Company ("DTC") to, and received by, the U.S. Receiving Agent and forming a part
of a book-entry confirmation which states that DTC has received an express
acknowledgment from the participant tendering the GDSs which are the subject of
such book-entry


                                       3

confirmation that such participant has received and agrees to be bound by the
terms of the GDS Letter of Transmittal and that Embotellador HM may enforce such
agreement against such participant.

     If a holder wishes to tender its Shares and CPOs in the U.S. Offer in
accordance with its terms, it must do so by book-entry transfer as described in
the U.S. Offer to Purchase. If such holder holds Shares in certificated form it
should promptly contact a broker, dealer, bank, trust company, financial
institution or other nominee who is a participant in the book-entry transfer
system of S.D. Indeval, S.A. de C.V., Institucion para el Deposito de Valores,
commonly known as "Indeval," a privately-owned central securities depositary
that acts as clearing house, depositary, custodian, settlement, transfer and
registration institution for the Mexican Stock Exchange, and arrange for the
holding by such nominee of the Shares on behalf of the holder in book-entry
form. In order for a book-entry transfer to constitute a valid tender of such
holder's Shares and CPOs in the U.S. Offer, the Shares and CPOs must be tendered
by a nominee who is an Indeval participant into the account of Acciones y
Valores de Mexico, S.A. de C.V., or Accival (the "Mexican Receiving Agent"),
with Indeval and the Mexican Receiving Agent must receive a properly completed
and duly executed letter from the Indeval participant who tendered the holder's
Shares and CPOs into its account accepting the U.S. Offer (the "Acceptance
Letter") prior to the expiration date of the U.S. Offer.

         For purposes of the U.S. Offer, Embotellador HM will be deemed to have
accepted for payment tendered Securities when and if it gives oral or written
notice to the U.S. Receiving Agent and the Mexican Receiving Agent of its
acceptance of the tenders of such Securities. Payment for GDSs tendered in
certificated form and for Shares or CPOs tendered in book-entry form accepted
for payment pursuant to the U.S. Offer will be made by deposit of the purchase
price with the U.S. Receiving Agent or the Mexican Receiving Agent, as the case
may be, which will act as the holder's agent for the purpose of receiving
payments from Embotellador HM and transmitting such payments to such holder.
Payment for GDSs tendered by book-entry transfer will be made by crediting the
account of the nominee holding the GDSs on behalf of the beneficial holder of
such GDSs with DTC. In all cases, payment for Securities accepted for payment
pursuant to the U.S. Offer will be made only after timely receipt by the U.S.
Receiving Agent or the Mexican Receiving Agent, as the case may be, of all the
documents required to effect a tender, duly signed and executed by the holder or
its nominee.

         Embotellador HM may extend the U.S. Offer when it is required to do so
under applicable laws and regulations. For example, if Embotellador HM decreases
the percentage of Securities being sought or decreases the consideration to be
paid for Securities pursuant to the U.S. Offer, assuming it has received the
consent of Mr. Molina and PepsiCo to such amendments under the Molina Agreement
to Tender and the PepsiCo Agreement to Tender, and the U.S. Offer is scheduled
to expire at any time before the expiration of a period of ten U.S. business
days from, and including, the date that notice of such increase or decrease is
first published, sent or given in the manner specified below, the U.S. Offer
will be extended until the expiration of such period of ten U.S. business days.
Embotellador HM currently does not intend to decrease the percentage of, or
increase or decrease the consideration to be paid for, Securities to be
purchased in the U.S. Offer. If Embotellador HM makes a material change in the
terms of the U.S. Offer (other than a change in price or percentage of
securities sought) or in the information concerning the U.S. Offer, or waive a
material condition of the U.S. Offer, it will extend the U.S. Offer, if required
by applicable law, for a period sufficient to allow security holders to consider
the amended terms of the U.S. Offer.

         In addition, under the Molina Agreement to Tender and the PepsiCo
Agreement to Tender, if on or prior to the initial expiration date the
conditions to the Offers are satisfied, Embotellador HM may extend the
expiration date of the Offers for a period of not more than five business days
after such initial expiration date, solely to increase the number of Securities
to be tendered in the Offers. If, on the other hand, the conditions to the
Offers are not satisfied or waived by Embotellador HM on or prior to the initial
expiration date, it is required to extend the Offers until all such conditions
have been satisfied or waived, but not more than ten business days after the
initial expiration date. In the event that the conditions to the Offers are
still not satisfied or waived by Embotellador HM, it has the right, at its sole
discretion, to terminate the Offers after such ten business days extension has
expired or to further extend the Offers for an additional ten business days.
Under the Molina Agreement to Tender and the PepsiCo Agreement to Tender, an


                                       4

extension of the Offers for any other reason or under any other circumstances
requires the consent of Mr. Molina and PepsiCo, respectively, unless such
extension is required by applicable laws and regulations.

         Embotellador HM may amend the U.S. Offer at any time in its sole
discretion to increase the price it is offering to pay for the Securities.
Embotellador HM may also reduce the purchase price it is offering by the amount
of all dividends for which a payment date is announced or published on or prior
to the expiration date and which is payable after the date of the U.S. Offer and
prior to purchase of any Securities in the Offers, if any. Except as set forth
in this and the preceding paragraph, under the Molina Agreement to Tender and
the PepsiCo Agreement to Tender Embotellador HM may not reduce the price it is
offering to pay or the number of Securities sought in the Offers or otherwise
materially amend the Offers in any manner materially adverse to Mr. Molina or
PepsiCo, without the consent of Mr. Molina or PepsiCo, respectively.

         Embotellador HM will announce any extension, amendment or termination
by giving oral or written notice of such extension or amendment to the U.S.
Receiving Agent and the Mexican Receiving Agent and followed as promptly as
practicable by public announcement thereof. During any extension, all Securities
previously tendered in the U.S. Offer and not withdrawn will remain subject to
the U.S. Offer, subject to the rights of a tendering holder to withdraw its
Securities in accordance with the terms of the U.S. Offer to Purchase.

         A holder can withdraw tendered Securities at any time until the U.S.
Offer has expired and, if Embotellador HM has not by December 6, 2002 agreed to
accept such holder's Securities for payment, the holder can withdraw them at any
time after such time until Embotellador HM accepts such Securities for payment.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the U.S. Receiving
Agent or the Mexican Receiving Agent, as the case may be and must specify the
name of the person who tendered the Securities to be withdrawn, the number of
Securities to be withdrawn and the name of the registered holder of the
Securities, if different from that of the person who tendered such Securities.
If the Securities to be withdrawn have been delivered to either of the receiving
agents for the U.S. Offer, a signed notice of withdrawal must be submitted prior
to the acceptance of such Securities for payment by Embotellador HM, together
with, in the case of withdrawals of GDSs (except in the case of GDSs tendered by
an eligible guarantor institution), signatures guaranteed by an eligible
guarantor institution. In addition, such notice must specify, in the case of
GDSs tendered by delivery of GDRs, the name of the registered holder (if
different from that of the tendering security holder) and the serial numbers
shown on the particular GDRs evidencing the GDSs to be withdrawn or, in the case
of Securities tendered by book-entry transfer, the name and participant number
at DTC or Indeval to be credited with the withdrawn Securities. Withdrawals may
not be rescinded, and Securities withdrawn will thereafter be deemed not validly
tendered for purposes of the U.S. Offer. However, withdrawn Securities may be
re-tendered by again following one of the procedures described in the U.S. Offer
to Purchase, as applicable, at any time prior to the expiration date. The
withdrawal rights in the Mexican Offer are similar to the withdrawal rights in
the U.S. Offer.

         Gemex has allowed Embotellador HM to use its security position listings
for the purpose of disseminating the U.S. Offer to holders of the Securities.
The U.S. Offer to Purchase and the related GDS Letter of Transmittal have been
mailed to record holders of the Securities that may be tendered in the U.S.
Offer. Also, these materials are being furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on Gemex's security
position listing or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of such Securities.

         THE U.S. OFFER TO PURCHASE AND THE RELATED GDS LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE U.S. OFFER.

         Any inquiries a holder may have with respect to the U.S. Offer and
requests for additional copies of the U.S. Offer to Purchase or the GDS Letter
of Transmittal should be addressed to Morrow & Co., Inc., the Information Agent
for the U.S. Offer, at its address and telephone numbers set forth below. A
holder


                                       5

may also contact its broker, dealer, bank, trust company or other nominee for
assistance concerning the U.S. Offer.

                  The Information Agent for the U.S. Offer is:

                               MORROW & CO., INC.
                           445 Park Avenue, 5th Floor
                            New York, New York 10022
                                 (212) 754-8000

              U.S. SECURITY HOLDERS CALL TOLL FREE: (800) 607-0088
              SECURITY HOLDERS OUTSIDE THE U.S. PLEASE CALL COLLECT
                         EMAIL: TENDER.INFO@MORROWCO.COM


                 The U.S. Receiving Agent for the U.S. Offer is:

                              THE BANK OF NEW YORK

              By Mail:                                     By Hand or
                                                       Overnight Courier
        The Bank of New York
    Tender & Exchange Department                      The Bank of New York
           P.O. Box 11248                         Tender & Exchange Department
        Church Street Station                          101 Barclay Street
    New York, New York 10286-1248                  Receive and Deliver Window
                                                          Street Level
                                                    New York, New York 10286





                 The U.S. Dealer Manager for the U.S. Offer is:

                              SALOMON SMITH BARNEY
                              388 Greenwich Street
                            New York, New York 10013


                                       6

EX-99.A.8

                                                                  Exhibit (a)(8)

PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES


         INDEX


                                                                           PAGE

INDEPENDENT AUDITORS' REPORT                                                F-2

CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2000 AND 2001,
   AND EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001:

         Consolidated Balance Sheets                                        F-3

         Consolidated Statements of Income                                  F-4

         Consolidated Statements of Changes in Shareholders' Equity         F-6

         Consolidated Statements of Changes in Financial Position           F-7

         Notes to Consolidated Financial Statements                         F-9

CONSOLIDATED FINANCIAL STATEMENTS SUPPLEMENTAL SCHEDULE:

         Schedule II - Valuation and qualifying accounts                    F-53



                                      F-1

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders of
   Pepsi-Gemex, S. A. de C. V.:


We have audited the accompanying consolidated balance sheets of Pepsi-Gemex, S.
A. de C. V. and subsidiaries (the "Company") as of December 31, 2000 and 2001,
and the related consolidated statements of income, changes in shareholders'
equity, changes in financial position and supplemental schedule for each of the
three years in the period ended December 31, 2001, all expressed in thousands of
Mexican pesos of purchasing power of December 31, 2001. These consolidated
financial statements and supplemental schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in Mexico and the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement and that they are prepared in
accordance with accounting principles generally accepted in Mexico. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and supplemental schedule. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Pepsi-Gemex, S. A. de C. V. and subsidiaries as of December 31, 2000 and 2001,
and the consolidated results of their operations, changes in their shareholders'
equity and changes in their financial position for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in Mexico. Also, in our opinion, the financial statement
schedule when considered in relation to the consolidated financial statements
presents fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, beginning
January 1, 2000, the Company changed its method of accounting for income tax,
tax on assets and employee statutory profit-sharing to conform with the new
Bulletin D-4 "Accounting Treatment of Income Tax, Tax on Assets and Employee
Statutory Profit-Sharing".

The accompanying financial statements have been translated into English for the
convenience of readers. Our audits also comprehended the translation of Mexican
peso amounts into U.S. dollar amounts as of and for the year ended December 31,
2001 and, in our opinion, such translation has been made in conformity with the
basis stated in Note 1. Such U.S. dollar amounts are presented solely for the
convenience of users.

Accounting principles generally accepted in Mexico vary in certain respects from
accounting principles generally accepted in the United States of America. The
application of the latter would have affected the determination of net income
for each of the three years in the period ended December 31, 2001 and the
determination of shareholders' equity at December 31, 1999, 2000 and 2001 to the
extent summarized in Note 18.



/s/Deloitte & Touche

Deloitte & Touche
Mexico City, Mexico
February 26, 2002
(June 21, 2002 as to Notes 8, 14, 16 and 18)

                                       F-2


PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Thousands of Mexican Pesos of Purchasing Power of December 31, 2001)
- --------------------------------------------------------------------------------



                                                                                                   THOUSANDS OF
                                                                                                   U.S. DOLLARS
                                                                                                   (CONVENIENCE
                                                                                                   TRANSLATION)
                                                                          DECEMBER 31,              DECEMBER 31,
ASSETS                                                               2000              2001             2001
                                                                                          
CURRENT ASSETS:
    Cash and cash equivalents                                Ps.      226,775   Ps.       99,176   $       10,827
    Accounts receivable - net (Note 2)                              1,014,047            980,760          107,070
    Inventories (Note 3)                                            1,056,934            735,859           80,334
    Prepaid expenses                                                   38,195             20,653            2,255
                                                             ----------------   ----------------   --------------
           Total current assets                                     2,335,951          1,836,448          200,486

PROPERTY, PLANT AND EQUIPMENT - Net (Note 4)                        7,262,447          7,125,890          777,936

EXCESS OF COST OVER FAIR VALUE OF NET
   ASSETS ACQUIRED - Net of accumulated
   amortization of Ps.481,830, Ps.571,941
   and $62,439 at December 31, 2000 and 2001,
   respectively                                                     1,268,339          1,292,137          141,063

OTHER ASSETS (Note 5)                                                 421,343            324,570           35,433
                                                             ----------------   ----------------   --------------
TOTAL ASSETS                                                 Ps.   11,288,080   Ps.   10,579,045   $    1,154,918
                                                             ================   ================   ==============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Notes payable (Note 6)                                   Ps.      879,754   Ps.      346,964   $       37,878
    Current portion of long-term debt (Note 7)                         36,803             29,946            3,269
    Trade accounts payable                                            587,862            562,137           61,369
    Taxes payable                                                     142,821            234,764           25,629
    Accrued expenses and other liabilities                            408,129            456,310           49,816
    Dividend payable                                                       --            246,931           26,958
    Due to affiliates                                                   3,529                 --               --
                                                             ----------------   ----------------   --------------
       Total current liabilities                                    2,058,898          1,877,052          204,919

LONG-TERM DEBT AND OTHER NON-CURRENT
   LIABILITIES (Notes 7 and 8)                                      3,334,101          3,136,474           342,410

DEFERRED INCOME TAX AND EMPLOYEE
   STATUTORY PROFIT-SHARING (Note 12)                                 928,189            899,157           98,161
                                                             ----------------   ----------------   --------------
       Total liabilities                                            6,321,188          5,912,683          645,490
                                                             ----------------   ----------------   --------------

COMMITMENTS AND CONTINGENCIES (Note 14)

SHAREHOLDERS' EQUITY (Note 9):
    Capital share                                                     878,219            878,933           95,953
    Additional paid-in capital                                      4,798,696          4,551,834          496,925
    Retained earnings                                               1,897,569          2,492,757          272,135
    Reserves                                                        1,045,969          1,065,014          116,268
    Cumulative effect of deferred income tax and
       employee statutory profit-sharing (Note 1)                  (1,300,190)        (1,300,190)        (141,942)
    Shareholders' equity adjustment from labor
       obligations upon retirement                                         --            (43,403)          (4,738)
    Deficiency in restated shareholders' equity                    (2,353,371)        (2,978,583)        (325,173)
                                                             ----------------   ----------------   --------------
       Total shareholders' equity                                   4,966,892          4,666,362          509,428
                                                             ----------------   ----------------   --------------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               Ps.   11,288,080   Ps.   10,579,045   $    1,154,918
                                                             ================   ================   ==============


See accompanying notes to consolidated financial statements.


                                       F-3

PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Mexican Pesos of Purchasing Power of December 31, 2001, except per
share information)
- --------------------------------------------------------------------------------



                                                                                                                       THOUSANDS OF
                                                                                                                       U.S. DOLLARS
                                                                                                                       EXCEPT EARN-
                                                                                                                      INGS PER SHARE
                                                                                                                       (CONVENIENCE
                                                                                                                       TRANSLATION)
                                                                                                                        YEAR ENDED
                                                                       YEAR ENDED DECEMBER 31,                          DECEMBER 31,
                                                         1999                   2000                  2001                  2001
                                                                                                           
REVENUES:
    Net sales                                        Ps. 8,140,444         Ps. 9,572,760         Ps. 11,036,212         $ 1,204,827
    Other                                                   49,011                87,652                 56,997               6,222
                                                     -------------         -------------         --------------         -----------
                                                         8,189,455             9,660,412             11,093,209           1,211,049
                                                     -------------         -------------         --------------         -----------

COSTS AND EXPENSES (Note 11):
    Cost of sales (exclusive of depreciation and
       amortization shown separately below)              3,644,016             4,256,900              4,898,743             534,797
    Selling expenses (includes amortization of
       bottles and cases for Ps.139,535,
       Ps.165,275, Ps.121,836 and $13,301
       respectively)                                     2,832,203             3,487,790              3,969,210             433,320
    General and administrative expenses                    460,423               566,103                651,262              71,098
    Depreciation and amortization                          308,459               308,890                403,090              44,005
                                                     -------------         -------------         --------------         -----------
                                                         7,245,101             8,619,683              9,922,305           1,083,220
                                                     -------------         -------------         --------------         -----------

OPERATING INCOME                                           944,354             1,040,729              1,170,904             127,829
                                                     -------------         -------------         --------------         -----------

RESTRUCTURING CHARGE (Note 1)                                   --               568,980                136,866              14,942

INTEGRAL (INCOME) COST OF FINANCING (Note 6):
    Interest income                                        (74,454)              (14,897)                (5,981)               (653)
    Interest expense                                       425,718               404,303                399,655              43,630
    Foreign exchange loss (gain) - net                    (137,306)               71,295               (217,594)            (23,755)
    Monetary position gain                                (348,083)             (426,608)              (158,625)            (17,317)
                                                     -------------         -------------         --------------         -----------
                                                          (134,125)               34,093                 17,455               1,905
                                                     -------------         -------------         --------------         -----------

OTHER EXPENSE - Net (includes the amortization
   of excess of cost over fair value of net
   assets acquired for Ps.78,014, Ps.(4,156),
   Ps.90,111 and $9,837 respectively)                      103,448                31,513                197,396              21,550
                                                     -------------         -------------         --------------         -----------

INCOME BEFORE PROVISIONS AND EXTRAORDINARY ITEM            975,031               406,143                819,187              89,432
                                                     -------------         -------------         --------------         -----------

PROVISIONS (BENEFIT) (Note 12):
    Income tax and tax on assets                           338,228              (174,419)               228,846              24,985
    Employee statutory profit-sharing                        3,415                64,971                 (4,847)               (529)
                                                     -------------         -------------         --------------         -----------
                                                           341,643              (109,448)               223,999              24,456
                                                     -------------         -------------         --------------         -----------
INCOME BEFORE EXTRAORDINARY GAIN                           633,388               515,591                595,188              64,976

EXTRAORDINARY GAIN (Note 12):
    Benefit from utilization of tax loss
       carryforwards and tax on assets paid in
       prior years                                         257,983                    --                     --                  --
                                                     -------------         -------------         --------------         -----------
CONSOLIDATED NET INCOME                              Ps.   891,371         Ps.   515,591         Ps.    595,188         $    64,976
                                                     =============         =============         ==============         ===========



                                                                     (Continued)


                                       F-4



                                                                                                          THOUSANDS OF
                                                                                                          U.S. DOLLARS
                                                                                                          EXCEPT EARN-
                                                                                                          INGS PER SHARE
                                                                                                          (CONVENIENCE
                                                                                                          TRANSLATION)
                                                                                                           YEAR ENDED
                                                                  YEAR ENDED DECEMBER 31,                  DECEMBER 31,
                                                        1999               2000             2001               2001
                                                                                              
Net income of majority interest                  Ps.     822,845    Ps.     482,522    Ps.     595,188    $       64,976
Net income of minority interest                           68,526             33,069                 --                --
                                                 ---------------    ---------------    ---------------    --------------

CONSOLIDATED NET INCOME                          Ps.     891,371    Ps.     515,591    Ps.     595,188    $       64,976
                                                 ===============    ===============    ===============    ==============

Earnings per Series B and L share                Ps.        0.61    Ps.        0.34    Ps.        0.36    $         0.04
                                                 ===============    ===============    ===============    ==============
Weighted average Series B and L shares
   outstanding (in 000's)                              1,020,783          1,011,445          1,129,065
                                                 =============      ===============    ===============

Earnings per Series D share                      Ps.        0.87    Ps.        0.50    Ps.        0.52    $         0.06
                                                 ===============    ===============    ===============    ==============

Weighted average Series D shares
   outstanding (in 000's)                                322,281            336,219            375,318
                                                 ===============    ===============    ===============

Earnings per CPO                                 Ps.        2.07    Ps.        1.19    Ps.        1.23    $         0.13
                                                 ===============    ===============    ===============    ==============

Weighted average CPO's outstanding
   (in 000's)                                            322,281            336,219            375,318
                                                 ===============    ===============    ===============

Earnings per GDS                                 Ps.       12.40    Ps.        7.12    Ps.        7.36    $         0.80
                                                 ===============    ===============    ===============    ==============

Weighted average GDS's outstanding
   (in 000's)                                             53,730             56,037             62,553
                                                 ===============    ===============    ===============




                                                                     (Concluded)



See accompanying notes to consolidated financial statements.


                                       F-5

PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Note 9)
 (Thousands of Mexican Pesos of Purchasing Power of December 31, 2001)
  ------------------------------------------------------------------------------



                                                                                                           CUMULATIVE
                                                                                                             EFFECT
                                                                                                           OF DEFERRED
                                                                                                           INCOME TAX
                                                            ADDITIONAL                                    AND EMPLOYEE
                                                CAPITAL      PAID-IN         RETAINED                       STATUTORY
                                                 STOCK       CAPITAL         EARNINGS        RESERVES     PROFITSHARING
                                                                                          
BALANCE, JANUARY 1, 1999                    Ps. 861,981   Ps. 4,414,863   Ps.   607,077   Ps. 1,034,273  Ps.         --
Repurchase and sale of capital share - net       (2,446)            393         (14,875)          5,756              --
Net comprehensive income                             --              --         822,845              --              --
                                            -----------   -------------   -------------   -------------  --- ----------
BALANCE, DECEMBER 31, 1999                      859,535       4,415,256       1,415,047       1,040,029              --
Repurchase and sale of capital share - net          223           1,357              --           5,940              --
Acquisition of subsidiaries (Note 1)                 --              --              --              --              --
Capital share increase                            1,942          40,320              --              --              --
Acquisition of minority interest (Note 1)        16,519         341,763              --              --              --
Net comprehensive loss                               --              --         482,522              --      (1,300,190)
                                            -----------   -------------   -------------   -------------  --- ----------
BALANCE, DECEMBER 31, 2000                      878,219       4,798,696       1,897,569       1,045,969      (1,300,190)
Repurchase and sale of capital share - net          714              69              --          19,045              --
Dividends declared                                   --        (246,931)             --              --              --
Net comprehensive loss                               --              --         595,188              --              --
                                            -----------   -------------   -------------   -------------  --- ----------

BALANCE, DECEMBER 31, 2001                  Ps. 878,933   Ps. 4,551,834   Ps. 2,492,757   Ps. 1,065,014  Ps. (1,300,190)
                                            ===========   =============   =============   =============  ==============




                                              SHAREHOLDERS'
                                                 EQUITY
                                               ADJUSTMENT
                                               FROM LABOR       DEFICIENCY-
                                               OBLIGATIONS      IN RESTATED     MINORITY         TOTAL
                                                  UPON         SHAREHOLDERS'  SHAREHOLDERS'   SHAREHOLDERS'
                                               RETIREMENT          EQUITY        EQUITY          EQUITY
                                                                                 
BALANCE, JANUARY 1, 1999                      Ps.      --    Ps. (1,635,679)  Ps.       --   Ps.  5,282,515
Repurchase and sale of capital share - net             --                --             --          (11,172)
Net comprehensive income                               --          (517,565)       229,349          534,629
                                              -----------    --------------   ------------   --------------
BALANCE, DECEMBER 31, 1999                             --        (2,153,244)       229,349        5,805,972
Repurchase and sale of capital share - net             --                --             --            7,520
Acquisition of subsidiaries (Note 1)                   --                --        117,172          117,172
Capital share increase                                 --                --             --           42,262
Acquisition of minority interest (Note 1)              --                --       (358,282)              --
Net comprehensive loss                                 --          (200,127)        11,761       (1,006,034)
                                              -----------    --------------   ------------   --------------
BALANCE, DECEMBER 31, 2000                             --        (2,353,371)            --        4,966,892
Repurchase and sale of capital share - net             --                --             --           19,828
Dividends declared                                     --                --             --         (246,931)
Net comprehensive loss                            (43,403)         (625,212)            --          (73,427)
                                              -----------    --------------   ------------   --------------

BALANCE, DECEMBER 31, 2001                    Ps. (43,403)   Ps. (2,978,583)  Ps.       --   Ps.  4,666,362
                                              ===========    ==============   ============   ==============


See accompanying notes to consolidated financial statements


                                       F-6

PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Thousands of Mexican Pesos of Purchasing Power of December 31, 2001)
- --------------------------------------------------------------------------------



                                                                                                                       THOUSANDS OF
                                                                                                                       U.S. DOLLARS
                                                                                                                       (CONVENIENCE
                                                                                                                       TRANSLATION)
                                                                                                                        YEAR ENDED
                                                                           YEAR ENDED DECEMBER 31,                     DECEMBER 31,
                                                                1999                 2000                2001              2001
                                                                                                           
OPERATING ACTIVITIES:
    Income before extraordinary gain                      Ps.   633,388      Ps.    515,591        Ps.  595,188        Ps. 64,976
    Items that did not require (generate) resources:
       Depreciation and amortization                            526,008             470,009             615,036            67,144
       Statutory seniority premiums                              10,545              32,367              38,293             4,180
       Restructuring charge                                          --             547,056              83,505             9,116
       Equity in earnings of associated companies
          (included in other income-net)                         (1,274)                 --                  --                --
       Deferred taxes                                                --            (288,874)            (29,032)           (3,169)
                                                          -------------      --------------        ------------        ----------
                                                              1,168,667           1,276,149           1,302,990           142,247
    Changes in current assets and liabilities, net
       of effects from purchases of businesses:
       Accounts receivable - net                               (296,204)            (20,834)             33,287             3,634
       Inventories                                              106,677            (197,370)            321,075            35,052
       Prepaid expenses                                          (1,330)             (2,843)             17,542             1,915
       Trade accounts payable                                   130,137             (21,201)            (25,725)           (2,808)
       Taxes payable, accrued expenses and other
          liabilities                                          (142,842)            (69,954)            136,595            14,912
                                                          -------------      --------------        ------------        ----------
           Resources provided by operating
              activities before extraordinary
              gain                                              965,105             963,947           1,785,764           194,952
    Extraordinary gain                                          257,983                  --                  --
                                                          -------------      --------------        ------------        ----------
           Net resources provided by operating
              activities                                      1,223,088             963,947           1,785,764           194,952
                                                          -------------      --------------        ------------        ----------

FINANCING ACTIVITIES:
    Net change in notes payable                                (103,075)           (329,497)           (532,790)          (58,165)
    Increase in long-term debt                                  216,132           1,558,352              64,138             7,002
    Payments of long-term debt                                 (583,752)           (472,467)           (330,573)          (36,089)
    Capital stock increase                                           --              42,262                  --                --
    (Repurchase) and sale of capital stock - net                (11,172)              7,520              19,828             2,165
    Shareholders' equity adjustment from labor
       obligations upon retirement                                   --                  --             (43,403)           (4,738)
    Dividends declared                                               --                  --            (246,931)          (26,958)
    Dividends payable                                                --                  --             246,931            26,958
    Shares issued in exchange of minority interest                   --             358,282                  --                --
    Cumulative effect of deferred income tax and
       employee statutory profit-sharing:
         Increase in liabilities                                     --           1,300,190                  --                --
         Decrease in shareholders' equity                            --          (1,300,190)                 --                --
                                                          -------------      --------------        ------------        ----------
           Net resources (used in) generated by
              financing activities                             (481,867)          1,164,452            (822,800)          (89,825)
                                                          -------------      --------------        ------------        ----------


                                                                     (Continued)


                                       F-7



                                                                                                           THOUSANDS OF
                                                                                                           U.S. DOLLARS
                                                                                                           (CONVENIENCE
                                                                                                           TRANSLATION)
                                                                                                            YEAR ENDED
                                                                  YEAR ENDED DECEMBER 31,                  DECEMBER 31,
                                                       1999               2000               2001              2001
                                                                                               
INVESTING ACTIVITIES:
    Acquisition and sale of property, plant
       and equipment - net                            (975,604)        (1,031,819)        (1,089,243)         (118,913)
    Increase in other assets                           (30,039)            (1,506)           112,589            12,291
    Increase in goodwill                                    --                 --           (113,909)          (12,435)
    Payment for acquisition of subsidiaries,
       net of cash received                                 --           (700,942)                --                --
    Acquisition of minority interest                        --           (358,282)                --                --
    Loan to associated company                              --             (1,591)                --                --
                                                 -------------     --------------     --------------        ----------
       Resources used in investing
             activities                             (1,005,643)        (2,094,140)        (1,090,563)         (119,057)
                                                 -------------     --------------     --------------        ----------
    (Decrease) increase in cash and cash
       equivalents                                    (264,422)            34,259           (127,599)          (13,930)

CASH FOR CONSOLIDATING EFFECTS                          51,087                 --                 --                --

CASH AND CASH EQUIVALENTS:
    Beginning of year                                  405,851            192,516            226,775            24,757
                                                 -------------     --------------     --------------        ----------

    End of year                                  Ps.   192,516     Ps.   226,775      Ps.     99,176        $   10,827
                                                 =============     ==============     ==============        ==========



                                                                     (Concluded)


See accompanying notes to consolidated financial statements.


                                       F-8

PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001
(Thousands of Mexican Pesos of Purchasing Power of December 31, 2001, except per
share information)
- --------------------------------------------------------------------------------

1.    OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES

      OPERATIONS - Pepsi-Gemex, S. A. de C. V. ("Pepsi-Gemex") and its
      subsidiaries (collectively, the "Company") produce and sell bottled soft
      drinks, mineral water and purified water under the trade names of
      Pepsi-Cola, Pepsi Light, Pepsi Max, Pepsi Limon, Mirinda, Seven-Up, Diet
      Seven-Up, Kas, Mountain Dew, Power Punch and Manzanita Sol (collectively
      the "Pepsi Products") and Garci-Crespo, San Lorenzo, Tehuacan Bajas
      Calorias, Atlantis and Electropura (the "Mineral and Purified Water
      Products") and others. The Company also produces and sells non-returnable
      plastic bottles and packaging materials used by the Company and third
      parties. Pepsi Products sales are principally made to retailers located in
      the Mexico City area, including the Federal District, the state of Hidalgo
      and portion of the state of Mexico (the "Mexico City Area"); the states of
      Guerrero, Morelos and portion of the state of Mexico, which are located in
      the Southwest portion of Mexico (the "Southwest Area"); the states of
      Campeche, Quintana Roo and Yucatan in the southeast portion of Mexico (the
      "Southeast Area"); the central states of Aguascalientes, Durango,
      Zacatecas, San Luis Potosi, and portions of the states of Guanajuato,
      Queretaro and Jalisco (the "North Central Area") and the states of Nuevo
      Leon, Coahuila, Tamaulipas, and portions of Chihuahua and Veracruz in the
      northeast of Mexico (the "Northeast Area"). The Company sells and
      distributes the mineral water products nationally, including through third
      party distributors not affiliated with the Company. In addition, the
      Company sells its full line of purified water products in each of its
      principal franchise territories and also sells the five-gallon jug
      presentation in the city of Puebla and surrounding areas. Pursuant to
      franchise and license agreements, the Company has the exclusive right to
      produce, sell and distribute a variety of soft drink products in all or a
      portion of the Pepsi Products franchised territories.

      Effective September 1, 2000, the Company commenced consolidating the
      financial position and results of operations of Embotelladores del Valle
      de Anahuac, S.A. de C.V. and subsidiaries ("Emvasa"), see Comparability
      below.

      BASIS OF PRESENTATION -

            CONSOLIDATION OF FINANCIAL STATEMENTS - The accompanying
            consolidated financial statements, which include the accounts of
            Pepsi-Gemex and its subsidiaries, have been prepared in accordance
            with accounting principles generally accepted in Mexico ("Mexican
            GAAP"). All material intercompany balances and transactions have
            been eliminated. Certain reclassifications have been made to prior
            period financial statements to conform to classifications adopted in
            2001.

            TRANSLATION OF FINANCIAL STATEMENTS - The accompanying financial
            statements are stated in Mexican pesos, the currency of the country
            in which Pepsi-Gemex and its subsidiaries are incorporated and
            operate. Translation of Mexican peso amounts into U.S. dollar
            amounts are included solely for the convenience of readers and have
            been made at the rate of Ps.9.16 per U.S.$1.00, the interbank
            exchange rate reported to the Company by Centro de Analisis y
            Proyecciones Economicas para Mexico at December 31, 2001. Such
            translation should not be construed as a representation that the
            Mexican peso amounts shown could be converted into U.S. dollars at
            the above or any other rate.

            Principal consolidated subsidiaries as of December 31, 2000 and
            2001, are as follows:


                                       F-9



                                  Subsidiary                                                 Location
           -------------------------------------------------------------------     -----------------------------
                                                                                
           Embotelladora Metropolitana, S. A. de C. V.                             Mexico, D. F.
           Embotelladores Internacionales de Mexico, S. de R. L. de C. V.          Mexico, D. F.
           Embotelladores del Valle de Anahuac, S. A. de C. V. (3)                 Mexico, D. F.
           Bebidas Purificadas del Noreste, S. A. de C. V.                         Mexico, D. F.
           Tenedora del Noreste, S. A. de C. V. (1)                                Monterrey, N.L.
           Grupo Embotellador del Noreste, S. A. de C. V. (1)                      Mexico, D. F.
           Purificadora de Agua Los Reyes, S. A. de C. V.                          Tlalnepantla, Edo. de Mexico.
           Embotelladora Agral Regiomontana, S. A. de C. V. (1) and (13)           Monterrey, N.L.
           Industria de Refrescos del Noreste, S. A. de C. V. (1)                  Monterrey, N.L.
           Embotelladora de Refrescos Mexicanos, S. A. de C. V. (3)                Izcalli, Edo. de Mexico
           Distribuidora de Aguas, Refrescos y Bebidas Purificadas, S.A. de
              C. V. (3) and (4)                                                    Izcalli, Edo. de Mexico
           Bebidas Purificadas de Acapulco, S. A. de C. V. (9)                     Acapulco, Gro.
           Embotelladores del Bajio, S. A. de C. V (3)                             Leon, Guanajuato
           Embotelladora Moderna, S. A. de C. V. (3)                               Toluca, Edo. de Mexico
           Embotelladora Potosi, S. A. de C. V.                                    San Luis Potosi, S. L. P.
           Bebidas Purificadas del Sureste, S. A. de C. V.                         Merida, Yuc.
           Bebidas Purificadas de Quintana Roo, S. A. de C. V. (2)                 Cancun, Q. Roo
           Bebidas Purificadas de Zacatecas, S. A. de C. V. (10)                   Zacatecas, Zac.
           Industria de Refrescos, S. A. de C. V.                                  Cuernavaca, Mor.
           Refrescos de Iguala, S. A. de C. V. (9)                                 Iguala, Gro.
           Embotelladora San Marcos, S. A. de C. V. (6)                            Aguascalientes, Ags.
           Embotelladora La Isleta, S. A. de C. V. (3)                             Tampico, Tamaulipas
           Embotelladora Campechana, S. A. de C. V. (2)                            Campeche, Camp.
           Embotelladora Garci-Crespo, S. A. de C. V.                              Tehuacan, Pue.
           Distribuidora Garci-Crespo, S. A. de C. V.                              Tlalnepantla, Edo. de Mexico
           Bebidas Veracruzanas, S. A. de C. V. (3) and (5)                        Poza Rica, Veracruz
           Embotelladora Agral de la Laguna, S. A. de C. V. (1) and (13)           Durango, Dgo
           Bebidas Purificadas de Durango, S. A. de C. V. (7)                      Durango, Dgo.
           Industrias de Refrescos de Gomez Palacios, S. A. de C. V. (1) and
              (12)                                                                 Durango, Dgo.
           Procesos Plasticos, S. A. de C. V.                                      Tultitlan, Edo. de Mexico
           Equipo para Embotelladoras y Cervecerias, S. A. de C. V.                Mexico, D. F.
           Bienes Raices Metropolitanos, S. A. de C. V.                            Mexico, D. F.
           Distribuidora de Aguas Envasadas Dek, S. A. de C. V. (8)                Mexico, D. F.
           Servicios Administrativos Suma, S. A. de C. V.                          Mexico, D. F.
           Comercio Integral Mexicano, S. A. de C. V. (11)                         Mexico, D. F.
           Duingras Holdings B.V.                                                  The Netherlands


           As of December 31, 2000 and 2001, all of the subsidiaries are 100%
           owned by the Company.

- ----------
(1)   As of December 31, 1999, the Company owned 50% of these companies (see
      Comparability below) and were consolidated pursuant to an agreement
      entered into with PepsiCo. because the Company exercised effective control
      of them.

(2)   During the third quarter of 2000 these companies were merged into Bebidas
      Purificadas del Sureste, S. A. de C. V.

(3)   These companies were acquired in a business combination pursuant to a cash
      tender offer made during the third quarter of 2000 (see Comparability
      below).

(4)   On December 31, 2000 this company was merged into Embotelladora de
      Refrescos Mexicanos, S. A. de C. V.

(5)   On December 31, 2000 this company was merged into Embotelladora La Isleta,
      S. A. de C. V.

(6)   On December 31, 2000 this company was merged into Embotelladora Potosi, S.
      A. de C. V.

(7)   On March 31, 2001 this company was merged into Industria de Refrescos
      Gomez Palacios, S.A. de C.V.

(8)   On May 31, 2001 this company was merged into Bienes Raices Metropolitanos,
      S.A. de C.V.

(9)   On November 30,2001 these companies were merged into Industria de
      Refrescos, S.A. de C.V.

(10)  On November 30, 2001 this company was merged into Embotelladora Potosi,
      S.A. de C.V.


                                      F-10

(11)  On November 30, 2001 this company was merged into Bienes Raices
      Metropolitanos, S.A. de C.V.

(12)  On December 31, 2001 this company was merged into Industria de Refrescos
      del Noreste, S.A. de C.V.

(13)  On December 31, 2001 these companies were merged into Grupo Embotellador
      del Noreste, S.A. de C.V.


            EFFECTS OF INFLATION IN THE FINANCIAL STATEMENTS - The accompanying
            consolidated financial statements have been prepared in accordance
            with Bulletin B-10 "Recognition of the Effects of Inflation in
            Financial Information", and its amendments, issued by the Mexican
            Institute of Public Accountants, A. C. ("MIPA"). These documents
            require the restatement of all financial statements to constant
            Mexican pesos as of the date of the most recent balance sheet
            presented for the purpose of comparability. Factors derived from the
            National Consumer Price Index ("NCPI"), published by Banco de
            Mexico, are applied to restate the consolidated financial statement
            data to constant Mexican pesos.

            The accompanying consolidated financial statements have been
            restated and adjusted as follows:

            1.    The consolidated balance sheet at December 31, 2000, has been
                  restated to reflect constant Mexican pesos of purchasing power
                  of December 31, 2001, by applying the NCPI factor for 2000.

            2.    The consolidated statements of operations for all periods
                  presented have been restated to reflect constant pesos of
                  purchasing power of December 31, 2001, by applying the
                  respective NCPI factor of the period when the transactions
                  occurred (revenues and expenses).

            3.    The consolidated statements of changes in financial position
                  set forth the source and application of resources representing
                  the differences between opening and closing balance sheet
                  balances in constant Mexican pesos of purchasing power of
                  December 31, 2001, excluding the effects from holding
                  nonmonetary assets. Exchange gains and losses and monetary
                  position gains and losses are included in the amount of
                  resources provided by or applied to operations.

            4.    Capital stock, paid-in capital, retained earnings, reserves
                  and cumulative effect of deferred income tax and employee
                  statutory profit-sharing have been restated by applying the
                  NCPI factor from the date contributed or generated.

            5.    Deficiency in restated shareholders' equity primarily results
                  from the increase in the restated values of nonmonetary assets
                  below the increase in inflation as measured by the NCPI.

            6.    Monetary position gain represents the effects of inflation on
                  the Company's net monetary liability position as measured
                  using the NCPI.

            7.    The NCPI factors applied for each period are as follows:



                                                         RATE OF
                         YEAR ENDED                   INFLATION FOR       NCPI
                        DECEMBER 31,                   THE PERIOD        FACTOR
                                                                   
                            1999                         12.31%          1.1375
                            2000                          8.96%          1.0440
                            2001                          4.40%          1.0000


            COMPREHENSIVE INCOME - In August 2000 the MIPA issued Bulletin B-4,
            "Comprehensive Income" ("B-4"), the application of which is
            mandatory for the year beginning January 1, 2001. In accordance with
            the regulations of B-4, the statement of changes in shareholders'
            equity for the year ended December 31, 2000 and 1999 were restated
            to present comprehensive income in comparative form with respect to
            2001 (see Note 9).

      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Company's accounting
      policies are in accordance with accounting principles generally accepted
      in Mexico and are summarized as follows:

      COMPARABILITY - The following are the most significant transactions
      affecting the comparability of the financial statements:


                                      F-11

            ACQUISITION OF SUBSIDIARIES AND MINORITY INTEREST - In July 1997,
            Pepsi-Gemex and Pepsi-Cola Mexicana, S. A. de C. V. ("PCM") formed
            Tenedora del Noreste, S. A. de C. V. ("Tenedora") with each holding
            a 50% equity interest. Tenedora contemporaneously acquired certain
            companies that have the exclusive rights to produce, sell and
            distribute Pepsi-Cola bottled soft drinks in the northeast part of
            Mexico, including the cities of Monterrey, Nuevo Leon and Gomez
            Palacio, Durango (Tenedora and its subsidiaries are also identified
            as the "Northeast Bottling Group"). The cash purchase price of these
            acquired companies was Ps.58,323. At the time of acquisition these
            companies were in bankruptcy and liability payments were legally
            suspended. The excess of cost over fair value of net assets acquired
            was Ps.393,965. At the end of 1998 Tenedora purchased all the
            liabilities of the acquired companies which were in bankruptcy or
            suspension of payments as above mentioned. Effective January 1,
            1999, the Company commenced consolidating Tenedora as a result of an
            amendment to the joint venture agreement (entered into with PepsiCo)
            governing the financial and operating policies with respect to the
            Northeast Bottling Group and the agreement entered into by Tenedora
            with its creditors and the expected resolution of its bankruptcy
            proceedings. At December 31, 2000 and 2001, all assets and
            liabilities of Tenedora are included in the consolidated balance
            sheets of the Company. The consolidated statements of income for
            each of the three years in the period ended December 31, 2001
            include the operations of Tenedora in each individual line item.

            On December 19, 2001 the Court of the City of Monterrey, Nuevo Leon,
            where the proceedings were held, declared the final adjudication of
            the bankruptcy and suspension of payments of the companies that are
            subsidiaries of Tenedora.

            On September 6, 2000, the Company acquired through Embotelladores
            Internacionales de Mexico, S. de R. L. de C. V. and Duingras Holding
            B. V., 96.9% of the outstanding shares of Embotelladores del Valle
            de Anahuac, S. A. de C. V. and subsidiaries ("Emvasa"), through a
            cash tender offer. Subsequently, during the first quarter of 2001,
            Pepsi-Gemex acquired an additional 3.0% of the outstanding shares of
            Emvasa. For the remaining 0.1% that has not been acquired,
            Pepsi-Gemex has recorded a reserve equivalent to the purchase price
            set forth in the public tender offer for each of the shares,
            pursuant to the terms of the agreement entered into by Pepsi-Gemex
            and the National Banking and Securities Commission to cancel the
            register of Emvasa as an issuer of securities before the Mexican
            Stock Exchange. Emvasa has the exclusive rights to produce, sell and
            distribute PepsiCola bottled soft drinks in most of the state of
            Mexico, the north portion of the states of San Luis Potosi, Hidalgo
            and Veracruz, the states of Tamaulipas and Queretaro, the south part
            of the state of Guanajuato and the northeast portion of the state of
            Jalisco. The cash purchase price of these acquired companies was
            Ps.782,559, which includes the 3.0% acquired during the first
            quarter of 2001 and the reserve for the acquisition of shares not
            yet being owned. The excess of cost over fair value of net assets
            acquired was Ps.315,249. Also, on September 6, 2000, the Company
            acquired 2.87% of the shares outstanding of certain subsidiaries of
            Emvasa, which represented the shares owned by the former principal
            shareholder and his immediate family. The cash purchase price of
            these shares was Ps.9,348. The excess of fair value of net assets
            over cost of shares acquired of Ps.22,794, is included in the
            Ps.315,249 amount above. Condensed consolidated audited financial
            information as of the date of the acquisition, expressed in Mexican
            pesos of purchasing power of December 31, 2001, is as follows:



                                                                   AUGUST 31,
                                                                     2000
                                                            
            BALANCE SHEET:
            Current assets                                     Ps.      261,772
            Fixed assets and other assets                               910,486
            Current liabilities                                        (298,022)
            Long-term liabilities                                      (280,405)
            Minority shareholders' equity                              (117,172)
                                                               ----------------
            Majority shareholders' equity                      Ps.      476,659
                                                               ================



                                      F-12








                                                                 EIGHT MONTHS
                                                                     ENDED
                                                                  AUGUST 31,
                                                                     2000
                                                           
           STATEMENT OF INCOME:
           Revenues                                           Ps.    1,269,502
           Costs and expenses                                       (1,200,684)
           Other income (expense) - net                               (650,252)
           Taxes                                                       234,705
                                                              ----------------
           Net loss of majority interest                      Ps.     (346,729)
                                                              ================


           On December 14, 2000, the Company acquired from PCM, through Bebidas
           Purificadas del Noreste, S. A. de C. V. and Emvasa, the minority
           interest owned by PCM in Tenedora and Embotelladores Mexicanos de
           Pepsi-Cola, S. A. de C. V. ("Empecsa") in exchange for 47,470,002 of
           each of Series B, D and L shares of the Company. Such shares were
           contributed to a trust in order to deliver to PCM such shares in the
           form of CPO's. The above transaction has been accounted for as a
           purchase. The difference between the book value of the minority
           interest acquired and the market value of the shares issued has been
           accounted for as negative goodwill or excess of cost over fair value
           of net assets acquired. Such negative goodwill related to the
           acquisition of the minority interest in Tenedora has been recognized
           as other income because management considered that such subsidiary
           has been fully integrated into the operations of the Company. The
           excess of cost over fair value of net assets acquired will be
           amortized over a period not to exceed twenty years.

           During the second half of 2001, management of the Company, together
           with its legal and tax counsel, re-evaluated the sufficiency of the
           reserves recorded to cover probable tax contingencies identified
           during the acquisition process of Emvasa (see Note 14). Also,
           management of the Company re-evaluated the sufficiency of the
           reserves recorded to cover severance payments to the personnel and
           cost and expenses related to the sale of the real estate where the
           corporate offices of Emvasa were located. The above gave rise to an
           increase in the reserves of approximately Ps.99,000. Such increase
           has been accounted for as a prospective modification of the goodwill
           originally recognized.

           RESTRUCTURING OF OPERATIONS - During December of 2000, management of
           the Company initiated a restructuring program of the operations in
           certain of its territories. Such program's main objectives were: (i)
           to streamline the Company's operation as a result of the recent
           acquisition of Emvasa; (ii) to phase out plastic returnable bottles
           ("PRB") in most of the territories (including those incorporated with
           the acquisition of Emvasa); (iii) to continue with the commitment to
           increase polyethylene tereftalate ("PET") packaging in the sales mix;
           (iv) to increase utilized capacity at some of the plants and (v) to
           reduce personnel at the Company in activities that are redundant due
           to the acquisition of Emvasa. In order to accomplish the objectives
           mentioned above, the Company closed four plants in the first quarter
           of 2001, which are located in Mexico City and the states of Morelos,
           Veracruz and San Luis Potosi. Production of such plants was shifted
           to other locations. Also, the Company wrote-off the recorded value of
           all the plastic returnable bottles, except those needed during the
           phase-out period, together with their corresponding cases in all of
           its territories other than the city of Toluca in the state of Mexico.
           In addition, the Company identified machinery and equipment available
           for sale due to duplication of facilities arising from the
           acquisition of Emvasa and performed an analysis of impairment of
           fixed assets in all of the facilities. The restructuring charge
           includes Ps.547,056, net of salvage value, for the write down of
           assets included in property, plant and equipment as well as the write
           down of assets related to the bottling of the Company's products
           using PRB packaging. Estimated salvage values are based on estimates
           of the proceeds upon sale of certain of the affected assets. As of
           December 31, 2000, the effect of the restructuring amounts to
           Ps.568,980 (Ps.422,820, net of its corresponding tax effects).

           Continuing with the restructuring program that started during 2000,
           throughout the year 2001, certain operations were consolidated
           through the merger of certain of the subsidiaries (see Operations at
           the beginning of this Note), the continued closing of plants, the
           phase out of PRB bottles in the city of Toluca and the identification
           of additional fixed assets to be sold. An additional restructuring
           charge of Ps.136,866 (Ps,88,963, net of its corresponding tax
           effects) as a result of these efforts was recorded during the year
           ended December 31, 2001.



                                      F-13




           The restructuring charges have been determined based on formal plans
           approved by the Company's management using the best information
           available at the time. The amounts the Company may ultimately incur
           could change as the Company integrates the acquisition of Emvasa and
           finishes the closure of facilities.

      CASH AND CASH EQUIVALENTS - The Company considers all highly-liquid
      temporary investments with original maturities of three months or less to
      be cash equivalents. Cash and cash equivalents consist primarily of bank
      deposits which are stated at cost plus accrued interest.

      INVENTORIES AND COST OF SALES - Inventories are valued at the lower of
      cost or market value. Inventories of raw materials, work in process and
      finished products are valued at average cost, which because of high
      inventory turnover approximates replacement value, or market value.
      Packaging, other materials and spare parts are recorded at acquisition
      cost and are restated by applying a factor derived from the NCPI. Cost of
      sales is stated at estimated replacement cost at the time of sale.

      PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are
      initially recorded at acquisition cost and are restated by applying a
      price index for their country of origin. For fixed assets of foreign
      origin, restated acquisition cost expressed in the currency of the country
      of origin is converted into Mexican pesos at the market exchange rate in
      effect at the balance sheet date. In accordance with the Fifth Document of
      Amendments to Bulletin B-10 (Modified), the acquisition costs used to
      restate fixed assets acquired up to December 31, 1996, were those reported
      at that date based on net replacement values determined by expert
      appraisers.

      Returnable cases and bottles, introduced to the market free of charge, are
      amortized over their estimated useful life of four years. Cases and
      bottles representing working stock in the bottling plants are restated by
      applying the NCPI factor. Breakage during production and distribution are
      charged to operations of the year.

      Depreciation is computed using the straight-line method, based on the
      remaining useful lives of the assets, as follows:



                                                     2000                  2001
                                                           (AVERAGE YEARS)
                                                                     
      Buildings                                       35                    33
      Leasehold improvements                          22                    20
      Machinery and equipment                         20                    21
      Furniture and fixtures                          10                     8
      Vehicles                                         7                     9
      Bottles and cases                                4                     4
      Refrigerated display cases                       5                     5


      Net integral cost of financing related to borrowings specifically obtained
      for the construction and installation of property, plant and equipment are
      capitalized as part of the cost of these assets. In the absence of
      borrowings obtained specifically for the construction or installation of
      property, plant and equipment, net financing costs are capitalized as part
      of the cost of these assets based on the weighted average financing cost
      rate of all debt outstanding during the construction or installation
      period. Net integral cost of financing capitalized is restated using the
      NCPI. The Company did not capitalize any financing costs during the years
      ended December 31, 1999, 2000 and 2001. Unamortized capitalized financing
      costs at December 31, 2000 and 2001, were Ps.191,971 and Ps. 171,764,
      respectively.

      INVESTMENTS IN ASSOCIATED COMPANIES - Investments in associated companies
      in which the Company has an ownership interest between 10% and 50%, but
      does not have effective control, are accounted for using the equity method
      and are included in other assets.

      EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED - Excess of cost
      over fair value of net assets acquired is amortized using the
      straight-line method over 20 years and is restated using the NCPI. In
      accordance with practices followed by companies listed on the Mexican
      Stock Exchange, beginning in 2001, management of the




                                      F-14





      Company began to include as part of other income and expense in the
      accompanying statements of income the amortization of the excess of cost
      over fair value of net assets acquired, which was previously reported as
      an operating cost. Accordingly, the consolidated statements of income of
      prior years have been reclassified in order to be consistent with the
      presentation utilized in 2001.

      LABOR OBLIGATIONS - Severance payments are charged to operations when
      incurred. Statutory seniority premiums are determined on the basis of
      independent actuarial calculations using the projected unit credit method
      and are recognized over estimated employees' years of service.
      Unrecognized prior service cost is amortized over the expected remaining
      service period of employees, which is 18 years.

      OPERATIONS IN FOREIGN CURRENCY - Foreign currency operations are recorded
      at the exchange rate applicable at the transaction date. Monetary assets
      and liabilities denominated in foreign currency are translated into
      Mexican pesos at the applicable exchange rate at the balance sheet date.
      Exchange fluctuations are recorded in results of operations, except those
      amounts capitalized as a component of construction cost.

      USE OF ESTIMATES - The preparation of financial statements in accordance
      with accounting principles generally accepted in Mexico requires
      management to make estimates and assumptions which affect the amounts
      reported in the financial statements and the accompanying notes. Although
      these estimates are based on management's best knowledge of current
      events, actual results may differ.

      INCOME TAX, TAX ON ASSETS AND EMPLOYEE STATUTORY PROFIT-SHARING - The
      provisions for income tax ("IT") and employee statutory profit-sharing
      ("ESPS") are recorded in results of the year in which they are incurred.
      Deferred income tax assets and liabilities are recognized for temporary
      differences resulting from comparing the book and tax values of assets and
      liabilities plus any future benefits from tax loss carryforwards. Deferred
      ESPS is recognized for temporary differences resulting from comparing the
      book and tax values of assets and liabilities, only when it can be
      reasonably assumed that they will generate a liability or benefit, and
      there is no indication that this liability will not be paid or benefit
      will not be realized.

      Tax on assets paid that is expected to be recoverable is recorded as an
      advance payment of income tax and is presented with deferred income taxes.

      As of January 1, 2000, the Company implemented Bulletin D-4, "Accounting
      Treatment of Income Tax, Tax on Assets and Employee Statutory
      Profit-sharing" ("D-4"). The initial cumulative effect at that time was
      Ps.1,300,190, which is included in the accompanying financial statements
      in shareholders' equity.

      REVENUE RECOGNITION - Sales are recorded at the time risks and rewards
      related to the inventories are transferred to customers, which generally
      occurs when products are shipped by the Company to their customers for
      delivery in satisfaction of orders.

      CARRYING VALUE OF LONG-TERM ASSETS - The Company evaluates the carrying
      value of long-term assets based upon current and anticipated discounted
      cash flows, and recognizes an impairment when such estimated cash flows
      will be less than the carrying value of the asset. Measurement of the
      amount of impairment, if any, is based upon the difference between the
      carrying value and the fair value.

      EARNINGS PER SHARE, PER CPO AND PER GDS - Earnings per Series B and L
      share is computed by dividing consolidated net income of majority
      interest, after reducing it for earnings attributable to preferred shares
      (Series D), by the weighted average number of Series B and L shares
      outstanding during each period. Earnings per Series D share is computed by
      dividing consolidated net income attributable to Series D share (up to the
      tenth anniversary, as defined in the Company's bylaws, the greater of 5%
      of the stated value of Series D shares ("fixed preference") or 145% of
      earnings attributable to each Series B and L shares ("premium
      preference"); after the tenth anniversary the greater of the fixed
      preference or the per share earnings available to Series B, D or L shares
      after paying to the Series B and L shareholders an amount equal to the
      fixed preference) by the weighted average number of Series D shares
      outstanding during each period.




                                      F-15





2.    ACCOUNTS RECEIVABLE



                                                                                      2000               2001
                                                                                             
      Trade                                                                     Ps.      686,075   Ps.    596,339
      Less allowance for doubtful accounts                                               (67,070)        (106,828)
                                                                                ----------------   --------------
                                                                                         619,005          489,511
      Due from Pepsi-Cola Mexicana, S. A. de C. V. (1)                                    82,650           25,502
      Due from affiliates                                                                 47,560           65,924
      Recoverable taxes                                                                  172,131          311,267
      Other                                                                               92,701           88,556
                                                                                ----------------   --------------
                                                                                Ps.    1,014,047   Ps.    980,760
                                                                                ================   ==============


- ----------
(1)   A subsidiary of PepsiCo, a shareholder of Pepsi-Gemex.


3.    INVENTORIES



                                                                                      2000               2001
                                                                                             
      Finished products                                                         Ps.      185,119   Ps.    158,069
      Raw materials (1)                                                                  725,741          453,251
      Packaging materials and spare parts                                                 98,031           69,959
      Other                                                                               48,043           54,580
                                                                                ----------------   --------------
                                                                                Ps.    1,056,934   Ps.    735,859
                                                                                ================   ==============


- ----------
(1)   Includes advances to affiliated companies, that are either wholly-owned or
      controlled by the Company's largest shareholder, at December 31, 2000 of
      Ps.510,231 (See note 11).


4.    PROPERTY, PLANT AND EQUIPMENT



                                                                                      2000               2001
                                                                                             
      Land                                                                      Ps.      996,541   Ps.    952,893
      Buildings                                                                        1,923,318        1,951,279
      Leasehold improvements                                                             178,947          309,863
      Machinery and equipment                                                          3,280,655        2,960,062
      Furniture and fixtures                                                             201,134          260,712
      Vehicles                                                                         2,140,777        2,241,825
      Bottles and cases                                                                  461,617          433,026
      Refrigerated display cases                                                         915,561          941,901
                                                                                ----------------   --------------
                                                                                      10,098,550       10,051,561
      Less accumulated depreciation                                                    3,425,529        3,646,503
                                                                                ----------------   --------------
                                                                                       6,673,021        6,405,058
      Machinery and equipment available for sale (see Note 1)                            292,320          314,225
      Construction in progress                                                           297,106          406,607
                                                                                ----------------   --------------
                                                                                Ps.    7,262,447   Ps.  7,125,890
                                                                                ================   ==============


5.    OTHER ASSETS



                                                                                      2000               2001
                                                                                             
      Investments in associated companies                                       Ps.       62,003   Ps.     62,485
      Intangible assets from labor obligations upon retirement                            39,844           60,795
      Other                                                                              319,496          201,290
                                                                                ----------------   --------------
                                                                                Ps.      421,343   Ps.    324,570
                                                                                ================   ==============





                                      F-16





6.    NOTES PAYABLE



                                                                                    2000                 2001
                                                                                               
      U.S. dollar-denominated:

         Unsecured lines of credit with Mexican banks at variable interest rates
         (8.34% and 3.46% weighted average interest rate at December
         31, 2000 and 2001, respectively)                                       Ps.  499,339         Ps. 139,984

         Unsecured loans from a foreign bank, bearing interest at a rate
         equivalent to LIBOR plus 150 and 165 basis points, respectively, (7.90%
         and 3.53% weighted average interest rate at December 31, 2000
         and 2001, respectively).                                                    100,746             141,980

      Mexican peso-denominated:

         Unsecured line of credit with a Mexican Bank, at an interest rate
         of 8.50% at December 31 2001.                                                    --              65,000

         Unsecured loans with a Mexican bank payable at the equivalent of
         Mexican pesos of the investment units borrowed ("UDIS", an investment
         unit adjusted for inflation in Mexico) bearing interest at a variable
         rate (9.69% weighted average interest rate at December 31, 2000).
                                                                                     279,669                  --
                                                                                ------------         -----------
                                                                                Ps.  879,754         Ps. 346,964
                                                                                ============         ===========


      The Company also has available line of credit arrangements with an
      aggregate borrowing capacity of Ps.366,400. However there can be no
      assurance that the Company will have available sources of borrowings at
      the maturity dates of existing debt.


7.    LONG-TERM DEBT AND OTHER NON-CURRENT LIABILITIES



                                                                                         2000               2001
                                                                                                 
      U.S. dollar-denominated:

         U.S. $160 million guaranteed senior notes due 2004                        Ps. 1,611,936       Ps. 1,465,600

         U.S. $150 million guaranteed syndicated loan due 2003                         1,511,190           1,374,000

         Loans from foreign banks for acquisition of machinery and equipment at
         a variable interest rate of LIBOR plus 130 basis points (7.44% and
         6.26% at December 31, 2000 and 2001, respectively) with maturities from
         2003 to 2007, collateralized by assets with a net book value of
         Ps.112,178 and Ps.102,963 at December 31, 2000 and 2001, respectively            93,394             126,308

         Loan from Mexican bank for the acquisition of vehicles at a variable
         interest rate of LIBOR plus 368 basis points (9.72% and 5.56% at
         December 31, 2000 and 2001, respectively), maturing in 2006                      14,308              10,531

         Other loans from foreign banks for acquisition of machinery and
         equipment at 6.0% fixed interest rate, collateralized by assets with
         a net book value of Ps.7,881 at December 31, 2000                                12,046                  --
                                                                                   -------------       -------------





                                      F-17





                                                                                                 
                                                                                       3,242,874           2,976,439
         Less current portion of long-term debt                                           36,803              29,946
                                                                                   -------------       -------------
         Long-term debt                                                                3,206,071           2,946,493
         Statutory seniority premium (Note 8)                                            128,030             189,981
         Long-term debt and other non-current liabilities
                                                                                   Ps. 3,334,101       Ps. 3,136,474
                                                                                   =============       =============



      a.    Annual maturities of long-term debt at December 31, 2001, are as
            follows:



                  YEAR                                              AMOUNT
                                                           
                  2003                                        Ps.   1,403,946
                  2004                                              1,491,478
                  2005                                                 25,878
                  2006                                                 18,015
                  2007                                                  7,176
                                                              ---------------
                                                              Ps.   2,946,493
                                                              ===============


      b.    On April 4, 1997, Pepsi-Gemex issued U.S.$160 million of 9.75%
            guaranteed senior notes (the "Guaranteed Notes") maturing in March
            2004. Interest on the Guaranteed Notes is payable semiannually on
            March 30 and September 30 of each year. The Guaranteed Notes are
            guaranteed by all of Pepsi-Gemex's subsidiaries (the "Guarantors")
            except Bebidas Purificadas del Noreste, S. A. de C. V. and its
            subsidiaries through which the Company owns Tenedora and the
            Northeast Bottling Group. The Guaranteed Notes contain limitations
            that could restrict the payment of dividends and other payments, as
            well as restrict the ability of the Company to incur additional
            indebtedness, incur liens, issue loan guarantees, and sell fixed
            assets and investments in shares of subsidiaries if certain
            financial tests are not met.

      c.    On September 1, 2000, Pepsi-Gemex entered into a syndicated loan
            agreement for an aggregate amount of U.S.$150 million (the
            "Syndicated Loan") maturing on February 28, 2002, which proceeds
            were used to pay for the purchase of Emvasa and to refinance
            existing indebtedness. Interest on the Syndicated Loan is payable
            utilizing a LIBOR rate, at the election of the Company,
            corresponding to periods ranging from one week and up to six months
            plus 175 basis points. Interest is payable at the end of the LIBOR
            interest period chosen by Pepsi-Gemex, or in the case of a six-month
            interest period, at three-month intervals. The Syndicated Loan is
            guaranteed by all of Pepsi-Gemex's material subsidiaries, as defined
            in the agreement (the "Subsidiary Guarantors"). The Company has the
            right to prepay the loans in whole or in part. The Syndicated Loan
            contains limitations that could restrict the payment of dividends
            and other payments, as well as restrict the ability of the Company
            to incur additional indebtedness, incur liens, issue loan
            guarantees, wind up, liquidate, merge or dissolve, sell fixed assets
            or make investments in shares of subsidiaries if certain financial
            tests are not met.

      d.    On December 21, 2001, Pepsi-Gemex renewed the syndicated loan
            agreement for an aggregate amount of U.S. $150 million (the "Renewed
            Syndicated Loan") maturing on December 21, 2003. Interest on the
            Renewed Syndicated Loan is payable utilizing a LIBOR rate, at the
            election of the company, corresponding to periods ranging from one
            week and up to six months plus 162.5 basis points. Interest is
            payable at the end of the LIBOR interest period chosen by
            Pepsi-Gemex, or in the case of a six-month interest period, at
            three-month intervals. The Company has the right to prepay the loans
            in whole or in part. The limitations on certain operations agreed to
            in the initial Syndicated Loan were not modified. The Renewed
            Syndicated Loan has been irrevocably and unconditionally guaranteed
            by the following subsidiaries: Embotelladora Metropolitana, S. A. de
            C. V., Purificadora de Agua Los Reyes, S. A. de C. V., Industria de
            Refrescos del Noreste, S. A. de C. V. y Bebidas Purificadas del
            Sureste, S. A. de C. V. Additionally, the agreement establishes that
            any subsidiary representing more than 5% of annual consolidated
            revenues must guarantee the Renewed Syndicated Loan.

      Management believes the Company was in compliance with the covenants of
      its loan agreements at December 31, 2001. Also, under the most restrictive
      of the above limitations, Ps.1,099,620 was available at December 31, 2001
      to pay dividends.




                                      F-18




8.    STATUTORY SENIORITY PREMIUMS AND PENSION PLAN

      At December 31, 2000 and 2001, the liability for seniority premiums,
      included in long-term debt and other noncurrent liabilities, is Ps.128,030
      and Ps.189,981, respectively. Net periodic cost was Ps.10,545, Ps.32,367
      and Ps.38,293, for the years ended December 31, 1999, 2000 and 2001,
      respectively. Since other disclosures required by Mexican GAAP are not
      material to the consolidated financial statements, they are not included
      herein.

      During 2001, the Compensation Committee of the Company approved the
      adoption of a pension plan for certain of its executives; this pension
      plan was then ratified by the Board of Directors. The pension plan
      provides for defined benefits, in excess of those granted by the Mexican
      Social Security Institute, to the retirees or their beneficiaries. The
      employees are eligible for benefits if they meet certain age and years of
      service with the Company and are given credit for years of service prior
      to adoption of the pension plan. Pursuant to the bylaws of the pension
      plan, the pension plan will become effective January 1, 2002, subject to
      the filing of a notice of adoption and approval by the Ministry of Finance
      and Public Credit of the deductibility for income tax purposes of cash
      contributions to be made to the trust fund set up to manage pension plan
      Assets. The notice before the Ministry of Finance and Public Credit was
      filed on April 23, 2002.


9.    SHAREHOLDERS' EQUITY

      a.    At December 31, 2000 and 2001 majority shareholders' equity at
            historical and restated values consists of the following:



                                                                                       2000
                                                                  HISTORICAL          RESTATED              TOTAL
                                                                                             
            Capital stock                                       Ps.    166,761     Ps.    711,458     Ps.    878,219
            Additional paid-in capital                               2,064,240          2,734,456          4,798,696
            Retained earnings and reserves                           1,061,512          1,882,026          2,943,538
            Cumulative effect of deferred income tax and
               employee statutory profit-sharing                    (1,142,981)          (157,209)        (1,300,190)
            Deficiency in restated shareholders' equity                     --         (2,353,371)        (2,353,371)
                                                                --------------     --------------     --------------
                                                                Ps.  2,149,532     Ps.  2,817,360     Ps.  4,966,892
                                                                ==============     ==============     ==============




                                                                                       2001
                                                                  HISTORICAL          RESTATED              TOTAL
                                                                                             
            Capital stock                                       Ps.    167,510     Ps.    711,423     Ps.    878,933
            Additional paid-in capital                               1,817,240          2,734,594          4,551,834
            Retained earnings and reserves                           1,675,794          1,811,977          3,557,771
            Cumulative effect of deferred income tax and
               employee statutory profit-sharing                    (1,142,981)          (157,209)        (1,300,190)
            Adjustment to shareholders' equity from labor
               obligations upon retirement                             (43,403)                --            (43,403)
            Deficiency in restated shareholders' equity                     --         (2,978,583)        (2,978,583)
                                                                --------------     --------------     --------------
                                                                Ps.  2,474,160     Ps.  2,192,202     Ps.  4,666,362
                                                                ==============     ==============     ==============



            At December 31, 2000 and 2001 the number of shares of capital stock
            consists of the following:



                                                                            2000
            SERIES                               B                   D                   L                TOTAL
                                                                                        
            Authorized                       804,969,954         410,337,945         410,337,945      1,625,645,844
            Unissued                         (18,950,264)        (18,950,264)        (18,950,264)       (56,850,792)
                                         ---------------     ---------------    ----------------    ---------------
            Total shares issued              786,019,690         391,387,681         391,387,681      1,568,795,052
                                         ===============     ===============    ================    ===============





                                      F-19




                                                                                        
            CPO's issued                     391,387,681         391,387,681         391,387,681      1,174,163,043
            Series B issued                  394,632,009            -                   -               394,632,009
            Repurchased shares               (29,990,673)        (18,818,673)        (18,818,673)       (67,628,019)
                                         ---------------     ---------------    ----------------    ---------------
            Total outstanding shares         756,029,017         372,569,008         372,569,008      1,501,167,033
                                         ===============     ===============    ================    ===============





                                                                            2001
            SERIES                               B                   D                   L                TOTAL
                                                                                        
            Authorized                       794,342,786         399,710,777         399,710,777      1,593,764,340
            Unissued                          (8,323,096)         (8,323,096)         (8,323,096)       (24,969,288)
                                         ---------------     ---------------    ----------------    ---------------
            Total shares issued              786,019,690         391,387,681         391,387,681      1,568,795,052
                                         ===============     ===============    ================    ===============

            CPO's issued                     391,387,681         391,387,681         391,387,681      1,174,163,043
            Series B issued                  394,632,009            -                   -               394,632,009
            Repurchased shares               (27,848,673)        (16,676,673)        (16,676,673)       (61,202,019)
                                         ---------------     ---------------    ----------------    ---------------
            Total outstanding shares         758,171,017         374,711,008         374,711,008      1,507,593,033
                                         ===============     ===============    ================    ===============


      1.    Series B shares (common, ordinary voting stock) must represent a
            minimum of 50% plus one share of the Company's total outstanding
            capital stock and may never be less than the sum of the outstanding
            Series D and Series L shares. Series B shares may be acquired by
            Mexican and foreign citizens and by Mexican and foreign enterprises
            under the terms provided for in Mexican foreign investment
            legislation.

      2.    Series D shares (limited voting cumulative preferred stock) may not
            represent more than 25% less one voting share of the Company's
            outstanding capital stock. Series D shares may be acquired by
            Mexican and foreign citizens and by Mexican and foreign enterprises.

      3.    Series L shares (limited voting stock) may not represent more than
            25% of the Company's outstanding capital stock and can be acquired
            by Mexican and foreign citizens and by Mexican and foreign
            enterprises.

      The CPO's are certificates of ordinary participation. Each CPO represents
      one Series B share, one Series D share and one Series L share.

      Under Pepsi-Gemex bylaws and Mexican law, our annual net earnings,
      according to our annual financial statements, are applied as follows:

      -     First, an amount equivalent to at least 5% of net earnings is
            segregated to build a legal reserve until such reserve is equal to
            20% of our capital stock. Pepsi-Gemex commenced accumulation of this
            reserve in 1992 by applying 5% of our net earnings for the year
            ended December 31, 1991. As of December 31, 2001, Ps.175.4 million
            remained to be allocated to this reserve.

      -     Second, the holders of B Shares may allocate a percentage of net
            profits determined at the annual meeting of shareholders to any
            special reserve, including a reserve for open-market purchases of
            our outstanding shares of capital stock. From 1992 through 2001, our
            shareholders approved a reserve in the total amount of Ps.870.0
            million (nominal).

      -     Third, net profits are allocated as determined by the holders of B
            Shares and may be distributed as dividends, subject to the
            restrictions referred to above and to the following rights and
            preferences:

            -     During the ten-year term following the date of issuance of the
                  D Shares, the holders of the D Shares are entitled to the
                  following rights, in accordance with Article 113 of the
                  General Law of Commercial Corporations:

                  -     Dividends to the holders of the B and L Shares cannot be
                        paid unless the holders of the D Shares have previously
                        received a dividend of Ps.0.00555555555 per share per
                        annum (the "minimum cumulative dividend"), equivalent to
                        five percent of the nominal value of the D Shares, or
                        Ps.0.11111111111 per share. If dividends are not paid in
                        any fiscal year, or if they



                                      F-20





                        are less than the mentioned amount, such dividend or the
                        unpaid balance must be accumulated and shall be paid
                        with the preference described herein.

                  -     Once the minimum cumulative dividend is paid to the
                        holders of the D Shares, the shareholders may declare
                        the payment of additional dividends on a pro rata basis,
                        however, the holders of the D Shares shall have the
                        right to receive a dividend in the amount of the
                        dividend paid to holders of the B and L Shares,
                        multiplied by 145% (deducting, for purposes of
                        determining such dividend, the amount that corresponds
                        to the minimum cumulative dividend).

            -     At the end of the ten-year term, the holders of the shares
                  will have the following rights:

                  A.    holders of D Shares will be entitled to receive any
                        unpaid portion of the minimum cumulative dividend;

                  B.    once the minimum cumulative dividend has been paid to
                        the holders of the D Shares, the shareholders may
                        declare the payment of additional dividends, in which
                        case the holders of the B and L Shares will receive the
                        same amount that the holders of the D Shares received as
                        a minimum cumulative dividend up to the amount such that
                        all shareholders will have received the same amount once
                        those dividends are paid; and

                  C.    once the dividends referred to in clause B above are
                        paid, the shareholders may declare additional dividends
                        on a pro rata basis.

            In the event of liquidation of Pepsi-Gemex, holders of Series D
            shares will be entitled to a liquidation preference (the
            "Liquidation Preference") equal to (i) the accrued but unpaid
            Minimum Cumulative Dividend and (ii) 5% of the stated value of
            Series D share. Following payment of the Liquidation Preference,
            holders of Series B and L shares will be entitled to receive, if
            available, an amount equal to the Liquidation Preference per Series
            D share. Following payment in full at an amount equal to the
            Liquidation Preference per Series D share, Series B, Series L and
            Series D share will share equally, on a per share basis, in any
            remaining amounts payable.

      b.    In February 1999, Pepsi-Gemex adopted a revised executive stock
            ownership program that provides options to purchase its Series T
            Shares to its officers and employees. This program replaced the
            program that had previously been in place prior to 1996. Under the
            program, the officers and employees have the right to receive, based
            on their position in the company, the amount of T Shares specified
            in the program for that position, on a yearly basis, or in the case
            of the Chairman of the Board and the Chief Operating Officer, every
            two years. Only individuals who are currently employed by the
            Company can hold the T Shares. The program contemplates the grant of
            options after May 1 of each year. Under the program, the exercise
            price is determined by reference to the closing price of the CPOs on
            the Mexican Stock Exchange on the last trading day prior to May 1 of
            each year of the grant. The issuance of the options to be granted
            each year is subject to the final approval of the Compensation
            Committee of the Board of Directors ("Compensation Committee").

            Holders of T Shares will be entitled, for every three T Shares held,
            to receive dividends and distributions equal to those paid by
            Pepsi-Gemex in respect of one B Share, one L Share and one D Share.
            Additionally, holders of T Shares will be entitled to convert T
            Shares into B Shares, L Shares and D Shares at a rate of one B
            Share, one L Share and one D Share, that is, one CPO, for every
            three T Shares converted. The holder of the T Shares must request
            conversion into Series B, D and L shares and in turn, into CPOs
            within 180 days of the delivery of the T Shares, or within such
            other period as our Compensation Committee may determine. T Shares
            have no voting rights and do not constitute capital of Pepsi-Gemex.
            Pepsi-Gemex has authorized 25,500,000 T Shares which have been
            reserved for issuance under the revised option program of which
            530,712 have been converted into 176,904 B shares, 176904 D shares
            and 176,904 L shares.

            Activity for options of the T Shares during each of the years in the
            three-year period ended December 31, 2001, is as follows:




                                      F-21







                                                               1999          2000          2001
                                                                        (In thousands)
                                                                                 
            Outstanding at the beginning of the year          12,686        16,006        23,054

            Granted                                            3,320         7,048            --
            Exercised                                             --            --            --
            Forfeited                                             --            --            --
                                                              ------        ------        ------

            Outstanding at the end of the year                16,006        23,054        23,054
                                                              ======        ======        ======

            Weighted average remaining life (in years)          7.10          7.59          6.59
                                                              ======        ======        ======

            Exercisable at the end of the year                 4,963         6,382        12,686
                                                              ======        ======        ======

            Weighted average remaining life (in years)           6.3           5.5           5.4
                                                              ======        ======        ======



            Options granted during the years ended December 31, 1999 and 2000
            have an exercise price per T share of Ps.5.38 and Ps.2.65 (nominal
            pesos), respectively. The weighted average exercise price of options
            outstanding at December 31, 1999, 2000 and 2001 was Ps.5.23, Ps.4.44
            and Ps.4.44 (nominal pesos), respectively. The weighted average
            exercise price of options exercisable at December 31, 2001 was
            Ps.5.19 (nominal pesos), respectively.

      c.    At the Shareholders' Ordinary and Extraordinary General Meetings of
            April 27, 2000, the following resolutions were adopted: (i) to
            cancel 24,969,288 shares which were deposited in treasury; (ii) to
            increase capital share by 216,000,000 shares in the manner decided
            by the Board of Directors or the executive committee through the
            issuance of 72,000,000 of each of the Series B, D and L shares;
            (iii) to increase of the legal reserve in the amount of Ps.36,167.9
            (nominal) and; (iv) to rescind the previous authorization to issue
            Series B, D, and L shares, other than the 8,323,096 of each that
            were subject to conversion pursuant to the Revised Option Plan to
            the extent such shares are not issued and paid for before March 31,
            2001.

      d.    At the Shareholders' General Ordinary Meeting of April 30, 2001, the
            following resolutions were adopted: (i) to increase the legal
            reserve in the amount of Ps.24,693.05 (nominal); (ii) to record a
            special reserve of Ps.7.19 for the payment of the purchase price of
            the shares of Emvasa not yet owned by the Company and (iii) to
            maintain the reserve for the acquisition of Pepsi-Gemex own shares
            in the amount of Ps.870,000.

      e.    At the shareholders' General Ordinary Meeting of December 20, 2001,
            the application of Ps.246,930.5 from retained earnings to pay
            dividends within the first six months of 2002 as follows was
            approved: (i) payment to holders of Series D shares the amount of
            Ps.0.2203736309 for each of the 374,711,008 outstanding Series D
            shares, this amount includes the preferred dividend corresponding to
            each share; (ii) payment to holders of Series B shares the amount of
            Ps.0.145075187 for each of the 758,171,017 outstanding Series B
            shares; (iii) payment to holders of Series L shares the amount of
            Ps.0.145075187 for each of the 374,711,008 outstanding Series L
            Shares; (iv) holders of CPO's issued based on one Series B share,
            one Series D share and one Series L share, would receive
            Ps.0.510526682 for each of the CPO's, this amount includes preferred
            dividend of Series D shares as well as Series B and Series L shares
            dividend included in the own CPO's.

      f.    Reserves include a legal reserve and a reserve for the repurchase of
            capital stock. At December 31, 2001, the Company had repurchased
            61,202,019 shares that represented 3.90% of total shares issued. The
            repurchased shares have been deducted from capital stock
            outstanding. Reserves at December 31, 2001, include a legal reserve
            of Ps.175,351(nominal), which may not be used to pay dividends.
            Under Mexican law, this reserve must be increased by 5% of annual
            net income until it represents 20% of capital stock.

      g.    As of December 31, 2001, retained earnings and the deficiency in
            restated shareholders' equity include Ps.2,492,757 of retained
            earnings that have not been distributed by the subsidiaries and
            associates of the Company.




                                      F-22




      h.    Net comprehensive (loss) income presented in the accompanying
            consolidated statements of changes in shareholders' equity
            represents the Company's total activity during each year, and
            includes the net income of the year, plus other comprehensive items
            of the same period, which, in accordance with accounting principles
            generally accepted in Mexico, are presented directly in
            shareholders' equity without affecting the statement of income. In
            2000 and 2001, the other comprehensive (loss) income items consist
            of deficiency in restated shareholders' equity. Furthermore, in 2000
            and 2001 net comprehensive (loss) income includes the cumulative
            effect of deferred income tax and the adjustment to shareholders'
            equity from labor obligations upon retirement, respectively.

      i.    Shareholders' equity, except restated paid-in capital and tax
            retained earnings, will be subject to a 35% dividend tax, payable by
            the Company, in the event of distribution. Beginning January 1,
            2003, such rate will be reduced by one percentage point each year
            until reaching 32% in 2005. Any income tax paid on such distribution
            may be credited against future income tax payable by the Company in
            the three fiscal years following such payment.

            Tax balances of shareholders' equity accounts as of December 31,
            2001, are as follows:

                                                              
            Tax restated paid-in capital                         Ps.   5,416,516
            Consolidated tax retained earnings                           258,177
            Consolidated reinvested tax retained earnings                -
                                                                 ---------------
            Total                                                Ps.   5,674,693
                                                                 ===============



10.   FOREIGN CURRENCY BALANCES AND TRANSACTIONS

      a.    Monetary position in U.S. dollars at December 31, 2000 and 2001 is
            as follows:



                                                         2000                                  2001
                                           (THOUSANDS OF       MEXICAN PESO      (THOUSANDS OF      MEXICAN PESO
                                           U. S. DOLLARS)       EQUIVALENT        U.S. DOLLARS)      EQUIVALENT
                                                                                      
            Assets:
               Current                     $        1,075   Ps.         10,831   $        3,320   Ps.         30,411
                                           --------------   ------------------   --------------   ------------------
            Liabilities:
               Current                            (63,217)            (636,888)         (34,050)            (311,893)
               Long-term                         (318,227)          (3,206,012)        (321,669)          (2,946,493)
                                           --------------   ------------------   ---------------  -------------------
            Total liabilities                    (381,444)          (3,842,900)        (355,719)          (3,258,386)
                                           --------------   ------------------   --------------   ------------------

            Position-short                 $     (380,369)  Ps.     (3,832,069)  $     (352,399)  Ps.     (3,227,975)
                                           ==============   ==================   ==============   ==================


      b.    At December 31, 2001, the Company had machinery and equipment of
            foreign origin with an aggregate net book value as follows:



                                                 FOREIGN         MEXICAN PESO
                                                 CURRENCY         EQUIVALENT
                                                           
            U.S. dollars                           73,825        Ps. 676,237
            Canadian dollars                       32,423            197,681
            Deutsche marks                         35,697            147,955
            French francs                         327,917            405,262


      c.    Foreign currency denominated transactions were as follows:





                                      F-23






                                                        2000                                  2001
                                          (THOUSANDS OF      MEXICAN PESO       (THOUSANDS OF      MEXICAN PESO
                                          U. S. DOLLARS)      EQUIVALENT        U.S. DOLLARS)       EQUIVALENT
                                                                                       
            Interest expense                 $ 31,872         Ps. 321,096         $ 30,196         Ps. 292,410
            Interest income                        93                 934                3                  29
            Resin purchases                    61,830             611,544           71,410             664,625
            Fixed asset sales                   1,287              12,966               --                  --
            Fixed asset purchases               7,411              73,024           13,065             118,404
            Rent expense                       29,491             297,111           22,170             213,961


      d.    Exchange rates quoted at December 31, 2000 and 2001 and on February
            26, 2002 were. Ps.9.65, Ps.9.16 and Ps.9.08 (historical values) per
            U.S. $1.00, respectively


11.   TRANSACTIONS WITH RELATED PARTIES

            The Company engages in transactions with affiliated companies that
            are either wholly owned or controlled by the Company's largest
            shareholder or members of his family. In addition, the Company
            purchases concentrate from PCM, who together with its affiliates,
            constitutes the Company's second largest shareholder. According to
            the Company's bylaws, such transactions must be approved by a
            committee of the Board of Directors constituted specifically for the
            purpose of reviewing transactions between the Company and
            affiliates. The committee is responsible to determine that affiliate
            transactions are on terms comparable to terms at which unrelated
            parties would consummate such transactions.

            Transactions with related parties, carried out in the ordinary
            course of business, were as follows:



                                                              1999               2000                2001
                                                                                    
            Sugar purchases (1)                          Ps. 721,492      Ps.   798,160      Ps.   944,584
            Concentrate purchases                            883,515          1,052,217          1,230,220
            Administrative services expense                    7,317              6,100              4,704
            Purchase of fixed assets                          17,335            105,789             59,905



- ----------
(1)   In September 2001, the Federal Government expropriated the sugar mills
      owned by the principal shareholder of the Company, which was then a
      supplier to the Company, Beginning September 2001 the Company purchases
      this raw material from non-related parties.


12.   INCOME TAX, TAX ON ASSETS, EMPLOYEE STATUTORY PROFIT-SHARING AND
      SUBSEQUENT EVENT - 2002 TAX REFORM

      Pepsi-Gemex and its subsidiaries, with the exception of Emvasa and its
      subsidiaries, file consolidated income tax and tax on assets returns in
      the proportion in which Pepsi-Gemex owns the voting stock of its
      subsidiaries at the balance sheet date. Emvasa and its subsidiaries file a
      separate consolidated income tax and tax on assets returns in the
      proportion in which Emvasa owns the voting stock of its subsidiaries at
      the balance sheet date. Beginning January 1, 2002, the proportion will be
      calculated based on the daily average equity maintained by Pepsi-Gemex and
      Emvasa of its subsidiaries during the year, and the tax results of the
      subsidiaries are consolidated at 60% of such proportion. Prepayments of
      income tax and tax on assets of both the holding company and its
      subsidiaries are made as if the holding company did not file a
      consolidated tax return.

      a.    The provisions for income tax, tax on assets and employee statutory
            profit-sharing are as follows:




                                      F-24







                                                                           YEAR ENDED DECEMBER 31,
                                                                 1999                2000               2001
                                                                                          
         Income taxes:
           Current                                           Ps.    263,610     Ps.     73,018     Ps.    149,121
           Deferred                                                    (615)          (247,437)            79,725
         Tax on assets                                               75,233            -
                                                             --------------     --------------     --------------
                                                             Ps.    338,228     Ps.   (174,419)    Ps.    228,846
                                                             ==============     ==============     ==============




                                                                           YEAR ENDED DECEMBER 31,
                                                                 1999                2000               2001
                                                                                          
         Employee statutory profit-sharing:
           Current                                           Ps.      3,414     Ps.      6,097     Ps.      5,878
           Deferred                                                       1             58,874            (10,725)
                                                             --------------     --------------     --------------
                                                             Ps.      3,415     Ps.     64,971     Ps.     (4,847)
                                                             ==============     ==============     ==============


      b.    The Mexican income tax rate is 35%. Beginning January 1, 2003, such
            rate will be reduced by one percentage point each year until
            reaching 32% in 2005. Reconciliation of the statutory income tax
            rate and effective rate as a percentage of income before provisions
            for the year ended December 31, 2000 and 2001 is:

                                                                                              
               Statutory Tax Rate                                                     35.0%            35.0%

               Carryforward of tax losses for which no deferred tax
                  assets were previously recorded                                    (27.6%)             --
               Effect arising from assessment of realization of carryforward
                  tax losses in future years                                         (56.0%)           (8.5%)
               Effects of inflation                                                   (9.1%)            2.4%
               Effect arising from assessment of realization of tax benefits
                  in future years from tax on assets                                    --             (7.9%)
               Other permanent differences                                            14.8%             6.9%
                                                                                 ----------         --------

               Effective rate                                                        (42.9%)           27.9%
                                                                                 ==========         ========



      c.    SUBSEQUENT EVENT - Changes to the income tax law were enacted by the
            Mexican government on January 1, 2002, included the following:

            -     In addition to the reduction in the income tax rate and the
                  new procedure to determine the proportion in which the holding
                  company owns the shares of its subsidiaries, as mentioned in
                  preceding paragraph, the Company no longer has the option of
                  deferring the payment of 5% of taxable income until
                  distribution of related profits.

            -     Any income tax paid on distributed dividends may be credited
                  against future income tax payable by the Company in the three
                  fiscal years following such payment.

            -     The obligation to withhold income tax for dividends paid to
                  individuals or nonresidents is eliminated.

            -     Profit-sharing paid is no longer deductible against income
                  taxes.

            The effects of these changes on the calculation of deferred taxes
            must be recorded as of January 1, 2002, using the tax rate
            applicable when the temporary differences are expected to reverse.
            The Company has not fully quantified the net effect derived from
            these changes.

      d.    At December 31, the main items comprising the balance of deferred
            income tax and employee statutory profit-sharing are as follows:




                                      F-25







                                                                                     2000               2001
                                                                                             
         Deferred income tax liabilities:
             Property, plant and equipment                                      Ps.    721,288     Ps.    783,995
             Inventories                                                               377,176            348,833
             Other                                                                      55,049             45,871
                                                                                --------------     --------------
             Total                                                                   1,153,513          1,178,699
                                                                                --------------     --------------

         Deferred income tax assets:
             Tax inventory from 1986 (or 1988)                                         (33,193)           (24,937)
             Allowance for doubtful accounts                                           (26,090)           (37,390)
             Effect of tax loss carryforwards                                         (252,623)          (115,941)
             Effect of recoverable tax on assets                                        -                (122,906)
             Other                                                                     (57,008)          (104,973)
                                                                                --------------     --------------
             Total                                                                    (368,914)          (406,147)
                                                                                --------------     --------------
         Net non-current liability                                                     784,599            772,552
                                                                                --------------     --------------




                                                                                     2000               2001
                                                                                             
         Deferred employee statutory profit-sharing liabilities:
             Property, plant and equipment                                      Ps.    100,263     Ps.     69,101
             Inventories                                                                64,016             76,446
             Other                                                                      10,922             16,420
                                                                                --------------     --------------
             Total                                                                     175,201            161,967
                                                                                --------------     --------------

         Deferred employee statutory profit sharing assets:
             Tax inventory from 1986 (or 1988)                                          (9,292)            (6,674)
             Allowance for doubtful accounts                                            (7,090)            (3,895)
             Effect of tax loss carryforwards                                          -                   (8,144)
             Other                                                                     (15,229)           (16,649)
                                                                                --------------     --------------
             Total                                                                     (31,611)            35,362
                                                                                --------------     --------------
         Net non-current liability                                                     143,590            126,605
                                                                                --------------     --------------

             Total                                                              Ps.    928,189.    Ps.    899,157
                                                                                ===============    ==============


      e.    Due to an improvement in the circumstances used to assess the
            recovery of tax on assets paid and the benefits from tax loss
            carryforwards, in 2001 Ps.122,906 of allowance for recoverable tax
            on assets was cancelled and credited to results.

      f.    Tax on assets for which the prepaid income tax expense has been
            recognized can be recovered subject to certain conditions. Restated
            amounts as of December 31, 2001 and expiration dates are as follows:



              YEAR OF
            EXPIRATION                                         TAX ON ASSETS
                                                           
               2004                                           Ps.      4,167
               2006                                                    3,915
               2008                                                    4,913
               2009                                                   36,538
               2010                                                   62,845
               2011                                                   10,528
                                                              --------------
                                                              Ps.    122,906
                                                              ==============


         Also, certain subsidiaries have restated tax losses originated before
tax consolidation which may only be used to offset income generated by such
subsidiaries. Expiration dates and restated amounts are as follows:




                                      F-26







                                                                             TAX
             YEAR OF                                              LOSS
           EXPIRATION                                         CARRYFORWARDS
                                                          
              2007                                           Ps.     29,220
              2008                                                  121,907
              2009                                                   32,508
              2010                                                   38,069
              2011                                                   32,112
                                                             --------------
                                                             Ps.    253,816
                                                             ==============


            As of December 31, 2001, certain subsidiaries have carryforward tax
            losses of Ps.77,445, that originated after the tax consolidation,
            which may only be used to offset income generated by such
            subsidiaries.

      g.    For the year ended December 31, 1999, the Company amortized
            carryforward tax losses that resulted in a benefit of Ps.257,983,
            which is reflected as an extraordinary gain in the consolidated
            statement of income.

      h.    For the year ended December 31, 2001 the change in deficiency in
            restated shareholders' equity, as shown in the consolidated
            statement of changes in shareholders' equity, is presented net of
            the effect of Ps.39,119 for the related deferred income tax.


13.   FINANCIAL INSTRUMENTS

      The estimated fair value amounts presented below have been determined by
      using available market information or other valuation methodologies that
      require considerable judgment in interpreting market values and estimates.
      Consequently, the estimates presented are not necessarily indicative of
      the amounts the Company could realize in the market. The use of different
      assumptions in market values and other valuation methodologies may have a
      material effect on the fair values. Except for that presented in the
      following table, the book value of the Company's financial instruments
      approximates fair value, given the short-term period for settlement or
      payment.



                                                           DECEMBER 31,
                                      --------------------------------------------------------
                                               2000                         2001
                                      ---------------------------      -------------------------
                                      RECORDED         ESTIMATED       RECORDED        ESTIMATED
                                      VALUE            FAIR VALUE      VALUE           FAIR VALUE
                                                                           
Long-term debt -- variable
 interest rates                       Ps. 1,630,938    Ps. 1,630,938   Ps. 1,510,839   Ps.1,510,839
Long-term debt -- fixed
 interest rates                           1,611,936        1,699,077       1,465,600      1,506,626
                                       ------------    -------------   -------------   ------------
                                      Ps. 3,242,874    Ps. 3,330,015   Ps. 2,976,439   Ps. 3,017,465
                                      ==============   =============   =============   =============


14.   COMMITMENTS AND CONTINGENCIES

      a.    The Company leases certain facilities, which include bottling
            plants, warehouses, distribution centers and office space. In
            addition, the Company leases 1,439 trucks, 67,504 in-store
            refrigerated displays cases and other machinery and equipment. The
            leases are primarily operating leases and are primarily payable in
            U.S. dollars.

            At December 31, 2001, future minimum commitments under operating
            leases are as follows:




                                      F-27






                      YEAR ENDING
                      DECEMBER 31,                       AMOUNT
                                                    
                          2002                         $ 151,042
                          2003                            79,400
                          2004                            16,800
                          2005                             9,258


            For the years ended December 31, 1999, 2000 and 2001, rent and lease
            expenses charged to operations were Ps.337,253, Ps.297,111 and
            $213,961, respectively.

      b.    The Ministry of Finance and Public Credit has asserted that the
            interest payments made on the Guaranteed Notes are not eligible for
            reduced withholding levels under Mexico's reduced withholding rate
            rule based on Pepsi-Gemex's failure to make, on a timely basis,
            certain filings containing information relating to the issuance of
            the Guaranteed Notes. Pepsi-Gemex has since filed all of the
            required information and, accordingly, expects interest payments on
            the Guaranteed Notes will qualify for the reduced rate rule. The
            Ministry of Finance's initial assertion with respect to the
            September 30, 1997 interest payment only, was confirmed by the
            Mexican tax court. As a result, the Company is currently contesting
            the position of the Ministry of Finance in Mexican Federal Court.
            The Ministry of Finance and Public Credit is seeking approximately
            Ps.28.0 million (including interest but not including penalties) in
            respect of the September 30, 1997 initial interest payment. In 2002,
            the Ministry of Finance notified the Company that it was also
            seeking approximately Ps.120.0 million (including interest but not
            including penalties) in respect of interest payments made between
            March 30, 1998 and September 30, 2001. Although the Company has not
            received a notice relating to the remaining payments to be made
            between 2002 and 2004, the Company estimates the imposition of the
            higher withholding rate would result in an incremental obligation of
            approximately Ps.62.0 million (excluding interest and penalties)
            (above the amount that would be required at the reduced withholding
            rate). As a result of the Mexican Tax court ruling described above,
            Pepsi-Gemex has recorded a reserve on its balance sheet of Ps.28
            million relating to its potential liability in this matter. However,
            based on the advice of outside tax counsel, the Company does not
            believe that the ultimate resolution of this dispute will have a
            material adverse effect on its results of operations of financial
            condition. However, it cannot assure that the ultimate extent of its
            liability for withholding obligations or associated penalties or
            interest will not significantly exceed its expectations or that the
            ultimate resolution of this dispute will not materially and
            adversely affect its results of operations or financial position.


      c.    In connection with the acquisition of the Northeast Bottling Group,
            a company owned by Pepsi-Gemex acquired all of the outstanding
            indebtedness of the companies comprising the Northeast Bottling
            Group. Included in this indebtedness was a promissory note that had
            been assigned to Sharp Capital Inc., an investment advisory firm,
            and a related arbitration award in favor of Sharp Capital, Inc, and
            against the companies in the Northeast Bottling Group. The note and
            arbitration award were acquired by a subsidiary of Pepsi-Gemex for
            value in September 1998 in a transaction notarized in Mexico.
            Subsequent to our subsidiary's acquisition of the promissory note
            and arbitration award, the assets of Sharp Capital Inc. were placed
            under the control of a court-appointed Special Master.

            Some of Pepsi-Gemex subsidiaries are currently defendants in a
            lawsuit, pending in a U.S. federal court in Texas, brought by
            International Transactions Ltd., an entity claiming to be a former
            client of Sharp Capital Inc. International Transactions Ltd.
            received an assignment in February 2001of all of the Special
            Master's rights in Sharp Capital's arbitration award and is seeking
            confirmation and enforcement of that award (which totaled $11.4
            million) against the companies in the Northeast Bottling Group. In
            addition to the award, the plaintiff is seeking post-judgment
            interest and costs. The Company is contesting the jurisdictional
            basis of this lawsuit, and intend, if necessary, to contest the
            substance of the lawsuit in the appropriate forum. Among other
            things, Pepsi-Gemex believes that purported assignment by the
            Special Master was ineffective because all rights to the note and
            the award had been sold to its subsidiary, for value, two and a half
            years earlier. The Company believes that the ultimate resolution of
            this proceeding will not have a material adverse effect on its
            results of operations. However, it cannot assure that the ultimate
            extent of its liability for the arbitration award will not
            significantly exceed its expectations or that the ultimate
            resolution of this dispute will not materially and adversely affect
            its results of operations or financial position.




                                      F-28




      d. Embotelladora Moderna, S.A. de C.V. and Embotelladora de Refrescos
         Mexicanos, S.A. de C.V., subsidiaries of Emvasa, are parties in a
         lawsuit against the National Water Commission. These subsidiaries claim
         that they made excess payments to the National Water Commission between
         1990 and 1996, which resulted in a credit balance at the Commission. As
         a result, from 1997 through a portion of 2001, they withheld a portion
         of their required payments to the Commission, expecting that the
         Commission would draw the payments from their credit balance. However,
         the commission did not recognize their excess payments. The demand of
         the National Water Commission is Ps.82.8 million. The Company believes
         it is probable that this litigation will have an adverse outcome;
         therefore, a contingent liability for the entire amount of the demand
         has been recorded on its balance sheet.

      e. The Company currently possesses warehouse certificates (similar to
         negotiable warehouse receipts in the United States) redeemable for
         sugar at the official warehouse for sugar which is operated by
         Almacenadora Mexico, S.A. The Company has presented these certificates
         to Almacenadora but they have refused to honor its certificates. The
         certificates are redeemable for approximately 14 tons of sugar, which
         on December 31, 2001, was worth approximately Ps.71.0 million at the
         then prevailing price per ton of sugar. The Company has made a formal
         demand for payment either in sugar or in cash and Almacenadora has not
         responded. The Company plans to initiate commercial and criminal
         proceedings against Almacenadora if they do not comply with its demand.
         The certificates are recorded on the Company's balance sheet at a value
         of Ps.71.0, their cost basis to it, as it expects to recover the entire
         value of the certificates, either in sugar or in cash.

      f. The Company and its subsidiaries are parties to certain legal
         proceedings incidental to its business. The Company believes that none
         of this proceedings is likely to have a material adverse effect on the
         Company.


15.   NEW ACCOUNTING PRINCIPLES

      In December 2001, the MIPA issued new Bulletin C-9, "Liabilities,
      Provisions, Contingent Assets and Liabilities, and Commitments" ("C-9"),
      which is effective beginning January 1, 2003, although early application
      is encouraged. C-9 supersedes the former Bulletins C-9, "Liabilities" and
      C-12, "Contingencies and Commitments", and establishes additional
      guidelines clarifying the accounting for liabilities, provisions, and
      contingent assets and liabilities, and establishes new standards for the
      use of present value techniques to measure liabilities and accounting for
      the early settlement of obligations.

      On January 2002 the MIPA issued new Bulletin C-8, "Intangible Assets"
      ("C-8"), whose provisions are mandatory for fiscal years beginning January
      1, 2003, although early application is encouraged. C-8 supersedes the
      former Bulletin C-8, "Intangibles" and establishes that project
      development costs should be capitalized if they fulfill the criteria
      established for recognition as assets. Any preoperating costs incurred
      after the effective date of this Bulletin should be recorded as an
      expense. The unamortized balance of capitalized preoperating costs under
      the former Bulletin C-8 will continue to be amortized. C-8 requires
      identifying all intangible assets to reduce as much as possible the
      goodwill relative to business combinations.

      The Company has not fully assessed the effects of adopting these two new
      accounting principles in its financial position and results of operations.
      However, as the provisions recorded and development expenses incurred are
      immaterial, the Company's management believes that adoption of such new
      principles will not have a material effect on its financial position and
      results of operations.


16.   SUBSEQUENT EVENTS

      In January of 2002, the Company signed a supply agreement with Reid
      Mexico, S.A. de C.V., for the purchase of up to 1.8 million jugs in 2002
      and 1.3 million jugs in 2003, at a fixed price per jug..

      The executive share ownership program referred to in Note 9 was amended on
      February 27, 2002 to extend the term for the exercise period of the
      options from three years to seven years from the date of vesting.
      Therefore, under the program currently in place, options granted under the
      revised option program will vest three years





                                      F-29






      after the date of grant by the Compensation Committee, and are exercisable
      at any time during a term of seven years thereafter.

      At the Shareholders' General Ordinary Meeting of April 30, 2002, it was
      resolved that Ps.297,594.0 of Pepsi-Gemex retained earnings will be
      applied to make a dividend payment to holders of its shares within the
      year of 2002 as follows: (i) Ps.0.25743226 for each of the 374,711,008
      shares of Series D Shares outstanding (including the Series D preferred
      dividend); (ii) Ps.0.17753949 for each of the 758,171,017 shares of Series
      B Shares outstanding; and (iii) Ps.0.17753949 for each of the 374,711,008
      shares of Series L Shares outstanding. Holders of CPOs will receive
      Ps.0.61251124 for each of their CPOs (which includes their Series D
      preferred dividend, their Series B dividend and their Series L dividend).

      In May of 2002, The Pepsi Bottling Group, Inc. ("PBG"), announced that it
      had entered into non-binding agreements with the Company's two largest
      shareholders, regarding a potential transaction to acquire the Company.
      Neither PBG nor either the Company's shareholders is obligated to enter or
      complete this transaction on the terms agreed upon. If the proposed
      transaction is not completed or is completed on less advantageous terms to
      the Company's shareholders, the market price of the Company's securities
      could be adversely affected.

      In June of 2002, the Company entered into a lease with Cocoser, S.A. de
      C.V., a company owned and controlled by our major shareholder's brother,
      for the rental of two machines to be used in the production of jugs. The
      term of this lease is three years and will begin to run in the second half
      of 2002. The value of the equipment being leased by the Company is
      approximately $2.2 million. The Company will bear all expenses of
      installing, operating and maintaining the equipment and will pay a
      variable rent based on the Company's level of use of the equipment. The
      lease provides for a minimum annual rent of $1.0 million per year, which
      corresponds to using the equipment at 70% of its capacity. The Company has
      the option to purchase the equipment at fair market value at the end of
      the lease.

      On 2002, the Compensation Committee took formal action to ratify the grant
      and issue 7,047,726 of the options that the Company previously committed
      to issue relating to the 2000 fiscal year. As required by the program,
      these options will vest in 2003 at an exercise price of Ps.2.6466 per T
      Share (or Ps.7.94 per CPO), determined by reference to the closing price
      of the CPOs on April 28, 2000.

      As a result of the amendments to the Securities Market Law, for the years
      2001 and beyond, Pepsi-Gemex is no longer able to issue Series B, D and L
      Shares (or the CPOs that would represent them) in addition to those that
      were reserved for issuance prior to such amendments. Consequently, the
      Company will not be able to support the exercise of the options granted
      during 2001 and 2002 as a result of the fact that the Company does not
      have the Series B, D and L shares or the corresponding CPOs that would be
      issued to executives that request the convertion of Series T shares that
      such executives would receive upon the exercise of such options. The
      Compensation Committee is in the process of determining alternative ways
      to compensate Pepsi-Gemex executives in lieu thereof.


17.   CONSOLIDATING CONDENSED FINANCIAL STATEMENTS

      The following are consolidating condensed financial statements which
      present, in separate columns, Pepsi-Gemex carrying its investment in
      subsidiaries under the equity method, the guarantors of the Guaranteed
      Notes on a combined basis and Bebidas Purificadas del Noreste, S.A. de
      C.V. and its subsidiaries ("BPN") through which the Company owns the
      Northeast Bottling Group, (the only subsidiaries of the Company that are
      not guarantors of the Guaranteed Notes), with additional columns
      reflecting eliminations and the consolidated totals as of and for the
      years ended December 31, 1999, 2000 and 2001.

      Pepsi-Gemex is a holding company with no independent operations other than
      its investments in its subsidiaries, the guarantors of the Guaranteed
      Notes are wholly owned and the guarantors have jointly and severally
      guaranteed the Guaranteed Notes on a full and unconditional basis.

      There are no restrictions on the Guarantors' ability to pay dividends,
      make loans or advances to Pepsi-Gemex.




                                      F-30






CONSOLIDATING CONDENSED
STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1999



                                               Pepsi-Gemex        Guarantors                                          Pepsi-Gemex
                                               Parent Only         Combined           BPN           Eliminations      Consolidated
                                               ------------      -------------    -------------     -------------     -------------

REVENUES:
                                                                                                       
  Net sales                                     Ps. 649,927    Ps. 11,316,621     Ps. 1,214,910     Ps. (5,041,014)   Ps. 8,140,444
  Other                                              14,385            55,323            19,751           (40,448)           49,011
                                                -----------       -----------       -----------       -----------       -----------
                                                    664,312        11,371,944         1,234,661        (5,081,462)        8,189,455
                                                -----------       -----------       -----------       -----------       -----------


COSTS AND EXPENSES:
  Cost of sales                                          --         6,055,986           725,958        (3,137,928)        3,644,016
  Selling expenses                                       --         3,525,473           309,079        (1,002,349)        2,832,203
  General and administrative expenses                12,046           645,365            60,182          (257,170)          460,423
  Depreciation and amortization                          --           278,930            33,532            (4,003)          308,459
                                                -----------       -----------       -----------       -----------       -----------
                                                     12,046        10,505,754         1,128,751        (4,401,450)        7,245,101
                                                -----------       -----------       -----------       -----------       -----------

OPERATING INCOME (LOSS)                             652,266           866,190           105,910          (680,012)          944,354
                                                -----------       -----------       -----------       -----------       -----------


INTEGRAL (INCOME) COST OF FINANCING - Net:
  Interest income                                  (394,716)         (178,756)           (6,677)          505,695           (74,454)
  Interest expense                                  436,221           429,921            77,513          (517,937)          425,718
  Foreign exchange income - net                    (124,896)             (471)          (11,939)               --          (137,306)
  Monetary position gain                           (167,293)         (110,395)          (70,395)               --          (348,083)
                                                -----------       -----------       -----------       -----------       -----------
                                                   (250,684)          140,299           (11,498)          (12,242)         (134,125)
                                                -----------       -----------       -----------       -----------       -----------

OTHER EXPENSE - Net                                 (64,516)          (13,498)               --           (25,434)         (103,448)
                                                -----------       -----------       -----------       -----------       -----------

INCOME BEFORE PROVISIONS PROVISIONS:                838,434           712,393           117,408          (693,204)          975,031
                                                -----------       -----------       -----------       -----------       -----------

PROVISIONS:
  Income taxes and asset tax                         15,588            20,177             8,126            36,354            80,245
  Employee statutory profit-sharing                      --            15,911            (7,020)           (5,476)            3,415
                                                -----------       -----------       -----------       -----------       -----------
                                                     15,588            36,088             1,106            30,878            83,660
                                                -----------       -----------       -----------       -----------       -----------

CONSOLIDATED NET INCOME                          Ps.822,846        Ps.676,305        Ps.116,302       Ps.(724,082)       Ps.891,371
                                                ===========       ===========       ===========       ===========       ===========




                                      F-31






CONSOLIDATING CONDENSED
STATEMENT OF CHANGES IN FINANCIAL POSITION
YEAR ENDED DECEMBER 31, 1999



                                               Pepsi-Gemex       Guarantors                                           Pepsi-Gemex
                                               Parent Only        Combined         BPN             Eliminations       Consolidated
                                              ------------      -------------   -------------     --------------     -------------
                                                                                                      
RESOURCES (USED IN) PROVIDED BY
 OPERATING ACTIVITIES                         Ps. (303,912)     Ps. 1,472,573   Ps.    54,427     Ps.         --     Ps. 1,223,088
                                              ------------      -------------   -------------     --------------     -------------

FINANCING ACTIVITIES:
  Net change in notes payable                    (211,139)          108,064                --                 --          (103,075)
  Net change in long-term debt                   (267,542)          (58,346)          (41,732)                --          (367,620)
  Repurchase of capital stock - net               537,792          (565,142)           27,350                 --               --
  Dividends paid
  Affiliates                                      (11,172)               --                --                 --           (11,172)
                                              ------------      -------------   -------------     --------------     -------------
    Resources (used in) generated by
      financing activities                         47,939          (515,424)          (14,382)                --          (481,867)
                                              ------------      -------------   -------------     --------------     -------------

INVESTING ACTIVITIES:
  Acquisition and sale of property, plant
   and equipment - net                                 --          (941,141)          (34,463)                --          (975,604)
  Increase in other assets                             --           (30,039)               --                 --           (30,039)
  Decrease (increase) in bottles and cases             --            42,492           (42,492)                --                --
  Loan (to) from associated company                    --           (13,498)           13,498                 --                --
                                             ------------     -------------     -------------     --------------     -------------
    Resources used in investing activities             --          (942,186)          (63,457)                --        (1,005,643)
                                             ------------     -------------     -------------     --------------     -------------

  Increase (decrease) in cash and cash
    equivalents                                  (255,973)           14,963           (23,412)                --          (264,422)

CASH AND CASH EQUIVALENTS:
  Merging cash                                        150              (150)               --                 --               --
  Cash for consolidating effects                       --            51,087                --                 --            51,087
  Beginning of year                               288,438            66,258            51,155                 --           405,851
                                             ------------     -------------     -------------     --------------     -------------

  End of year                                Ps.   32,615     Ps.   132,158     Ps.    27,743      Ps.        --      Ps.  192,516
                                             ============     =============     =============      =============      =============





                                      F-32






CONSOLIDATING CONDENSED
BALANCE SHEET
DECEMBER 31, 2000



                                                   Pepsi-Gemex       Guarantors                                         Pepsi-Gemex
ASSETS                                             Parent Only        Combined           BPN         Eliminations       Consolidated
                                                  --------------    --------------  --------------  --------------    --------------
                                                                                                       
CURRENT ASSETS:
  Cash and cash equivalents                       Ps.     40,614    Ps.    149,354  Ps.    36,807   Ps.        --     Ps.   226,775
  Accounts receivable - net                               26,503         5,278,228      1,697,530      (5,988,214)        1,014,047
  Affiliated companies                                 4,004,263                --             --      (4,004,263)               --
  Inventories                                                 --           533,592         76,455         446,887         1,056,934
  Prepaid expenses                                        26,786            27,519         10,676         (26,786)           38,195
                                                  --------------    --------------  --------------  --------------    --------------
      Total current assets                             4,098,166         5,988,693      1,821,468      (9,572,376)        2,335,951

DEFERRED INCOME TAX                                      104,228                --             --        (104,228)               --
PROPERTY, PLANT AND EQUIPMENT - Net                           --         6,919,860        272,067          70,520         7,262,447
INVESTMENT IN SUBSIDIARIES AND
 ASSOCIATED COMPANIES                                  5,755,949            15,552        929,786      (6,701,287)               --
EXCESS OF COST OVER FAIR VALUE OF
  NET ASSETS ACQUIRED - Net                              662,574           103,167             --         502,598         1,268,339
DEBT ISSUANCE COSTS                                       25,485                --             --         (25,485)               --
OTHER ASSETS                                                  --           708,171        397,804        (684,632)          421,343
                                                  --------------    --------------  --------------  --------------    --------------
TOTAL ASSETS                                      Ps. 10,646,402    Ps. 13,735,443  Ps. 3,421,125   Ps. (16,514,890)  Ps.11,288,080
                                                  ==============    ==============  =============   ===============   =============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Notes payable                                    Ps.    879,754    Ps.      6,915  Ps.        --   Ps.    (6,915)    Ps.   879,754
  Current portion of long-term debt                      171,322            36,803             --        (171,322)           36,803
  Trade accounts payable                                      --           548,835         36,293           2,734           587,862
  Taxes payable, accrued expenses and
   other liabilities                                          --           549,360        250,053        (248,463)          550,950
  Due to affiliates                                    1,505,308         5,428,798      2,471,384      (9,401,961)            3,529
                                                  --------------    --------------  --------------  --------------    --------------
      Total current liabilities                        2,556,385         6,570,711      2,757,730      (9,825,928)        2,058,898

LONG-TERM DEBT AND OTHER NONCURRENT LIABILITIES        3,123,126            61,885         57,775          91,315         3,334,101
DEFERRED INCOME TAX AND EMPLOYEE
 STATUTORY PROFIT-SHARING                                     --         2,891,951         87,293      (2,051,055)          928,189
                                                  --------------    --------------  --------------  --------------    --------------
      Total liabilities                                5,679,510         9,524,547      2,902,798     (11,785,667)        6,321,188
                                                  --------------    --------------  --------------  --------------    --------------

SHAREHOLDERS' EQUITY:
  Capital stock                                          878,219         6,131,375      1,515,054      (7,646,429)          878,219
  Additional paid-in capital                           4,798,696           543,263         59,163        (602,426)        4,798,696
  Retained earnings                                    1,897,569         3,603,288       (813,589)     (2,789,699)        1,897,569
  Reserves                                             1,045,969            35,473             --         (35,473)        1,045,969
  Cumulative effect of deferred income tax and
   employee statutory profit-sharing                  (1,300,190)       (1,701,567)       (18,925)      1,720,492        (1,300,190)

  Deficiency in restated shareholders' equity         (2,353,371)       (4,400,936)      (223,376)      4,624,312        (2,353,371)
                                                  --------------    --------------  --------------  --------------    --------------
    Total shareholders' equity                         4,966,892         4,210,896        518,327      (4,729,223)        4,966,892
                                                  --------------    --------------  --------------  --------------    --------------
  TOTAL LIABILITIES AND SHAREHOLDERS'
   EQUITY                                         Ps. 10,646,402    Ps. 13,735,443  Ps. 3,421,125   Ps. (16,514,890)  Ps.11,288,080
                                                  ==============    ==============  ==============  ==============    =============




                                      F-33






CONSOLIDATING CONDENSED
STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2000




                                               Pepsi-Gemex       Guarantors                                            Pepsi-Gemex
                                               Parent Only        Combined           BPN            Eliminations       Consolidated
                                              -------------     -------------    --------------     -------------     -------------
                                                                                                       
REVENUES:
  Net sales                                   Ps.   323,745     Ps.12,679,287    Ps.  2,423,770     Ps.(5,854,042)    Ps.9,572,760
  Other                                              55,352            69,379            12,049           (49,128)           87,652
                                              -------------     -------------    --------------     -------------     -------------
                                                    379,097        12,748,666         2,435,819        (5,903,170)        9,660,412
                                              -------------     -------------    --------------     -------------     -------------

COSTS AND EXPENSES:
  Cost of sales                                          --         6,607,235         1,699,627        (4,049,962)        4,256,900
  Selling expenses                                       --         4,065,506           493,483        (1,071,199)        3,487,790
  General and administrative expenses                31,535           811,148           106,201          (382,781)          566,103
  Depreciation and amortization                          --           448,459            32,505          (172,074)          308,890
                                              -------------     -------------    --------------     -------------     -------------
                                                     31,535        11,932,348         2,331,816        (5,676,016)        8,619,683
                                              -------------     -------------    --------------     -------------     -------------

OPERATING INCOME                                    347,562           816,318           104,003          (227,154)        1,040,729
                                              -------------     -------------    --------------     -------------     -------------


RESTRUCTURING CHARGES                                    --           543,459            25,521                --           568,980

INTEGRAL (INCOME) COST OF FINANCING - Net:
  Interest income                                  (513,194)         (226,034)           (9,241)          733,572           (14,897)
  Interest expense                                  523,383           495,530            87,891          (702,501)          404,303
  Foreign exchange loss - net                        45,942             5,630             9,363            10,360            71,295
  Monetary position gain                           (172,786)          (68,836)          (57,860)         (127,126)         (426,608)
                                              -------------     -------------    --------------     -------------     -------------
                                                   (116,655)          206,290            30,153           (85,695)           34,093
                                              -------------     -------------    --------------     -------------     -------------


OTHER EXPENSES - NET                                (62,031)           55,532           (17,173)           (7,841)          (31,513)
                                              -------------     -------------    --------------     -------------     -------------


INCOME BEFORE PROVISIONS                            402,187           122,101            31,156          (149,301)          406,143
                                              -------------     -------------    --------------     -------------     -------------

PROVISIONS:
  Income tax and tax on assets                      (80,335)          183,342            55,790          (333,216)         (174,419)
  Employee statutory profit-sharing                      --            21,315            14,567            29,089            64,971
                                              -------------     -------------    --------------     -------------     -------------
                                                    (80,335)          204,657            70,357          (304,127)         (109,448)
                                              -------------     -------------    --------------     -------------     -------------

CONSOLIDATED NET INCOME                       Ps.   482,522     Ps.   (82,556)   Ps.    (39,201)    Ps.   154,826     Ps.    515,591
                                              =============     =============    ==============     =============     =============




                                      F-34






CONSOLIDATING CONDENSED
STATEMENT OF CHANGES IN FINANCIAL POSITION
YEAR ENDED DECEMBER 31, 2000



                                                   Pepsi-Gemex       Guarantors                                       Pepsi-Gemex
                                                   Parent Only        Combined          BPN         Eliminations      Consolidated
                                                  --------------   --------------   -------------   --------------    -------------
                                                                                                       
RESOURCES (USED IN) PROVIDED BY
 OPERATING ACTIVITIES                             Ps.    377,531   Ps.  2,705,650   Ps.   (36,605)  Ps. (2,082,629)   Ps.   963,947
                                                  --------------   --------------   -------------   --------------    -------------

FINANCING ACTIVITIES:
  Net change in notes payable                           (244,128)          67,025        (146,701)          (5,693)        (329,497)
  Due from subsidiaries and associates                  (561,217)              --              --         (561,217)              --
  Net change in long-term debt                         1,177,941          (92,056)             --               --        1,085,885
  Capital stock increase                                  42,262               --              --               --           42,262
  Sale of capital stock - net                              7,520               --              --               --            7,520
  Shares issued in exchange of minority interest         358,282               --              --               --          358,282
  Cumulative effect of deferred income tax
    and employee statutory profit-sharing:
      Increase in liabilities                          1,300,190        1,604,048              --       (1,604,048)       1,300,190
      Decrease in shareholders' equity                (1,300,190)      (1,604,048)             --        1,604,048       (1,300,190)
                                                  --------------   --------------   -------------   --------------    -------------
    Resources (used in) generated by financing
     activities                                          780,660          (25,031)       (146,701)         555,524        1,164,452
                                                  --------------   --------------   -------------   --------------    -------------

INVESTING ACTIVITIES:
  (Acquisition) and sale of property, plant
  and equipment - net                                         --       (1,031,819)             --               --       (1,031,819)
  Increase in other assets                                    --           (1,506)             --               --           (1,506)
  Payment for acquisition of subsidiaries,
  net of cash received                                (1,150,193)      (1,628,507)        192,371        1,885,387         (700,942)
  Acquisition of minority interest                            --               --              --         (358,282)        (358,282)
  Loan to associated company                                  --           (1,591)             --               --           (1,591)
                                                  --------------   --------------   -------------   --------------    -------------
    Resources used in investing activities            (1,150,193)      (2,663,423)        192,371        1,527,105       (2,094,140)
                                                  --------------   --------------   -------------   --------------    -------------

  Increase in cash and cash equivalents                    7,998           17,196           9,065               --           34,259

CASH AND CASH EQUIVALENTS:
  Beginning of year                                       32,616          132,158          27,742               --          192,516
                                                  --------------   --------------   -------------   --------------    -------------
  End of year                                     Ps.     40,614    Ps.   149,354   Ps.    36,807   Ps.         --    Ps.   226,775
                                                  ==============   --------------   -------------   ==============    =============



                                      F-35






CONSOLIDATING CONDENSED
BALANCE SHEET
DECEMBER 31, 2001



                                                Pepsi-Gemex      Guarantors                                            Pepsi-Gemex
ASSETS                                          Parent Only       Combined             BPN         Eliminations       Consolidated
                                               --------------   --------------    --------------  ---------------    --------------
                                                                                                      
CURRENT ASSETS:
  Cash and cash equivalents                    Ps.      7,421   Ps.     91,744    Ps.         11  Ps.         --     Ps.     99,176
  Accounts receivable - net                         1,104,808       14,066,226            17,863      (14,208,137)          980,760
  Inventories                                       4,166,612          934,734           178,052       (4,543,539)          735,859
  Prepaid expenses                                      9,765           27,997                --          (17,109)           20,653
                                               --------------   --------------    --------------  ---------------    --------------
    Total current assets                            5,288,606       15,120,701           195,926      (18,768,785)        1,836,448

DEFERRED INCOME TAX                                     4,052               --                --           (4,052)               --
PROPERTY, PLANT AND EQUIPMENT - Net                        --        6,922,994                --          202,896         7,125,890
INVESTMENT IN SUBSIDIARIES AND
 ASSOCIATED COMPANIES                               4,572,168          643,495           658,722       (5,874,385)               --
EXCESS OF COST OVER FAIR VALUE OF
 NET ASSETS ACQUIRED - Net                            603,909          359,919                --          328,309         1,292,137
DEBT ISSUANCE COSTS                                    17,644               --                --          (17,644)               --
OTHER ASSETS                                               --          426,471                --         (101,901)          324,570
                                               --------------   --------------    --------------  ---------------    --------------
TOTAL ASSETS                                   Ps. 10,486,379   Ps. 23,473,580    Ps.    854,648  Ps. (24,235,562)   Ps. 10,579,045
                                               ==============   ==============    ==============  ===============    ==============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Notes payable                                   Ps. 344,380        Ps. 3,591             Ps. -      Ps. (1,007)       Ps. 346,964
  Current portion of long-term debt                        --           27,468                --            2,478            29,946
  Trade accounts payable                                   --          557,328                --            4,809           562,137
  Taxes payable, accrued expenses and
   other liabilities                                   81,913        2,388,800             8,373       (1,788,012)          691,074
  Dividend payable                                    246,931        1,062,871                --       (1,062,871)          246,931
  Due to affiliates                                 2,307,193       12,816,176           729,331      (15,852,700)               --
                                               --------------   --------------    --------------  ---------------    --------------
    Total current liabilities                       2,980,417       16,856,234           737,704      (18,697,303)        1,877,052

LONG-TERM DEBT AND OTHER NONCURRENT LIABILITIES     2,839,600          196,770                --          100,104         3,136,474
DEFERRED INCOME TAX AND EMPLOYEE
 STATUTORY PROFIT-SHARING                                  --        1,134,200                --         (235,043)          899,157
                                               --------------   --------------    --------------  ---------------    --------------
    Total liabilities                               5,820,017       18,187,204           737,704      (18,832,242)        5,912,683
                                               --------------   --------------    --------------  ---------------    --------------

SHAREHOLDERS' EQUITY:
  Capital stock                                       878,933        7,672,444                82       (7,672,526)          878,933
  Additional paid-in capital                        4,551,834          602,427                --         (602,427)        4,551,834
  Retained earnings                                 2,492,757        1,467,178           129,466       (1,596,644)        2,492,757
  Reserves                                          1,065,014          111,465                --         (111,465)        1,065,014
  Cumulative effect of deferred income tax and
    employee statutory profit-sharing              (1,300,190)              --            47,797          (47,797)       (1,300,190)
  Shareholders' equity adjustment from
   labor obligations upon retirement                  (43,403)              --                --               --
                                                                                                                            (43,403)
  Deficiency in restated shareholders' equity      (2,978,583)      (4,567,138)          (60,401)       4,627,539        (2,978,583)
                                               --------------   --------------    --------------  ---------------    --------------
  Total shareholders' equity                        4,666,362        5,286,376           116,944       (5,403,320)        4,666,362
                                               --------------   --------------    --------------  ---------------    --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     Ps. 10,486,379   Ps. 23,473,580    Ps.    854,648  Ps. (24,235,562)   Ps. 10,579,045
                                               ==============   ==============    ==============  ===============    ==============



                                      F-36






 CONSOLIDATING CONDENSED
 STATEMENT OF INCOME
 YEAR ENDED DECEMBER 31, 2001



                                                Pepsi-Gemex       Guarantors                                          Pepsi-Gemex
                                                Parent Only        Combined           BPN           Eliminations      Consolidated
                                                -----------     -------------     -------------     -------------     -------------
                                                                                                       
REVENUES:
  Net sales                                     Ps.      --     Ps.17,588,252     Ps.        --     Ps.(6,552,040)    Ps.11,036,212
                                                    537,169                --               (19)         (537,150)               --
  Other                                              14,181           443,820               207          (401,211)           56,997
                                                -----------     -------------     -------------     -------------     -------------
                                                    551,350        18,032,072               188        (7,490,401)       11,093,209
                                                -----------     -------------     -------------     -------------     -------------

COSTS AND EXPENSES:
  Cost of sales                                          --         9,963,251                --        (5,064,508)        4,898,743
  Selling expenses                                       --         4,937,474                --          (968,264)        3,969,210
  General and administrative expenses                22,312         1,148,832                 2          (519,884)          651,262
  Depreciation and amortization                       7,841           401,124                --            (5,875)          403,090
                                                -----------     -------------     -------------     -------------     -------------
                                                     30,153        16,450,681                 2        (6,558,531)        9,922,305
                                                -----------     -------------     -------------     -------------     -------------

OPERATING INCOME                                    521,197         1,581,391               186          (931,870)        1,170,904
                                                -----------     -------------     -------------     -------------     -------------


RESTRUCTURING CHARGE                                     --           254,497                --          (117,631)          136,866


INTEGRAL (INCOME) COST OF FINANCING - Net:
  Interest income                                  (679,221)         (218,609)          (28,675)          920,524            (5,981)
  Interest expense                                  524,617           646,555           109,036          (880,553)          399,655
  Foreign exchange loss - net                      (156,394)          (38,140)              943           (24,003)         (217,594)
  Monetary position gain                            (61,608)          (75,755)          (21,268)                6          (158,625)
                                                -----------     -------------     -------------     -------------     -------------
                                                   (372,606)          314,051            60,036            15,974            17,455
                                                -----------     -------------     -------------     -------------     -------------

OTHER (EXPENSE) INCOME - Net                        (71,382)          (81,667)               --           350,445           197,396
                                                -----------     -------------     -------------     -------------     -------------

INCOME BEFORE PROVISIONS                            822,421           931,176           (59,850)         (874,561)          819,187
                                                -----------     -------------     -------------     -------------     -------------

PROVISIONS:
  Income taxes and asset tax                        227,233           503,082                --          (501,469)          228,846
  Employee statutory profit-sharing                                    11,206                --           (16,053)           (4,847)
                                                -----------     -------------     -------------     -------------     -------------

CONSOLIDATED NET INCOME                         Ps. 595,188     Ps.   416,889     Ps.   (59,850)    Ps.  (357,039)    Ps.   595,188
                                                ===========     =============     =============     =============     =============



                                      F-37







CONSOLIDATING CONDENSED
STATEMENT OF CHANGES IN FINANCIAL POSITION
YEAR ENDED DECEMBER 31, 2001



                                                    Pepsi-Gemex       Guarantors                                      Pepsi-Gemex
                                                    Parent Only        Combined           BPN          Eliminations   Consolidated
                                                    -------------    -------------    -------------    ------------   -------------
                                                                                                       

RESOURCES (USED IN) PROVIDED BY OPERATING
 ACTIVITIES                                         Ps.  (925,992)   Ps. 2,806,155    Ps.   (94,399)   Ps.            Ps. 1,785,764
                                                    -------------    -------------    -------------    ------------   -------------

FINANCING ACTIVITIES:
  Net change in notes payable                            (535,374)           2,584               --              --        (532,790)
  Net change in long-term debt                           (283,526)          17,091               --              --        (266,435)
  Loans to (from) affiliates                              639,536         (733,912)          94,376                              --
  Capital stock increase
  (Repurchase) and sale of capital stock - net             19,828               --               --              --          19,828

  Shareholders' equity adjustment from labor
    obligations upon retirement                           (43,403)              --               --              --         (43,403)
  Dividends declared                                     (246,931)              --               --              --        (246,931)
  Dividends payable                                       246,931               --               --              --         246,931

    Decrease in shareholders' equity                           --           29,246          (29,246)             --              --
                                                    -------------    -------------    -------------    ------------   -------------

    Resources (used in) provided by
     financing activities                                (202,939)        (684,991)          65,130              --        (822,800)
                                                    -------------    -------------    -------------    ------------   -------------

INVESTING ACTIVITIES:
  (Acquisition) and sale of property, plant
    and equipment - net                                                 (1,089,243)
                                                                                                                         (1,089,243)
  Increase in other assets                                112,589          112,589
  Increase in goodwill                                         --         (113,909)              --              --        (113,909)
  Payment for acquisition of subsidiaries, net of
   cash received                                        1,095,738       (1,124,955)          29,217              --             --
  Acquisition of minority interest
  Loan to associated company
                                                    -------------    -------------    -------------    ------------   -------------
    Resources (used in) provided by
     investing activities                               1,095,738       (2,215,518)          29,217              --      (1,090,563)
                                                    -------------    -------------    -------------    ------------   -------------

  Increase in cash and cash equivalents                   (33,193)         (94,354)             (52)             --        (127,599)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                        40,614          186,098               63              --          26,775
                                                    -------------    -------------    -------------    ------------   -------------

  End of year                                       Ps.     7,421    Ps.    91,744    Ps.        11    Ps.       --   Ps.    99,176
                                                    =============    =============    =============    ============   =============




                                      F-38










18.   DIFFERENCES BETWEEN MEXICAN AND UNITED STATES OF AMERICA ACCOUNTING
      PRINCIPLES

      The Company's consolidated financial statements are prepared in accordance
      with Mexican GAAP, which vary in certain respects from accounting
      principles generally accepted in the United States of America ("U.S.
      GAAP").

      The Mexican GAAP consolidated financial statements include the effects of
      inflation as provided for under Bulletin B-10, as amended, whereas
      financial statements prepared under U.S. GAAP are presented on an
      historical cost basis. The following reconciliations to U.S. GAAP do not
      include the reversal of the adjustments required under Bulletin B-10, as
      amended, except as discussed in Note 18 (c). The application of Bulletin
      B-10, as amended, represents a comprehensive measure of the effects of
      price level changes in the Mexican economy and, as such, is considered a
      more meaningful presentation than historical cost-based financial
      reporting for both Mexican GAAP and U.S. GAAP purposes.

      Mexican GAAP also requires the restatement of all financial statements to
      constant pesos as of the date of the most recent balance sheet presented.

      All material differences, other than inflation accounting, between Mexican
      GAAP and U.S. GAAP and the effects on net income and total shareholders'
      equity are presented below with an explanation of the adjustments:





                                                                                                             Thousands of
                                                                                                             U.S. dollars
                                                                                                             (Convenience
                                                                                                             Translation)
                                                                     Year Ended December 31,                  Year Ended
        Reconciliation of net income of                    ----------------------------------------------       December
        majority interest                                       1999            2000           2001              31, 2001
- ----------------------------------------------------       -------------    -------------   -------------    --------------
                                                                                                 
Net income of majority interest reported
 under Mexican GAAP                                        Ps.  822,845     Ps.  482,522    Ps.   595,188    $       64,976

U.S. GAAP adjustments for:
   Deferred income taxes                                        (90,833)        (250,375)        (201,439)          (21,991)
   Deferred employee statutory profit-sharing                    30,033           11,690           18,116             1,978
   Restatement of foreign sourced fixed assets                  (45,780)         (53,067)        (103,998)          (11,354)
   Amortization of goodwill                                      27,865           (9,434)          27,867             3,042
   Accrued vacation cost                                         21,480          (13,311)         (12,462)           (1,360)
   Accrued severance payments                                        --           16,236          (16,236)           (1,772)
   Reversal of capitalized exchange losses and monetary
      position gains and related depreciation                    58,216           23,329            3,315               362
   Minority interest applicable to above adjustments            (76,899)              --               --                --
                                                           -------------    -------------   -------------    --------------
Net income under U.S. GAAP                                 Ps.  746,927     Ps.  207,590    Ps.   310,351    $       33,881
                                                           =============    =============   =============    ==============





                                      F-39








                                                                                                               Thousands of
                                                                                                               U.S. dollars
                                                                                                               (Convenience
                                                                                                               Translation)
                                                                     Year Ended December 31,                    Year Ended
        Reconciliation of net income of                    ------------------------------------------------      December
        shareholders' equity                                    1999              2000           2001            31, 2001
- -----------------------------------------------             -------------    ------------   ---------------    --------------
                                                                                                   
Total shareholders' equity reported under
Mexican GAAP                                                Ps. 5,805,972    Ps.4,966,892   Ps.   4,666,362    $      509,428
Less minority interest in consolidated
 subsidiary included in shareholders'
 equity under Mexican GAAP                                        229,349              --                --                --
                                                            -------------    ------------   ---------------    --------------
                                                                5,576,623       4,966,892         4,666,362           509,428
U.S. GAAP adjustments for:
   Effect on retained earnings from:
     Deferred income taxes                                     (1,248,991)       (323,938)         (525,377)          (57,356)
     Deferred employee statutory profit-sharing                  (167,021)        (30,569)          (12,453)           (1,360)
     Restatement of foreign sourced fixed assets                  (88,856)       (141,923)         (245,921)          (26,847)
     Goodwill                                                    (345,539)       (354,973)         (327,106)          (35,710)
     Accrued vacation cost                                         (3,751)        (17,062)          (29,524)           (3,223)
     Accrued severance payments                                        --          16,236                --                --
     Reversal of capitalized exchange losses and
      monetary position gains and related depreciation            (70,771)        (47,442)          (44,127)           (4,817)
   Effect on deficiency in restated shareholders'
    equity related to:
     Deferred income taxes                                        229,037          19,044            21,129             2,307
     Deferred employee statutory profit-sharing                     6,080           5,441             6,034               659
     Restatement of foreign source fixed assets                   915,605       1,061,321         1,759,142           192,046
   Minority interest applicable to above adjustments              (96,476)             --                --                --
                                                            -------------    ------------   ---------------    --------------
Shareholders' equity under U.S. GAAP                         Ps.4,705,940    Ps.5,153,027   Ps.   5,268,159    $      575,127
                                                            =============    ============   ===============    ==============


      The applicable effects of inflation on the above U.S. GAAP adjustments in
the reconciliation of net income that relate to monetary assets or liabilities
have been included in the corresponding adjustments.


                                      F-40






A summary of changes in shareholders' equity giving effect to the U.S. GAAP
adjustments described above is as follows:




                                                                                 Additional
                                                                                  Capital          Paid-in          Retained
                                                                                   Stock           Capital          Earnings
                                                                               --------------  ---------------   ---------------
                                                                                                        
Balance at January 1, 1999                                                     Ps.   861,981   Ps.   4,414,863   Ps.  (1,318,836)

Repurchase and sale of capital stock - net                                             (2,446)             393           (14,875)

Result from holding non-monetary assets                                                    --               --                --

Net income                                                                                 --               --           746,927
Effect on deficiency in restated shareholders'
 equity related to:
 Deferred income taxes                                                                     --               --                --
 Deferred employee statutory profit-sharing                                                --               --                --
   Restatement of foreign sourced fixed assets                                             --               --                --
Effect of minority interest on U.S.GAAP
   adjustments to shareholders' equity                                                     --               --                --
                                                                               --------------  ---------------   ---------------
Balance at December 31, 1999                                                          859,535        4,415,256          (586,784)

Repurchase and sale of common stock - net                                                 223            1,357                --
Result from holding non-monetary assets                                                    --               --                --
Net income                                                                                 --               --           207,590
Capital share increase                                                                  1,942           40,320                --
Acquisition of minority interest                                                       16,519          341,763                --
Effect on deficiency in restated shareholders'
 equity related to:
   Deferred income taxes                                                                   --               --                --
   Deferred employee statutory profit-sharing                                              --               --                --
   Restatement of foreign sourced fixed assets                                             --               --                --
Effect of minority interest on U.S.GAAP adjustments
 to shareholders' equity                                                                   --               --                --
                                                                               --------------  ---------------   ---------------
Balance at December 31, 2000                                                          878,219        4,798,696          (379,194)






                                                                                               Accumulated
                                                                                                  Other                 Total
                                                                                               Comprehensive         Shareholders'
                                                                               Reserves            Income                Equity
                                                                            ---------------   ---------------    ---------------
                                                                                                        
Balance at January 1, 1999                                                  Ps.   1,034,273   Ps.    (999,449)   Ps.   3,992,832

Repurchase and sale of capital stock - net                                            5,756                --
                                                                                                                         (11,172)
Result from holding non-monetary assets                                                  --
                                                                                                     (517,565)          (517,565)
Net income                                                                               --                --            746,927
Effect on deficiency in restated shareholders'
 equity related to:
 Deferred income taxes                                                                   --             1,954              1,954
 Deferred employee statutory profit-sharing                                              --               559                559
   Restatement of foreign sourced fixed assets                                           --           511,982            511,982
Effect of minority interest on U.S.GAAP
   adjustments to shareholders' equity                                                   --           (19,577)           (19,577)
                                                                            ---------------   ---------------    ---------------
Balance at December 31, 1999                                                      1,040,029        (1,022,096)         4,705,940

Repurchase and sale of common stock - net                                             5,940                --              7,520
Result from holding non-monetary assets                                                  --          (200,127)          (200,127)
Net income                                                                               --                --            207,590
Capital share increase                                                                   --                --             42,262
Acquisition of minority interest                                                         --                --            358,282
Effect on deficiency in restated shareholders'
 equity related to:
   Deferred income taxes                                                                 --          (209,993)          (209,993)
   Deferred employee statutory profit-sharing                                            --              (639)              (639)
   Restatement of foreign sourced fixed assets                                           --           145,716            145,716
Effect of minority interest on U.S.GAAP adjustments
 to shareholders' equity                                                                 --            96,476             96,476
                                                                            ---------------   ---------------    ---------------
Balance at December 31, 2000                                                      1,045,969        (1,190,663)         5,153,027




                                      F-41









                                                                                                     Additional
                                                                                     Capital        Paid - in         Retained
                                                                                      Stock          Capital          Earnings
                                                                                   -----------     ------------     -------------
                                                                                                           
Sale of capital stock - net                                                                714               69                --
Result from holding non-monetary assets                                                     --               --                --
Net income                                                                                  --               --           310,351
Dividends declared                                                                          --         (246,931)               --
Shareholders' equity adjustment for
  labor obligations upon retirement                                                         --               --                --
Effect on deficiency in restated shareholders'
  equity related to:
   Deferred income taxes                                                                    --               --                --
   Deferred employee statutory profit-sharing                                               --               --                --
   Restatement of foreign sourced fixed assets                                                               --                --
                                                                                   -----------     ------------     -------------
Balance at December 31, 2001                                                       Ps. 878,933     Ps.4,551,834     Ps.   (68,843)
                                                                                   ===========     ============     =============





                                                                                                   Accumulated
                                                                                                      Other            Total
                                                                                                  Comprehensive     Shareholders'
                                                                                    Reserves          Income           Equity
                                                                                  ------------   --------------     -------------
                                                                                                           
Sale of capital stock - net                                                             19,045               --            19,828
Result from holding non-monetary assets                                                     --         (625,212)         (625,212)
Net income                                                                                  --               --           310,351
Dividends declared                                                                          --               --          (246,931)
Shareholders' equity adjustment for
  labor obligations upon retirement                                                         --          (43,403)          (43,403)
Effect on deficiency in restated shareholders'
  equity related to:
   Deferred income taxes                                                                    --            2,085             2,085
   Deferred employee statutory profit-sharing                                               --              593               593
   Restatement of foreign sourced fixed assets                                              --          697,821           697,821
                                                                                  ------------   --------------     -------------
Balance at December 31, 2001                                                      Ps.1,065,014   Ps. (1,158,779)    Ps.,5,268,159
                                                                                  ============   ==============     =============



                                      F-42






      a) DEFERRED INCOME TAXES AND EMPLOYEE STATUTORY PROFIT-SHARING - As
         mentioned in Note 1 to the consolidated financial statements, beginning
         January 1, 2000, the Company changed its method of accounting for
         income tax, tax on assets and employee statutory profit-sharing under
         Mexican GAAP to conform with the new Bulletin D-4.

         D-4 requires the use of the asset and liability method of accounting
         for deferred income tax and employee statutory profit-sharing. Under
         such method, deferred tax assets and liabilities are recognized for the
         estimated future tax consequences attributable to differences between
         the financial statement carrying amount and their respective tax bases.
         This method also requires the recognition of future tax benefits, such
         as those arising from tax loss carryforwards, to the extent the
         realization of such benefits is highly likely. Deferred tax assets and
         liabilities are measured using enacted tax rates expected to apply to
         taxable income in the years in which those temporary differences are
         expected to be recovered or settled. The effect on deferred tax assets
         and liabilities of a change in the tax rates is recognized in income in
         the period that includes the enactment date. A deferred tax asset is
         also recognized for the unused portion of tax credits, such as tax on
         assets, to the extent the realization of such tax credit is highly
         likely. When, in accordance with accounting principles generally
         accepted in Mexico, items related to temporary differences are recorded
         directly to shareholders' equity, without affecting net income, the
         deferred effects of such items are also recorded directly to
         shareholders' equity. D-4 also requires that when there is a tax regime
         that recognizes totally or partially the effects of inflation and this
         causes the tax effect of the temporary differences to be restated, the
         change in deferred tax arising from the restatement for inflation
         should be included in the monetary result of the period.

         Through December 31, 1999, deferred income taxes under Mexican GAAP
         were provided only for identifiable, nonrecurring timing differences,
         which were expected to reverse over a definite period of time.

         For U.S. GAAP purposes, the Company applies Statement of Financial
         Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
         109").

         Under SFAS No. 109, deferred income taxes reflect the net tax effect of
         (a) temporary differences between the carrying amounts of assets and
         liabilities for financial reporting purposes and the amounts used for
         income tax purposes and (b) the benefits of operating loss and tax
         credit carryforwards. Under SFAS No. 109, the effect on deferred taxes
         of a change in tax rates is recognized as income or expense, as the
         case may be, in the period that includes the enactment date.

         During the year ended December 31, 2001, the valuation allowance for
         income tax purposes associated with certain net operating losses and
         tax credits carryforwards increased by $249,270, because the Company
         believes it is more likely than not that such deferred tax asset will
         not be realized.

         The Company calculates a deferred employee statutory profit-sharing
         liability for U.S. GAAP purposes based on temporary differences between
         the financial reporting basis and the employee statutory profit-sharing
         basis of assets and liabilities for those subsidiaries of the Company
         which have employees. Through December 31, 1999, under Mexican GAAP,
         deferred employee statutory profit-sharing was not recognized in the
         financial statements; however, with the adoption of D-4, beginning
         January 1, 2000 the Company recognizes deferred statutory
         profit-sharing as described above. During the year ended December 31,
         2001, the valuation allowance for deferred profit sharing assets
         associated with certain tax losses carryforwards increased by $45,932
         because the Company believes it is more likely than not that such
         deferred tax asset will not be realized.

         Under U.S. GAAP the portion of deferred taxes and deferred employee
         statutory profit-sharing attributable to the excess (deficiency) in
         restated shareholders' equity is reflected as an adjustment to the
         excess (deficiency) in restated shareholders' equity.

         Under Mexican GAAP, employee statutory profit-sharing expense or
         benefit is included in provisions after operating income. Under U.S.
         GAAP, employee statutory profit-sharing expense or benefit is treated
         as a component of operating expenses.

         Under Mexican GAAP deferred tax assets and liabilities are of a
         long-term nature, whereas under U.S. GAAP they are classified based on
         the nature of the temporary difference.



                                      F-43






         Under U.S. GAAP, temporary differences and the resulting deferred tax
         assets and liabilities at December 31, 2000 and 2001 are summarized as
         follows:



                                                                                             December 31,
                                                                                    -------------------------------
                                                                                        2000             2001
                                                                                    -------------    --------------
                                                                                               
         Current deferred tax liabilities - Inventories                             Ps.  (343,983)   Ps.   (344,344)
                                                                                    -------------    --------------

         Current deferred tax assets:
           Accrued expenses and reserves                                                   52,078           103,931
           Allowance for doubtful accounts                                                 26,090            34,315
                                                                                    -------------    --------------
              Total current deferred tax assets                                            78,168           138,246
                                                                                    -------------    --------------

         Non-current deferred tax liabilities:
           Property, plant and equipment                                               (1,021,252)       (1,298,176)
           Investments in associated companies                                             (8,920)            -
           Other                                                                          (46,129)          (45,871)
                                                                                    -------------    --------------
              Total non-current deferred tax liabilities                               (1,076,301)       (1,344,047)
                                                                                    -------------    --------------

         Non-current deferred tax assets - Net operating losses and tax credits           524,932           794,923
                                                                                    -------------    --------------

         Valuation allowance                                                             (272,309)         (521,579)
                                                                                    -------------    --------------

         Net deferred tax liability                                                 Ps.(1,089,493)   Ps  (1,276,801)
                                                                                    =============    ==============




         The components of deferred employee statutory profit-sharing at
         December 31, 2000 and 2001 are summarized as follows:




                                                                                             December 31,
                                                                                    -------------------------------
                                                                                           2000              2001
                                                                                    -------------    --------------

                                                                                               
         Current deferred tax liabilities - Inventories                             Ps.   (54,724)   Ps.    (69,587)
                                                                                    -------------    --------------

         Current deferred tax assets:
           Accrued expenses and reserves                                                   15,311            19,416
           Allowance for doubtful accounts                                                  7,090             3,896
                                                                                    -------------    --------------
              Total current deferred tax assets                                            22,401            23,312
                                                                                    -------------    --------------

         Non-current deferred tax liabilities:
           Property, plant and equipment                                                 (125,474)          (78,471)
           Other                                                                           10,924            16,421
                                                                                    -------------    --------------
                                                                                         (125,474)          (94,892)
                                                                                    -------------    --------------

         Non-current deferred tax assets - Net operating losses                                --            54,076
                                                                                    -------------    --------------

         Valuation allowance                                                                   --           (45,932)
                                                                                    -------------    --------------

         Net deferred employee statutory profit - sharing liability                 Ps.  (168,718)   Ps.   (133,023)
                                                                                    =============    ==============



      b) MINORITY INTEREST - Under Mexican GAAP, the minority interest in
         consolidated subsidiaries is presented as a separate component within
         the shareholders' equity section in the consolidated balance sheet. For
         U.S. GAAP purposes, the minority interest is not included in
         shareholders' equity.

      c) RESTATEMENT OF FOREIGN SOURCED FIXED ASSETS - Effective January 1,
         1997, the Company adopted the Fifth Amendment to Bulletin B-10 which
         allows foreign sourced fixed assets to be restated for inflation using
         either of two methodologies. Under the first methodology, foreign
         sourced fixed assets are restated by applying Mexican NCPI factors to
         the original cost of the asset, denominated in pesos. The alternate
         methodology, which is utilized by the Company, restates foreign sourced
         fixed assets by applying the inflation factor of the country of origin
         to the original cost, denominated in the foreign currency, and then
         translating such amounts into pesos at the foreign exchange rate in
         effect at the most recent balance sheet date.



                                      F-44






         The alternate methodology is not consistent with Regulation S-X, Rule
         3-20(e) of the Securities and Exchange Commission. Accordingly, foreign
         sourced fixed assets have been restated using the Mexican NCPI applied
         to original cost (the balance of the related assets at December 31,
         1997 or historical cost if acquired subsequent to 1997), in pesos, for
         purposes of the U.S. GAAP reconciliation.

      d) GOODWILL - In 1992 and 1995, the Company recorded goodwill in
         connection with the acquisition of three entities under common control
         in accordance with Mexican GAAP. Under U.S. GAAP, such transactions
         would be accounted for in a manner similar to that of a pooling of
         interests and, accordingly, the unamortized excess of the amount paid
         over the net book value of net assets acquired has been recognized as a
         reduction to equity and the amortization expense for Mexican GAAP has
         been reversed for U.S. GAAP purposes. Also, in December 2000, the
         Company recognized in the results of operations under Mexican GAAP the
         negative goodwill that arose from the acquisition of a minority
         interest of a consolidated associated company. For U.S. GAAP purposes,
         the Company has reversed the negative goodwill recognized into income
         and has reduced the recorded value of non-current assets.

         As mentioned in Note 1, beginning 2001, the Company began to include as
         part of other income and expense in the statements of income prepared
         under Mexican GAAP, the amortization of the excess of cost over fair
         value of net assets acquired. The consolidated statements of income of
         prior years were reclassified in order to conform them with the
         presentation utilized in 2001. For U.S. GAAP purposes the amortization
         of goodwill should be reported as part of operating income.
         Accordingly, Ps.78,014, Ps.(4,156) and Ps.90,111 would have to be
         recorded as a decrease (increase) of operating income for the years
         ended December 31, 1999, 2000 and 2001, respectively. This difference
         does not have an effect in the net income or earnings per share
         reported during the years ended December 31, 1999, 2000 and 2001.

      e) ACCRUED VACATION - Under Mexican GAAP, the Company does not accrue
         liabilities related to employees' rights to receive compensation for
         future absences. Statement of Financial Accounting Standards No. 43,
         "Accounting for Compensated Absences", requires that vacation benefits
         be accrued. For purposes of the U.S. GAAP reconciliation, the Company
         has accrued such liability as of December 31, of each year presented
         and recognized the related expense.

      f) ACCRUED SEVERANCE PAYMENTS - Under Mexican GAAP, the Company has
         accrued severance payments to be made to certain of its employees as a
         consequence of the restructuring of operations initiated at the end of
         2000 as described in Note 1. For U.S. GAAP purposes the Company has
         reversed such cost since at the date of the financial statements the
         Company had not communicated to the employees the type and amount of
         benefits they will receive upon termination.

      g) CAPITALIZATION OF INTEGRAL COST (INCOME) OF FINANCING - Under Mexican
         GAAP, total integral cost (income) of financing is subject to
         capitalization to assets under construction, including foreign exchange
         gains and losses, interest income and gains and losses from monetary
         position. In accordance with U.S. GAAP, foreign exchange gains and
         losses, interest income and monetary position gains and losses are not
         capitalizable. Consequently, such amounts capitalized under Mexican
         GAAP have been reversed and treated as income or expense, as
         appropriate, in the period incurred and current year depreciation has
         also been adjusted.

      h) OTHER DIFFERENCES AND SUPPLEMENTAL U.S. GAAP DISCLOSURES -

         1.  Extraordinary Items - Through December 31, 1999, under Mexican
             GAAP, the utilization of tax loss carryforwards and assets taxes
             paid in prior years was considered to be an extraordinary gain.
             Under U.S. GAAP, such amounts would be considered to be a component
             of income tax expense. Although this difference does not affect
             consolidated net income, it does affect the reported amount of
             income tax expense.

         2.  Cash flows - The Company presents its cash flow information, under
             Mexican GAAP, exclusive of the effects of inflation. Such
             information for the year ended December 31, 1999, 2000 and 2001 is
             presented below:




                                      F-45










                                                                            December 31,
                                                            --------------------------------------------
                                                               1999            2000             2001
                                                            ----------       ----------       ----------
                                                                                     
OPERATING ACTIVITIES:
  Consolidated net income-Mexican GAAP                      Ps.891,371       Ps.515,591       Ps.595,188
  Effects of inflation                                        (476,096)        (259,059)        (218,646)
                                                            ----------       ----------       ----------
  Consolidated net income exclusive of
    inflation- Mexican GAAP                                    415,275          256,532          376,542
  Adjustments to reconcile net (loss) income to net
   cash provided by operating activities:
    Depreciation and amortization                              435,414          428,762          602,837
    Statutory seniority premiums                                14,505           32,455           43,689
    Restructuring charge                                            --          524,000           83,505
    Equity in earnings of associated companies                  (1,120)              --               --
    Deferred taxes                                                  --         (263,523)         (28,456)
    Unrealized foreign exchange (gain) loss on
     current and long-term debt                                (96,435)          56,211         (185,225)
    Realized foreign exchange (gain) loss on
     current and long-term debt                                (69,924)          12,079           (9,404)
  Changes in operating assets and liabilities:
    Accounts receivable - net                                 (320,735)         (95,041)          (9,451)
    Inventories                                                 (1,956)        (252,171)         276,530
    Prepaid expenses                                            (4,177)          (5,374)          15,932
    Trade accounts payable                                     144,447           59,032             (949)
    Taxes payable, accrued expenses and
     other liabilities                                          18,722          (23,259)         163,344
                                                            ----------       ----------       ----------
    NET CASH PROVIDED BY OPERATING ACTIVITIES                  534,016          729,703        1,328,894
                                                            ----------       ----------       ----------

INVESTING ACTIVITIES:
  Acquisition of property, plant and equipment                (809,101)        (941,269)      (1,067,638)
  Loan to associated company                                   (94,383)          (1,121)              --
  Other assets                                                  61,385          (29,638)         110,356
  Increase in goodwill                                              --               --         (111,650)
  Acquisition of subsidiaries, net of cash received                 --           77,716               --
  Effect on cash of consolidating Tenedora                      44,910               --               --
                                                            ----------       ----------       ----------
  NET CASH USED IN INVESTING ACTIVITIES                       (797,189)        (894,312)      (1,068,932)
                                                            ----------       ----------       ----------


FINANCING ACTIVITIES:
  Payments of long-term debt                                   (74,992)         (40,760)        (282,154)
  Proceeds from long-term debt                                  63,760          768,294          732,772
  Payments of notes payable                                   (556,688)      (1,056,921)      (1,775,772)
  Proceeds from notes payable                                  653,373          479,469          918,166
  Repurchase and sale of capital stock - net                    (9,822)           6,861           19,427
  Capital stock increase                                            --           40,481               --
                                                            ----------       ----------       ----------
  NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES           75,631          197,424         (387,561)
                                                            ----------       ----------       ----------

  Net increase (decrease) in cash and cash equivalents        (187,542)          32,815         (127,599)
  Cash and cash equivalents at beginning of year               317,651          169,239          217,217
  Effect of inflation on cash                                   39,130           24,721            9,558
                                                            ----------       ----------       ----------
  Cash and cash equivalents at end of year                  Ps.169,239       Ps.226,775        Ps.99,176
                                                            ==========       ==========       ==========


         Supplemental Cash Flow Information Required by U.S. GAAP - Resources
         generated by operating activities in the statements of changes in
         financial position reflect cash payments of interest and income taxes
         as follows:



                                      F-46








                                                                                 Year Ended December 31,
                                                                  -------------------------------------------------
                                                                        1999            2000             2001
                                                                  --------------    -------------    --------------

                                                                                           
             Interest                                             Ps.    389,571    Ps.   399,386    Ps.    396,560
             Income taxes                                                     --               --                --


             In accordance with Mexican GAAP, acquisition of subsidiaries is
             shown net of cash received as an investing activity and the
             corresponding debt incurred in the acquisition is shown as a
             financing activity. Also, when material, acquisition of minority
             interest in exchange of own shares is shown as an investing and
             financing activity, respectively. Under U.S. GAAP, because such
             transactions are non-cash, it is necessary only to disclose
             non-cash investing and financing activities. Supplemental
             disclosure of non-cash investing and financing activities is as
             follows:




                                                                                 Year Ended December 31,
                                                                  -------------------------------------------------
                                                                        1999              2000          2001
                                                                  --------------    -------------    --------------
                                                                                            
             Fair value of net assets acquired                    Ps.         --    Ps.   708,014    Ps.         --
             Less: liabilities incurred                                       --          791,907                --
                                                                  --------------    -------------    --------------
             Acquisition of subsidiaries, net of cash acquired    Ps.         --    Ps.   (83,893)   Ps.         --
                                                                  ==============    =============    ==============

             Shares issued in exchange of minority interest       Ps.         --    Ps.   358,282    Ps.         --
                                                                  ==============    =============    ==============


             In accordance with Mexican GAAP, unrealized exchange losses on
             current and long-term debt are included as a financing activity in
             the statement of changes in financial position. Under U.S. GAAP,
             unrealized exchange losses on current and long-term debt would be
             reflected as non-cash expenses in operating activities and not as a
             financing activity.

             Also, under Mexican GAAP dividends declared and not paid are shown
             as resources used in and generated by financing activities,
             respectively. Under U.S. GAAP dividends declared but not paid are
             not included in the statement of cash flows.


         3.  Statement of Comprehensive Income - Statement of Financial
             Accounting Standards No. 130, "Reporting Comprehensive Income",
             establishes standards for reporting and display of comprehensive
             income and its components. The Company's statements of
             comprehensive income for the years ended December 31, 1999, 2000
             and 2001, giving effect to the U.S. GAAP adjustments described
             above, are set forth below:



                                      F-47










                                                                                                   Thousands of
                                                                                                   U.S. dollars
                                                                                                   (Convenience
                                                                   December 31,                    Translation)
                                                 ---------------------------------------------      December
                                                   1999             2000            2001            31, 2001
                                               -------------    -------------    -------------   --------------
                                                                                     
Net income under U.S. GAAP                     Ps.   746,927    Ps.   207,590    Ps.   310,352   $       33,881
Other comprehensive (loss) income:
  Result from holding nonmonetary assets
   as reported under Mexican GAAP                   (517,565)        (200,127)        (625,212)         (68,255)
  Adjustment from labor obligations
    upon retirement under Mexican GAAP                    --               --          (43,403)          (4,738)
  U.S. GAAP adjustments to result from
     holding nonmonetary assets                      494,918           31,560          700,501           76,474
                                               -------------    -------------    -------------   --------------
Total other comprehensive (loss) income              (22,647)        (168,567)          31,886            3,481
                                               -------------    -------------    -------------   --------------
Comprehensive income (loss) under U.S. GAAP    Ps. 724,280      Ps.  39,023      Ps. 342,238     $       37,362
                                               =============    =============    =============   ==============


             Accumulated other comprehensive loss at December 31, 1999, 2000 and
             2001, giving effect to the U.S. GAAP adjustments discussed above,
             consists of losses from holding nonmonetary assets of
             Ps.(1,022,096), Ps.(1,190,663) and Ps.(1,237,344), respectively.

         4.  Earnings Per Share in Accordance With U.S. GAAP - Statement of
             Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
             No. 128") requires the presentation of "basic" earnings per share,
             which is calculated by dividing income available to common
             shareholders by the weighted average number of shares outstanding
             during the period, and diluted earnings per share giving effect to
             all potentially dilutive common shares outstanding during the
             period.

             At December 31, 2000, the Company has not presented diluted
             earnings per share because there are no potentially dilutive
             securities outstanding. However, as discussed in Note 9, during
             1999, the Company established an executive share purchase program.
             Under SFAS No. 128, shares granted under this program would
             possibly be considered dilutive when and if granted.

             Earnings per share for each of the years in the three-year period
             ended December 31, 2001 is presented below:



                                      F-48









                                                                                                      Thousands of
                                                                                                      U.S. dollars
                                                                                                      (Convenience
                                                                   December 31,                       Translation)
                                                 ------------------------------------------------       December
                                                     1999              2000             2001            31, 2001
                                                 -------------    --------------    -------------    --------------

             Basic earnings per share:

                                                                                       
               B Shares                          Ps.   0.51    Ps.       0.14       Ps.   0.19        $   0.020
               CPOs                                    1.77              0.48       .     0.64            0.070
               GDS                                    10.64              2.87             3.84            0.419


             Weighted average shares outstanding (in 000's):
               Total shares                       1,343,064         1,347,664        1,504,383
               CPOs                                 322,381           336,219          375,318
               GDS                                   53,730            56,037           62,553


         5.  Restructuring Charge - In accordance with U.S. GAAP the
             restructuring charges should be reported as part of operating
             income. This difference does not have an effect in the net income
             or earnings per share reported during the year ended December 31,
             2001.

         6.  Impairment of long-lived assets and severance payments - In
             accordance with U.S. GAAP the adjustments arising from the
             impairment of long-lived assets and severance payments arising from
             restructurings or reorganizations which are included in other
             expenses for Mexican GAAP purposes should be reported as part of
             the operating income. This difference does not have an effect in
             the net income or earnings per share reported during the year ended
             December 31, 2001.

         7   Stock Option Program-- In accordance with the program (see Note 9)
             the exercise price is determined to be the closing price on the
             last trading day prior to May 1 of each year for the options
             granted for the previous year, therefore, there was no compensation
             expense recognized in the financial statements, in accordance with
             Accounting Principles Board Opinion No. 25, "Accounting for Stock
             Issued to Employees" ("APB 25"), for U.S. GAAP purposes.

             APB 25 requires that compensation expense for a stock option plan
             be measured using the intrinsic value method whereby compensation
             expense for a fixed plan is recognized in an amount equal to the
             excess of the market price of the underlying stock over the
             exercise price of the option at the grant date.

             Under Statement of Financial Accounting Standards No. 123
             "Accounting for Stock-Based Compensation," ("SFAS No. 123"), the
             Company presents the following additional required disclosures to
             the financial statements:



                                      F-49








             Pro Forma Effect of Stock Compensation Program - SFAS No. 123
             requires the disclosure of the Company's net income and net income
             per share, as if the Company had accounted for its employee stock
             option plan under the fair value method. For purposes of these pro
             forma disclosures, the estimated fair value of the options is
             amortized over the options' vesting period. Had the Company's stock
             option program been accounted for under SFAS No. 123, the net
             income for U.S. GAAP at December 31, 1999, 2000 and 2001 would have
             been decreased by Ps.17,087, Ps.16,708 and Ps.10,080, respectively.


             Earnings per share for each of the years in the three-year period
ended December 31, 2001 is presented below:




                                                                                                    Thousands of
                                                                                                    U.S. dollars
                                                                                                    (Convenience
                                                                   December 31,                     Translation)
                                                 ------------------------------------------------     December
                                                     1999             2000             2001           31, 2001
                                                 -------------    --------------    -------------   ------------
                                                                                        
             Basic earnings per share:

               B Shares                          Ps.      0.49    Ps.       0.13    Ps.   0.18      $   0.020
               CPOs                                       1.69              0.44          0.62          0.068
               GDS                                       10.15              2.64          3.71          0.406


             Weighted average shares outstanding (in 000's):
               Total shares                          1,343,064         1,347,664     1,504,383
               CPOs                                    322,381           336,219       375,318
               GDS                                      53,730            56,037        62,553


             The fair value of the options granted used in order to calculate
             the pro forma amounts above, have been estimated at the date of
             grant using the Black-Scholes option-pricing model with the
             following assumptions: i) expected life of 7 years and expected
             volatility of 44.0%, ii) risk free rate of 5.32% and 6.36% for
             options granted during 1999 and 2000, respectively, and iii) no
             expected dividend yield. Based on these assumptions, the weighted
             average fair value of employee stock options granted during 1999
             and 2000 was Ps.1.94 and Ps.1.55 per share (in nominal pesos),
             respectively, and the market price on the grant date was Ps.4.13
             and Ps.2.72, respectively

             The Black-Scholes option valuation model was developed for use in
             estimating the fair value of traded options that have no vesting
             restrictions and are fully transferable. In addition, option
             valuation models require the input of highly subjective
             assumptions, including the expected stock price volatility. The
             Company's options have characteristics significantly different from
             those of traded options, and changes in the subjective input
             assumptions can materially affect the fair value estimate.

         8.  Recently Issued Accounting Standards - In June 2001, the Financial
             Accounting Standards Board ("FASB") issued Statement of Financial
             Accounting Standards No. 141, "Business Combinations" ("SFAS 141")
             and Statement of Financial Accounting Standards No. 142, "Goodwill
             and Other Intangible Assets" ("SFAS 142"). SFAS 141 addresses
             financial accounting and reporting for business combinations and
             requires that the purchase method of accounting be used for all
             business combinations initiated or completed after June 30, 2001.
             Under SFAS 142, goodwill and certain other intangible assets with
             indefinite useful lives will no longer be systematically amortized,
             but instead will be tested for impairment at least annually and
             written-down with a charge to operations when the carrying amount
             exceeds the estimated fair value. SFAS 142 is effective for fiscal
             years beginning after December 15, 2001. The Company's management
             has not completed the initial impairment review




                                      F-50





             required by SFAS 142. However, management believes that the
             adoption of SFAS 142 will reduce substantially the amortization
             expense of future years.

             In August 2001, the FASB also issued Statement of Financial
             Accounting Standards No. 143, "Accounting for Obligations
             Associated with the Retirement of Long-Lived Assets" ("SFAS 143").
             SFAS 143 establishes accounting standards for the recognition and
             measurement of an asset retirement obligation and its associated
             asset retirement cost. It provides accounting guidance for legal
             obligations associated with the retirement of tangible long-lived
             assets. It requires the recognition of the fair value of a
             liability for an asset retirement obligation in the period in which
             it is incurred if a reasonable estimate of fair value can be made.
             SFAS 143 is effective for fiscal years beginning after June 15,
             2002, with early adoption permitted. Management is currently
             evaluating the effects of adopting SFAS 143, but believes it will
             not have a material effect on the Company's results of operations
             and financial position. In addition, in October 2001, the FASB
             issued Statement of Financial Accounting Standards No. 144,
             "Accounting for the Impairment or Disposal of Long-Lived Assets"
             ("SFAS 144"). SFAS 144 establishes a single accounting model for
             the impairment or disposal of long-lived assets, including
             discontinued operations. SFAS 144 is effective for fiscal years
             beginning after December 15, 2001. Management is currently
             evaluating the effects of adopting SFAS 144, but believes it will
             not have a material effect on the Company's results of operations
             or financial position.

             In April 2002, the FASB issued SFAS No 145, "Recission of FASB
             Statements Nos. 4, 44 and 64, Amendment of FASB Statement No. 13,
             and Technical Corrections." As a result of this statement, The
             Company may no longer classify gains and losses from
             extinguishments of debt as extraordinary items unless the debt
             meets the criteria of APB 30. The provisions of this statement with
             regard to FAS 4 will be effective for fiscal years beginning after
             2002. Gains and losses from extinguishments of debt that have been
             classified as extraordinary in previous years that do not meet the
             criteria of APB 30 will be reclassified.

             During 2000 and 2001, the Emerging Issues Task Force ("EITF")
             addressed various issues related to the income statement
             classification of certain promotional payments. In April 2001, the
             EITF reached a consensus on Issue 00-14: "Accounting for Certain
             Sales Incentives" which addresses the recognition, measurement, and
             income statement classification for sales incentives offered
             voluntarily by a vendor without charge to customers that can be
             used in, or that are exercisable by a customer as a result of, a
             single exchange transaction. Sales incentives have various forms
             including discounts, coupons, rebates, and free products or
             services. Under the consensus, it is required that if the sales
             incentive is a free product delivered at the time of sale, the cost
             of the product or service should be classifies as an expense.
             However, the reduction in or refund of the selling price of the
             products resulting from any cash sales incentives should be
             classified as a reduction of revenue. EITF 00-14 should be applied
             for annual or interim periods beginning after December 15, 2001. In
             January, 2001 the EITF reached a consensus on Issue 00-22:
             "Accounting for "Points" and Certain Other Time-Based or
             Volume-Based Sales Incentive Offers for Free Products or Services
             to be Delivered in the Future". EITF 00-22 requires that cash
             rebates or refund obligations should be recognized as a reduction
             of revenue based on a systematic and rational allocation of the
             cost of honoring them. EITF 00-22 is applied for quarters ended
             after February 15, 2001. In April 2001, the EITF reached a
             consensus on Issue 00-25: "Vendor Income Statement Characterization
             of Consideration Paid to Reseller of the Vendor's Products". EITF
             00-25 addresses the income statement classification, other than
             that addressed in EITF 00-14, from a vendor to a reseller or
             another party that purchases the vendor's products. EITF 00-25
             requires that any consideration from a vendor to a reseller of its
             products is presumed to be a reduction of the selling price of the
             vendor's products and should be characterized as a reduction of
             revenue in the vendor's income statement. Such EITF, also
             establishes the conditions under which the consideration could be
             characterized as a cost incurred. EITF 00-25 should be applied for
             annual or interim periods beginning after December 15, 2001. In
             November of 2001, EITF codified Issues 00-14, 00-22 and 00-25 as
             Issue 01-9: "Accounting for a Consideration Given by a Vendor to a
             Reseller of the Vendor's Products". Management is currently
             evaluating the effects of adopting EITF 00-14 and 00-25, but
             believes it will not have a material effect on the Company's
             results of operations or financial position. Adoption of EITF 00-22
             did not have a material effect in the results of operation or
             financial position.


                                      F-51






             The adoption of Statement of Accounting Standards No. 133,
             "Accounting for Derivative Instruments and Hedging Activities"
             ("SFAS No. 133"), as amended by SFAS 138 did not have a material
             effect on the results of operations, financial position and cash
             flows of the Company on January 1, 2001, the date of adoption. SFAS
             No. 133 establishes accounting and reporting standards for
             derivative instruments, including certain derivative instruments
             embedded in other contracts (collectively referred to as
             derivatives) and for hedging activities. SFAS No. 133 requires an
             enterprise to recognize all derivatives as either assets or
             liabilities in the statement of financial position and measure
             these instruments at fair value.




                                      F-52







PEPSI-GEMEX, S. A. DE C. V. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS SUPPLEMENTAL SCHEDULE VALUATION AND QUALIFYING
ACCOUNTS YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001 (Thousands of Mexican
Pesos of Purchasing Power of December 31, 2001)









                                                  BALANCE AT                                           BALANCE AT
                                                 THE BEGINNING                                         THE END OF
DESCRIPTION                                      OF THE PERIOD       ADDITIONS       DEDUCTIONS        THE PERIOD
                                                                                           
Allowance for Doubtful Accounts:

  Year Ended December 31, 1999                      30,514            18,551            7,644            41,421
  Year Ended December 31, 2000                      41,421            31,892            6,243            67,070
  Year Ended December 31, 2001                      67,070            66,501           26,743           106,828




                                   * * * * * *




                                      F-53

EX-99.A.9

                                                                  Exhibit (a)(9)
- --------------------------------------------------------------------------------
                                                                File No. 1-12858

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    --------

                                    FORM 6-K

                        REPORT OF FOREIGN PRIVATE ISSUER
                    PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                           FOR THE MONTH OF JULY 2002

                                    --------

                           PEPSI-GEMEX, S.A. DE C.V.
             (Exact name of registrant as specified in its charter)

                                    --------

                             Avenida Acoxpa No. 69
                           Col. San Lorenzo Huipulco
                               Delegacion Tlalpan
                               14370 Mexico, D.F.
                                     Mexico
                    (Address of principal executive offices)

                                    --------

       (Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)

                        Form 20-F   x     Form 40-F
                                   ---               ---

       (Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)

                              Yes                No   x
                                   ---               ---

       If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
                                                 ---

- --------------------------------------------------------------------------------

                            Exhibit Index on Page 4

                                  Page 1 of 12

                                       I

       Pepsi-Gemex, S.A. de C.V. (the "Company") has filed with the Mexican
National Banking and Securities Commission (Comision Nacional Bancaria y de
Valores; the "CNBV") a quarterly financial report, which report is in Spanish
and is publicly available at the CNBV or, upon written request, from the
Company. Certain of the financial information contained in the CNBV filing is
summarized in the exhibit attached to this Form 6-K.

                                       II

In addition, the following document is furnished in accordance with the
requirements of Form 6-K.

The press release of the Company, dated July 25, 2002.


                                  Page 2 of 12




                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: July 26, 2002                      Pepsi-Gemex, S.A. de C.V.

                                          By: /s/ Luis Alejandro Bustos Olivares
                                             -----------------------------------
                                              Luis Alejandro Bustos Olivares
                                              Authorized Signatory






























                                  Page 3 of 12



                                 EXHIBIT INDEX



EXHIBIT NO.                          DESCRIPTION                            PAGE
- -----------                          -----------                            ----
                                                                      

   1.                     Press release, dated July 25, 2002, of the         5
                          Company reporting financial performance and
                          activities for the second quarter of fiscal
                          year 2002.




























                                  Page 4 of 12

                                                              [PEPSI-GEMEX LOGO]

PRESS RELEASE
- -------------

Contact: Irma Montemayor      Acoxpa 69
Pepsi-Gemex, S.A. de C.V.     Col. San Lorenzo Huipulco
Phone: (52 555) 627-8610      14370 Mexico, D.F.
Fax: (52 555) 627-8613        Phone: 627-8600
email: imontemayor@pepsigemex.com.mx


          PEPSI-GEMEX ANNOUNCES A 10.0% INCREASE IN TOTAL REVENUES, A
         17.0% INCREASE IN GROSS PROFIT, A 37.9% INCREASE IN OPERATING
                      INCOME AND A 31.1% INCREASE IN EBITDA

             OPERATING MARGIN REACHED 14.4% FOR THE SECOND QUARTER

      ANNOUNCES A 8.8% INCREASE IN UNIT CASE VOLUME AND 14.4% INCREASE IN
                JUG WATER VOLUME FOR THE SECOND QUARTER OF 2002

July 25, 2002 (Mexico City, Mexico) -- Pepsi-Gemex, S.A. de C.V., (NYSE: GEM),
the second largest Pepsi bottler outside the United State and sole anchor
bottler for Pepsi-Cola in Mexico, today reported its financial results for the
second quarter and first six months of 2002.

"Despite the challenging economic environment, I am pleased with the strong
volume growth we produced across all of our product portfolio," said Mr. Enrique
C. Molina S., Chairman of the Board of Pepsi-Gemex. Mr. Molina continued, "The
initiatives we took throughout 2000 and 2001 to streamline our operations
enabled us to improve profitability levels during the second quarter."

SECOND QUARTER VOLUMES
- ----------------------

Soft drink and purified water (PET presentations) unit sales volume for the
second quarter of 2002 increased 8.8%, reaching 107.2 million unit cases. Soft
drink sales volume increased 6.1% during the second quarter and PET
presentations of purified water sales volume increased 39.3% during the same
period. The non-returnable portion of the soft drink and purified water mix
represented 93.3% of total volume during the second quarter of the year. Our
enhanced execution capabilities have led to growth in horizontal distribution,
which, coupled with seasonally high temperatures, resulted in our strong
performance in volumes.











                                       1
                                  Page 5 of 12

The Company sold 30.0 million five-gallon jugs of Electropura purified water
during the second quarter of 2002, a 14.4% increase in volume over the
comparable previous year period.

FIRST SIX MONTHS VOLUMES

Soft drink and purified water (PET presentations) unit sales volume for the
first six months of 2002 increased 9.2%, reaching 197.2 million unit cases.
Soft drink sales volume increased 7.3% during the first half of 2002 and PET
presentations of purified water sales volume increased 29.4% during the same
period.

The Company sold 53.5 million five-gallon jugs of Electropura purified water
during the first six months of 2002, a 10.7% increase in volume over the
comparable previous year period.

As part of its ongoing efforts to strengthen its position in the Mexican
beverage market, Pepsi-Gemex continued to implement new marketing initiatives
to reinforce brand presence through a combination of permanent point of sale
material coupled with an aggressive out-door program.

All data in the financial statements has been restated in constant Mexican
pesos (Ps.) in purchasing power as of June 30, 2002.

SECOND QUARTER RESULTS

Total revenues for the quarter increased 10.0%, to PS.3,308 million, which
include approximately Ps.436.8 million of Electropura five-gallon jug revenues.

Gross profit increased 17.0% and was Ps.1,969 million. Gross margin as a
percentage of total revenues reached 59.5% from 56.0% during the comparable
year-ago period, primarily as a result of higher purified water sales and
favourable negotiations of our quarterly supply of resin.

Operating income increased 37.9% or Ps.132 million, reaching Ps.478 million.
Operating income as a percentage of total revenues increased almost three
percentage points, reaching 14.4% during the second quarter 2002.

EBITDA increased 31.1% or Ps.153 million, reaching Ps.644 million for the second
quarter and EBITDA as a percentage of total revenues reached 19.5%.

Other expenses for the quarter were Ps.46.4 million, which include severance
payments for Ps.6.2 million, asset write-offs for Ps.14.0 million and goodwill
amortization for Ps.26.2 million.

                                       2
                                  Page 6 of 12

Integral cost of financing was Ps.396 million for the quarter. Foreign exchange
loss was Ps.358 million due to a devaluation of the peso, which had an exchange
rate at the end of June of Ps.9.965 pesos per dollar, compared to Ps.9.015
pesos per dollar at the end of March. The second quarter inflation rate
resulted in a monetary gain of Ps.28.2 million. For the second quarter,
interest paid was Ps.66.5 million and interest earned was Ps.0.3 million.

Net loss after tax was Ps.57 million for the second quarter of 2002, mainly due
to the impact of the foreign exchange loss.

FIRST SIX MONTHS RESULTS

Total revenues for the first six months of 2002 increased 9.2%, to Ps.6,003
million, which include approximately Ps.781.7 million of Electropura
five-gallon jug revenues.

Gross profit increased 12.5% and was Ps.3,530 million. Gross margin as a
percentage of total revenues increased to 58.8% from 57.1% during the
comparable year-ago period.

Operating income increased 26.2% or Ps.161 million and reached Ps.776 million.
Operating income as a percentage of total revenues increased almost two
percentage points, reaching 12.9% during the first six months of 2002.

For the first six months, EBITDA increased 19.3% or Ps.176 million, reaching
Ps.1,087 million, and EBITDA as a percentage of total revenues reached 18.1%.

Other expenses were Ps.83.8 million, which include severance payments for
Ps.16.0 million, asset write-offs for Ps.14.0 million and goodwill amortization
for Ps.53.8 million.

Integral cost of financing was Ps.356 million for the first six months of 2002.
Foreign exchange loss was Ps.300.7 million due to a devaluation of the peso,
which had an exchange rate at the end of June of Ps.9.965 pesos per dollar,
compared to Ps.9.16 pesos per dollar at the end of December. The first six
months inflation rate resulted in a monetary gain of Ps.83.2 million. For the
first six months of the year, interest paid was Ps.141.9 million and interest
earned was Ps.3.0 million.

Net income after tax for the first six months of 2002 was Ps.179 million or
US$18 million, equivalent to US$0.21 per GDS.

Total outstanding debt at the end of June 2002 was reduced to US$324 million
from US$363 million at the end of December, 2001. Cash and cash equivalents was
Ps.281.7 million.



                                       3

                                  Page 7 of 12


During the first six months of 2002, Pepsi-Gemex made capital expenditures of
approximately US$27 million in several categories.

              POTENTIAL TRANSACTION WITH THE PEPSI BOTTLING GROUP
              ---------------------------------------------------

Pepsi-Gemex has been informed by Mr. Molina that he is currently engaged in
discussions with The Pepsi Bottling Group concerning PBG's potential tender
offer for all of the shares of Pepsi-Gemex. Currently, these negotiations are
primarily focusing on pricing matters. There can be no assurance that Mr.
Molina, PBG and PepsiCo will reach agreement, or that PBG will proceed with any
transaction with respect to Pepsi-Gemex's shares.

                                      ###

Pepsi-Gemex's current operations encompass the Mexico City metropolitan area,
and portions of the adjacent states of Mexico, Hidalgo, Queretaro and
Guanajuato, the southwestern states of Guerrero and Morelos, the southeastern
states of Campeche, Yucatan and Quintana Roo, the central states of
Aguascalientes, Zacatecas, Durango and San Luis Potosi, and the Northeastern
states of Nuevo Leon, Coahuila, Tamaulipas and portions of the states of
Chihuahua and Veracruz.

Pepsi-Gemex is one of Mexico's largest soft drink producers. The Company
produces Pepsi, Mirinda, KAS, Seven-Up, Manzanita Sol, Power Punch, Garci
Crespo and San Lorenzo mineral waters and Squirt. The Company also offers
Seagram products to its customers and owns Mexico's largest purified water
company, Electropura. Pepsi-Gemex shares trade on the Mexican Stock Exchange
and the New York Stock Exchange.

This release may contain forward-looking statements. Such forward-looking
statements, which reflect the Company's current views of future events and
financial performance, involve known and unknown risks and uncertainties that
may cause the Company's actual results to be materially different from planned
or expected results. Those risks and uncertainties include but are not limited
to: competition, consumer demand, seasonality, economic conditions and
government activity. Investors should take such risks into account when making
investment decisions.

ADDITIONAL INFORMATION
- ----------------------

If the proposed tender offers are commenced, the Company will file a
solicitation/recommendation statement on Schedule 14D-9 and related materials
with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THIS DOCUMENT IF FILED BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders


                                       4

                                  Page 8 of 12




may obtain a free copy of the Schedule 14D-9 (if filed) and other documents
filed by the Company with the Commission at the Commission's reference room at
400 Fifth Street, N.W., Washington, D.C. 20049.

If you would like more information, or if you wish to obtain free copies of the
Schedule 14D-9 (if filed with the Commission), you can direct your request to:


                                     # # #

In Mexico:          Irma Montemayor
                    Pepsi-Gemex, S.A. de C.V.
                    011-52-555-627-8610
                    E-mail: imontemayor@pepsigemex.com.mx

Outside Mexico:     Jonathan Wolfe
                    The Abernathy MacGregor Group
                    212-371-5999
                    E-mail:  jcw@abmac.com

TO OFFER YOU THE OPPORTUNITY TO DISCUSS SECOND QUARTER 2002 RESULTS WITH
PEPSI-GEMEX'S SENIOR MANAGEMENT, YOU ARE INVITED TO PARTICIPATE IN A
TELECONFERENCE ON FRIDAY, JULY 26, 2002, AT 1:00 PM (EASTERN DAYLIGHT TIME). TO
REGISTER FOR THE TELECONFERENCE PLEASE DIAL DIRECTLY IN THE U.S. AND CANADA
888-665-4799 OR OUTSIDE THE U.S. CALL 706-645-0410. A REPLAY OF THE CALL WILL BE
MADE AVAILABLE FROM JULY 26TH AT 3:00 PM (EASTERN DAYLIGHT TIME) UNTIL AUGUST 02
AT 12:00 AM (EASTERN DAYLIGHT TIME). DIAL TOLL-FREE IN THE UNITED STATES AT
800-642-1587 OR OUTSIDE THE U.S. CALL 706-645-9291 (RESERVATION NUMBER FOR THE
REPLAY IS 4786285).


                                       5
                                  Page 9 of 12

PEPSI-GEMEX, S.A. DE C.V.
CONSOLIDATED STATEMENTS OF INCOME

IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF JUNE 30, 2002
(9.965 PESOS=US$1.00)



                                   3 Months Ended                     3 Months Ended
                                   June 30, 2002         %            June 30, 2001         %
                                   -------------       ------         -------------       ------
                                                                              
Total Volume (MM's 8oz. Cases)       107.2                               98.5
Soft Drinks (MM's 8oz. Cases)         96.0                               90.5
Bottled Water (MM's 8oz. Cases)       11.2                                8.0

Water Jug (MM's 19 Lts. Jugs)         30.0                               26.2

Total Revenues                     3,308               100.0%         3,006               100.0%
Cost of Sales                      1,339                40.5%         1,323                44.0%
Gross Profit                       1,969                59.5%         1,683                56.0%
Operating Expenses                 1,325                40.0%         1,192                39.7%

EBITDA(1)                            644                19.5%           491                16.3%

Depreciation & Amortization          166                 5.1%           145                 4.8%

Operating Income                     478                14.4%           346                11.5%

Other Expenses                        46                 1.4%            25                 0.8%
Integral Cost of Financing           396                12.0%           (85)               -2.8%
  Net interest expense                66                 2.0%           120                 4.0%
  Foreign exchange loss (gain)       358                10.8%          (164)               -5.5%
  Monetary position gain             (28)               -0.8%           (41)               -1.3%

Income before tax                     36                 1.0%           406                13.5%
Deferred tax                          52                 1.5%            77                 2.6%
Tax                                   41                 1.2%            82                 2.7%

Net Income                           (57)               -1.7%           247                 8.2%



- -----------
(1)   EBITDA, for Mexican GAAP purposes, is defined as operating income plus
depreciation and amortization (including amortization of bottles and cases).
EBITDA should not be construed as an alternative to (a) consolidated net income
as an indicator of our operating performance or (b) cash flows from operating
activities, financing activities and investing activities as a measure of our
liquidity. Our definition of EBITDA may not necessarily be comparable to other
companies' definitions of EBITDA.

                                       6

                                 Page 10 of 12


PEPSI-GEMEX, S.A. DE C.V.
CONSOLIDATED STATEMENTS OF INCOME

IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF JUNE 30, 2002
(9.965 PESOS=US$1.00)



                                             6 Months Ended                          6 Months Ended
                                             June 30, 2002          %                June 30, 2001          %
                                             --------------      -------             --------------      -------
                                                                                             
Total Value (MM's 8oz. Cases)                     197.2                                   180.6
Soft Drinks (MM's 8oz. Cases)                     177.8                                   165.6
Bottled Water (MM's 8oz. Cases)                    19.4                                    15.0

Water Jug (MM's 19 Lts. Jugs)                      53.5                                    48.3

Total Revenues                                  6,003            100.0%                 5,498            100.0%
Costs of Sales                                  2,473             41.2%                 2,361             42.9%
Gross Profit                                    3,530             58.8%                 3,137             57.1%
Operating Expenses                              2,443             40.7%                 2,226             40.5%

EBITDA                                          1,087             18.1%                   911             16.6%

Depreciation & Amortization                       311              5.2%                   296              5.4%

Operating Income                                  776             12.9%                   615             11.2%

Other Expenses                                     84              1.4%                    89              1.6%
Integral Cost of Financing                        356              5.9%                   (94)            -1.7%
 Net Interest expense                             138              2.3%                   222              4.1%
 Foreign exchange loss (gain)                     301              5.0%                  (236)            -4.3%
 Monetary position gain                           (83)            -1.4%                   (80)            -1.5%

Income before tax                                 336              5.6%                   620             11.3%
Deferred tax                                       92              1.5%                    86              1.6%
Tax                                                65              1.1%                    98              1.8%

Net Income                                        179              3.0%                   436              7.9%


                                       7

                                 Page 11 of 12

PEPSI-GEMEX, S.A. DE C.V.
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2002 AND DECEMBER 31, 2001
IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF JUNE 30, 2002
(9.965 PESOS=US$1.00)



                                                JUNE, 2002               DECEMBER, 2001
                                             -----------------        -------------------
                                                                
Current Assets                                    1,586                    1,884
     Cash and cash equivalents                      282                      102
                                                 ------                  -------
Property, Plan & Equipment (net)                  7,218                    7,000
                                                 ------                  -------
Goodwill & Deferred Assets                        1,606                    1,903
                                                 ------                  -------
Other Assets                                         63                       63
                                                 ------                  -------
Total Assets                                     10,473                   10,850
                                                 ======                  =======

Short Term Debt                                      35                      386
                                                 ------                  -------
Other Liabilities                                 1,434                    1,539
                                                 ------                  -------
Current Liabilities                               1,469                    1,925
                                                 ------                  -------

Long Term Debt                                    3,195                    3,022
                                                 ------                  -------
Other Liabilities                                 1,454                    1,117
                                                 ------                  -------
Long Term Liabilities                             4,649                    4,139
                                                 ------                  -------
Total Liabilities                                 6,118                    6,064
                                                 ------                  -------

Stockholder's Equity                              4,355                    4,786
                                                 ------                  -------

Total Liabilities & Stockholder's Equity         10,473                   10,850
                                                 ======                  =======


                                       8
                                 Page 12 of 12

EX-99.A.10

                        [THE PEPSI BOTTLING GROUP LOGO]

                                                                 EXHIBIT (a)(10)

                                                       
  CONTACT:    Kelly McAndrew                                Mary Winn Settino
           Public Relations                                 Investor Relations
           (203) 613-1552 cell                              (914) 767-7216
           (914) 767-7690 office

  

                                                           FOR IMMEDIATE RELEASE

              THE PEPSI BOTTLING GROUP ANNOUNCES THE COMMENCEMENT

                  OF CASH TENDER OFFERS TO ACQUIRE PEPSI-GEMEX

     SOMERS, N.Y., OCTOBER 7, 2002 -- The Pepsi Bottling Group, Inc. (NYSE: PBG)
announced today that it has commenced cash tender offers in the United States
and Mexico to complete the acquisition of Mexican bottler Pepsi-Gemex, S.A. de
C.V. (NYSE: GEM; BMV: PEPSIGX). The tender offers will expire at 5 p.m. (EST) on
November 5, 2002, unless the offers are extended.

     Enrique C. Molina Sobrino and PepsiCo, Inc. have each agreed to tender
approximately 40 percent and 34.4 percent, respectively, of the total
outstanding capital stock of Pepsi-Gemex. Pepsi-Gemex's Board of Directors has
recommended that all other Pepsi-Gemex shareholders accept the offers and tender
their shares.

     The U.S. cash offer is for all global depositary shares (GDS) at Ps 106.38
per GDS, and for all series B shares and all ordinary participation certificates
(CPO) held by holders who are not resident in Mexico at Ps 5.91 per share and Ps
17.73 per CPO. The purchase price in the U.S. tender offer will be paid in U.S.
dollars. The price will be calculated using the average of the U.S. dollar to
Mexican peso exchange rates reported on each of the five consecutive U.S.
business days ending two U.S. business days prior to the expiration date of the
tender offer. The exchange rates used for this calculation will be those
reported by Reuters and Bloomberg on their respective FXBENCH pages as the New
York closing rate.

     The Mexican offer is for all series B shares and CPOs at the same prices
offered in the U.S. tender offer. The purchase price in the Mexican offer will
be paid at the election of the holder in Mexican pesos or U.S. dollars
calculated as described above.

     The tender offers are conditioned upon, among other things, the number of
shares, CPOs and GDSs tendered and not withdrawn representing not less than 90
percent of all outstanding shares of capital stock of Pepsi-Gemex on the
expiration date. PBG expects to eliminate all shares of capital stock of Pepsi-
Gemex (including those represented by CPOs and GDSs) not purchased in the tender
offers through a reverse stock split, in which all remaining holders will
receive the same prices offered in the tender offers payable in Mexican pesos.

     The complete details of the offers are set forth in the U.S. Offer to
Purchase and related documents, and the Mexican Folleto Informativo and related
documents as filed today with the U.S. Securities and Exchange Commission (SEC)
and the Comision Nacional Bancaria y de Valores (CNBV) of Mexico, respectively.
We encourage investors and security holders of Pepsi-Gemex to read carefully the
U.S. Offer to Purchase and related documents because they contain important
information about the transaction.

     Investors and security holders who hold GDSs, or are not Mexican residents
and hold shares or CPOs, may obtain a free copy of the U.S. Offer to Purchase
and other documents filed by PBG, as well as the related
solicitation/recommendation statement filed by Pepsi-Gemex, at the SEC's website
at

PBG ANNOUNCES THE COMMENCEMENT
OF CASH TENDER OFFERS TO ACQUIRE PEPSI-GEMEX
PAGE  2

www.sec.gov. The U.S. Offer to Purchase and these other documents may also be
obtained for free from Morrow & Co., Inc., the Information Agent for the U.S.
offer, by calling 1-800-607-0088.

     Pepsi-Gemex, headquartered in Mexico City, is the second largest bottler of
Pepsi-Cola beverages outside of the United States and owns Mexico's largest
purified water company, Electropura.

     The Pepsi Bottling Group, Inc. is the world's largest manufacturer, seller
and distributor of Pepsi-Cola beverages, with operations in the U.S., Canada,
Greece, Russia, Spain and Turkey. To receive press releases by e-mail, please
visit http://www.pbg.com.

     This press release is for informational purposes only and shall not
constitute an offer to purchase or the solicitation of an offer to sell
securities of Pepsi-Gemex pursuant to the tender offers or otherwise. The
solicitation of offers to sell securities of Pepsi-Gemex can only be made
pursuant to the U.S. Offer to Purchase and related documents.

Statements made in this press release that relate to future events, performance
or financial results of the Company are forward-looking statements which involve
uncertainties that could cause actual events, performance or results to
materially differ. PBG undertakes no obligation to update any of these
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as to the date hereof. Accordingly,
any forward-looking statement should be read in conjunction with the additional
information about risks and uncertainties set forth in PBG's Securities and
Exchange Commission reports, including its annual report on Form 10-K for the
year ended December 30, 2001.

EX-99.A.17

                                                                 Exhibit (a)(17)

         ENGLISH SUMMARY OF MEXICAN OFFER MATERIAL (FOLLETO INFORMATIVO)

      The contents of the Mexican Offer material, or Folleto Informativo, are
substantially identical in all material respects to those of the U.S. Offer to
Purchase.

      The Mexican Offer is governed by the rules and regulations of the Comision
Nacional Bancaria y de Valores of Mexico, or the CNBV. The Mexican Offer is open
to all holders of Shares and CPOs, including U.S. holders. The purchase price
for the Shares and CPOs tendered in the Mexican Offer will be paid, at the
election of the tendering holder, in Mexican pesos or in U.S. dollars equivalent
to the Mexican pesos price based on the exchange rate calculated using the
average of the exchange rates reported on each of the five executive business
days ending two U.S. business days prior to the expiration of the U.S. Offer by
Reuters and Bloomberg on their FXBENCH page as the New York closing rate for the
exchange of Mexican pesos and U.S. dollars. However, individuals tendering in
the Mexican offer will be entitled to elect to receive the purchase price in
U.S. dollars only if they have an account outside Mexico into which they can
receive payment in U.S. dollars and the information regarding such account has
been provided to Acciones y Valores de Mexico, S.A. de C.V., or Accival, the
Mexican Receiving Agent.

      The procedures for tendering in the Mexican Offer are described in Annex
II to the U.S. Offer to Purchase.

EX-99.B.1

                                                                  Exhibit (b)(1)

                                                                  CONFORMED COPY




                               U.S. $1,200,000,000
                     REVOLVING BRIDGE LOAN CREDIT AGREEMENT

                           Dated as of October 2, 2002

                                      among

                         THE PEPSI BOTTLING GROUP, INC.,

                              BOTTLING GROUP, LLC,

                            THE LENDERS NAMED HEREIN,

                        DEUTSCHE BANK AG NEW YORK BRANCH,
                                    as Agent,

                     CREDIT SUISSE FIRST BOSTON CORPORATION,
                        DEUTSCHE BANK SECURITIES INC. and
                           SALOMON SMITH BARNEY INC.,
                           as Joint Lead Arrangers and
                              Joint Book Managers,

                                       and

                                 CITIBANK, N.A.,
                           CREDIT SUISSE FIRST BOSTON,
                  ACTING THROUGH ITS CAYMAN ISLANDS BRANCH, and
                        DEUTSCHE BANK AG NEW YORK BRANCH,
                           as Joint Syndication Agents

                                TABLE OF CONTENTS


                                                                               
                                    ARTICLE I
                           DEFINITIONS AND ACCOUNTING

Section 1.01.    Certain Defined Terms .......................................     1
Section 1.02.    Computation of Time Periods .................................    14
Section 1.03.    Accounting Terms ............................................    14

                                   ARTICLE II
                        AMOUNTS AND TERMS OF THE ADVANCES

Section 2.01.    The Revolving Credit Advances ...............................    14
Section 2.02.    Making the Revolving Credit Advances ........................    15
Section 2.03.    The Competitive Bid Advances ................................    16
Section 2.04.    Fees ........................................................    20
Section 2.05.    Termination, Reduction or Increase of the Commitments .......    20
Section 2.06.    Repayment of Revolving Credit Advances; Evidence of
                 Indebtedness ................................................    21
Section 2.07.    Interest on Revolving Credit Advances .......................    21
Section 2.08.    Interest Rate Determination .................................    22
Section 2.09.    Optional Conversion of Revolving Credit Advances ............    23
Section 2.10.    Optional Prepayments of Revolving Credit Advances and
                 Mandatory Prepayments of all Advances .......................    23
Section 2.11.    Increased Costs .............................................    24
Section 2.12.    Illegality ..................................................    25
Section 2.13.    Payments and Computations ...................................    25
Section 2.14.    Taxes .......................................................    26
Section 2.15.    Sharing of Payments, Etc ....................................    29
Section 2.16.    Use of Proceeds .............................................    29
Section 2.17.    [Intentionally Omitted] .....................................    29
Section 2.18.    Mitigation Obligations ......................................    29

                                   ARTICLE III
                   CONDITIONS TO EFFECTIVENESS AND ARTICLE II

Section 3.01.    Conditions Precedent to Effectiveness of Sections 2.01 and
                 2.03 ........................................................    30



                                        i

                                TABLE OF CONTENTS


                                                                               
Section 3.02.    Conditions Precedent to Each Revolving Credit Borrowing .....    33
Section 3.03.    Conditions Precedent to Each Competitive Bid Borrowing ......    33
Section 3.04.    Determinations Under Section 3.01 ...........................    34

                                   ARTICLE IV
               REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

Section 4.01.    Representations and Warranties of the Loan Parties ..........    34

                                    ARTICLE V
                                    COVENANTS

Section 5.01.    Affirmative Covenants .......................................    35
Section 5.02.    Negative Covenants ..........................................    37
Section 5.03.    Financial Covenants .........................................    39
Section 5.04.    Syndication .................................................    39
Section 5.05.    Take-Out Financing ..........................................    40

                                   ARTICLE VI
                                EVENTS OF DEFAULT

Section 6.01.    Events of Default ...........................................    42

                                   ARTICLE VII
                                    THE AGENT

                                  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 .............................................    52
Section 8.09.    Governing Law ...............................................    52




                                       ii

                                TABLE OF CONTENTS

                                                                               
Section 8.10.    Execution in Counterparts ...................................    52
Section 8.11.    Jurisdiction, Etc ...........................................    52
Section 8.12.    WAIVER OF JURY TRIAL ........................................    53
Section 8.13.    Integration of Terms ........................................    53

                                   ARTICLE IX
                             [INTENTIONALLY OMITTED]

                                    ARTICLE X
                               GUARANTOR GUARANTEE

Section 10.01.   Guarantor Guarantee .........................................    53
Section 10.02.   Limitation of Guarantor's Liability .........................    54



SCHEDULE 1       -   LENDING OFFICES
SCHEDULE 2       -   APPLICABLE MARGIN

EXHIBIT A-1      -   FORM OF NOTICE OF REVOLVING CREDIT BORROWING
EXHIBIT A-2      -   FORM OF NOTICE OF COMPETITIVE BID BORROWING
EXHIBIT B        -   FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT C        -   FORM OF OPINION OF COUNSEL FOR THE COMPANY AND THE
                     GUARANTOR


                                      iii

                     REVOLVING BRIDGE LOAN CREDIT AGREEMENT

                           Dated as of October 2, 2002

            THE PEPSI BOTTLING GROUP, INC., a Delaware corporation, as borrower
(the "Company" or the "Borrower"), BOTTLING GROUP, LLC, a Delaware limited
liability company, as guarantor (the "Guarantor"), the banks, financial
institutions and other institutional lenders (the "Initial Lenders") listed on
the signature pages hereof, and Deutsche Bank AG New York Branch, as
administrative agent (in such capacity, the "Agent") for the Lenders (as
hereinafter defined), agree as follows:

                                    ARTICLE I

                           DEFINITIONS AND ACCOUNTING

            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):

            "Acquisition" means the acquisition of at least 90% (subject to
waiver by PBG-Spain; provided that such waiver does not result in Gemex failing
to be a Subsidiary of the Borrower under its Control immediately after such
acquisition) of the outstanding Gemex Shares pursuant to all cash tender offers
(the "Tender Offers") by means of simultaneous offers to purchase in the United
States and in Mexico to be made by PBG-Spain.

            "Acquisition Documents" means the Schedule TO, as amended, to be
filed with the Commission by PBG-Spain in connection with the Acquisition and
the several exhibits thereto, including the U.S. Offer to Purchase and the GDS
Letter of Transmittal, each as amended, an application to the Comision Nacional
Bancaria y de Valores, dated as of August 16, 2002, as amended, and the exhibits
thereto, each as amended, the Folleto Informativo, as amended, and all other
agreements, instruments, certificates, filings, consents, approvals, Board of
Directors resolutions, opinions and other documents furnished pursuant to or in
connection with the Acquisition.

            "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 Deutsche Bank with its office at 31 West 52nd Street, New York, New
York 10019.

                                      -2-


            "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 its 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 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.

            "Arrangers" means Credit Suisse First Boston Corporation, Deutsche
Bank Securities Inc. and Salomon Smith Barney Inc.

            "Asset Sale" means any direct or indirect sale, disposition,
conveyance, transfer, lease, assignment or other transfer, including a sale and
leaseback transaction, by any member of the Borrower Group of any Capital Stock
or any other property or assets (other than cash or Cash Equivalents), including
any series of related transactions and excluding:

            (1) a disposition of inventory or obsolete, outmoded or worn-out
      equipment in the ordinary course of business,

            (2) disposition of property or assets owned immediately prior to the
      closing date of the Acquisition with an aggregate fair market value not to
      exceed $25,000,000 in the aggregate, and

                                      -3-


            (3) a disposition of property or assets acquired as a result of, or
      after the closing date of, the Acquisition with an aggregate fair market
      value not to exceed $300,000,000 in the aggregate.

The amounts set forth in clauses (2) and (3) each shall be calculated on a
cumulative basis from and after the Effective Date for the Borrower Group, taken
as a whole.

            "Asset Sales Proceeds" means, with respect to an Asset Sale, the
gross proceeds received by a member of the Borrower Group in the form of cash or
Cash Equivalents from such Asset Sale (including payments in such form received
in respect of deferred payment obligations from such Asset Sale), net of
reasonable and customary out-of-pocket expenses relating to such Asset Sale and
including, for the avoidance of doubt, any such proceeds received by a
Controlled Affiliate following transfer of any Capital Stock or property or
asset to a Controlled Affiliate by the Borrower or the Guarantor.

            "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.

            "Available Proceeds" has the meaning specified in Section
2.10(b)(i).

            "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 CSFB in New York, New
York, from time to time, as CSFB'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).

            "Borrower Group" has the meaning specified in Section 2.10(b)(i).

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

            "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.

            "Capital Markets Proceeds" means the proceeds received by any member
of the Borrower Group from the sale of any security issued or guaranteed by any
member of the Borrower Group on or after the date hereof (including, without
limitation, the Securities), or any right to subscribe to, purchase or acquire
any of the foregoing, net of associated underwriting, legal and other offering
expenses, but excluding (x) commercial paper, (y) the proceeds of drawings
hereunder or under bank loan agreements entered into prior to the date hereof,
or (z) Capital Stock and Indemnification Related Notes issued as consideration
for any acquisition (but,

                                      -4-


for the avoidance of doubt, excluding Capital Stock sold to one or more third
parties where the proceeds realized therefrom are used to finance any
acquisition).

            "Capital Stock" means:

            (1) with respect to any Person that is a corporation, any and all
      shares, interests, participations or other equivalents (however designated
      and whether or not voting) of corporate stock, including each class of
      common stock and preferred stock of such Person;

            (2) with respect to any Person that is not a corporation, any and
      all partnership, membership or other equity or ownership interests of such
      Person; and

            (3) any warrants, rights or options to purchase any of the
      instruments or interests referred to in clause (1) or (2) above.

            "Cash Equivalents" means:

            (1) marketable direct obligations issued by, or unconditionally
      guaranteed by, the United States government or issued by any agency
      thereof and backed by the full faith and credit of the United States, in
      each case maturing within 12 months from the date of acquisition thereof;

            (2) marketable direct obligations issued by any state of the United
      States of America or any political subdivision of any such state or any
      public instrumentality thereof maturing within 12 months from the date of
      acquisition thereof and, at the time of acquisition, having one of the two
      highest ratings obtainable from either S&P or Moody's;

            (3) commercial paper maturing no more than 270 days from the date of
      creation thereof and, at the time of acquisition, having a rating of at
      least A-1 from S&P or at least P-1 from Moody's;

            (4) certificates of deposit or bankers' acceptances maturing within
      12 months from the date of acquisition thereof issued by (i) any Lender or
      (ii) any bank organized under the laws of the United States of America or
      any state thereof or the District of Columbia or any U.S. branch of a
      non-U.S. bank having at the date of acquisition thereof combined capital
      and surplus of not less than $500 million;

            (5) repurchase obligations with a term of not more than seven days
      for underlying securities of the types described in clause (1) above
      entered into with any bank meeting the qualifications specified in clause
      (4) above; and

            (6) investments in money market funds which invest substantially all
      their assets in securities of the types described in clauses (1) through
      (5) above.

            "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

                                      -5-


Exchange Act of 1934 and the rules of the 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.

            "Commission" means the U.S. Securities and Exchange Commission.

            "Commitment" has the meaning specified in Section 2.01.

            "Commitment Letter" means the commitment letter, dated August 26,
2002, by and among the Initial Lenders, the Arrangers, the Borrower and the
Guarantor.

            "Competitive Bid Advance" means an advance by a Lender to the
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
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

                                      -6-


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 write-ups 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.

            "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.

                                       -7-


      "CSFB" means Credit Suisse First Boston, acting through its Cayman Islands
Branch.

      "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.

      "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).

      "Deutsche Bank" means Deutsche Bank AG New York Branch.

      "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 Borrower 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

                                      -8-


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 $15,000,000,000 and a combined capital and surplus of at least $1,000,000,000
so long as such bank is acting through a branch or agency located in the United
States or in the country in which it is organized or another country that is
described in this clause (v); (vi) the central bank of any country that is a
member of the Organization for Economic Cooperation and Development; provided,
however, that each Person described in clauses (ii) through (vi) shall have a
short term public debt rating of not less than A by S&P or Moody's or shall be
approved by the Company; and (vii) any other Person approved by the Company,
such approval not to be unreasonably withheld or delayed; provided, however,
that neither the Company nor an Affiliate of the Company shall qualify as an
Eligible Assignee.

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

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

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

                                       -9-


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.

      "Execution Date" means the date on which the parties hereto shall have
executed and delivered to the other parties hereto counterparts of this
Agreement.

      "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.

      "Fee Letter" means the fee and syndication letter, dated August 26, 2002,
by and among the Initial Lenders, the Arrangers, the Borrower and the Guarantor.

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

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

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

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

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

      "Gemex" means Pepsi-Gemex, S.A. de C.V., a company organized under the
laws of Mexico.

      "Gemex Shares" means Series B Common Shares, Ordinary Participation
Certificates and Global Depositary Shares of Gemex.

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

                                      -10-


      "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.

      "Indemnification Related Notes" means promissory notes in an original
principal amount not to exceed $20,000,000 in the aggregate issued by any member
of the Borrower Group pursuant to the terms of any acquisition agreement and
which are (i) issued in lieu of requiring the applicable seller to post a bond,
obtain a letter of credit or establish an escrow to secure such seller's
indemnification obligations and (ii) on terms customary for similar instruments.

      "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.

      "Initial Lender" means each of Citibank, N.A., Credit Suisse First Boston,
acting through its Cayman Islands Branch, and Deutsche Bank AG New York Branch.

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

      (1) the Company may not select any Interest Period that ends after the
   Termination Date;

      (2) 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;

      (3) 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

      (4) 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

                                      -11-


   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 Section 8.07.

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

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

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

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

      "Master Bottling Agreement" means the Master Bottling Agreement, dated
March 30, 1999, as amended, 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.

      "Material Adverse Change" means any material adverse change in the
financial condition, results of operations or business of the Company and its
Subsidiaries (including the Guarantor), taken as a whole, or the Guarantor and
its Subsidiaries, taken as a whole.

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

      "Mexico" means the United Mexican States.

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

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

                                      -12-



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

      "Offering" has the meaning specified in Section 5.05(a).

      "PBG Projections" has the meaning specified in Section 3.01(i).

      "PBG-Spain" means PBG Grupo Embotellador Hispano-Mexicano, S.L., a newly
formed Spanish limited company and a Controlled Affiliate of the Company.

      "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 the Initial Lenders (and any successors thereof).

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

      "Regulation S" has the meaning specified in Section 5.05(a).

      "Regulation U" has the meaning specified in Section 4.01(g).

      "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.

      "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 the 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).

                                      -13-


      "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.

      "Rule 144A" has the meaning specified in Section 5.05(a).

      "S&P" means Standard & Poor's Rating Services or any successor thereto.

      "Securities" has the meaning specified in Section 5.05(a).

      "Securities Act" has the meaning specified in Section 5.05(a).

      "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.

      "Successful Syndication" means any Syndication in which the Commitment of
each Initial Lender shall have been reduced to an amount less than or equal to
10% of the aggregate amount of the Commitments of the Lenders.

      "Syndication" has the meaning specified in Section 5.04(a).

      "Take-Out Investment Banks" means one or more investment banks selected by
the Loan Parties, in their sole discretion, and reasonably satisfactory to the
Lenders that are to act as lead managers in the Offering.

      "Tender Offers" has the meaning specified in the definition of
"Acquisition."

      "Termination Date" means April 30, 2003 or, if earlier, the date of
termination in whole of the Commitments pursuant to Section 2.05(a) or 2.10(b)
or 6.01; 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.

      "364-Day Credit Agreement" means the 364-Day Credit Agreement, dated as of
May 3, 2000, as amended from time to time, among The Pepsi Bottling Group, Inc.,
Bottling Group, LLC, the Lenders named therein and JPMorgan Chase Bank, as
Agent.

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

                                      -14-


      "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 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 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 2.10(b) (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

                                      -15-


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,
the Borrower may borrow under this Section 2.01, prepay pursuant to Section
2.10(a) and reborrow under this Section 2.01. Amounts prepaid pursuant to
Section 2.10(b) may not be reborrowed.

      SECTION 2.02. Making the Revolving Credit Advances.

      (1) 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
   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 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, and (iv) in the
   case of a Revolving Credit Borrowing consisting of Eurodollar Rate Advances,
   initial Interest Period for each such Revolving Credit Advance. 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 Borrower at the Borrower's
   account at the Agent's address referred to in Section 8.02.

      (2) 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.

      (3) Each Notice of Revolving Credit Borrowing shall be irrevocable and
   binding on the 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

                                      -16-


   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.

      (4) 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 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 the
   Borrower severally agree to repay to the Agent forthwith on demand such
   corresponding amount together with interest thereon, for each day from the
   date such amount is made available to the Borrower until the date such amount
   is repaid to the Agent, at, (i) in the case of the 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 Borrower's
   account at the Agent's address referred to in Section 8.02.

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

      SECTION 2.03. The Competitive Bid Advances.

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

         (2) The Company 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 (v) the date of such

                                -17-

proposed Competitive Bid Borrowing, (w) the aggregate amount of such proposed
Competitive Bid Borrowing, (x) 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), (y)
the interest payment date or dates relating thereto, 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 each Lender of each request for a Competitive Bid Borrowing
received by it from the Company by sending such Lender a copy of the related
Notice of Competitive Bid Borrowing.

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

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

                                      -18-

time) three Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, either:

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

            (y) accept one or more of the offers made by any Lender or Lenders
      pursuant to paragraph (3) above, by giving notice to the Agent of the
      amount of each Competitive Bid Advance (which amount shall be equal to or
      greater than the minimum amount, and equal to or less than the maximum
      amount, notified to the Company by the Agent on behalf of such Lender for
      such Competitive Bid Advance pursuant to paragraph (3) above) to be made
      by each Lender as part of such Competitive Bid Borrowing, and reject any
      remaining offers made by Lenders pursuant to paragraph (3) above by giving
      the Agent notice to that effect. If the Company accepts any offers made by
      Lenders pursuant to paragraph (3) above, such offers shall be accepted in
      the order of the lowest to highest interest rates or, if two or more
      Lenders offer to make Competitive Bid Advances at the same interest rate,
      such offers, if any, shall be accepted in proportion to the amount offered
      by each such Lender at such interest rate notwithstanding any minimum
      specified by such Lender in its notice given pursuant to Section 2.03(3).
      The Company may not accept offers in excess of the amount specified in
      accordance with paragraph (1) above.

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

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

                                      -19-

referred to in Section 8.02. Promptly after each Competitive Bid Borrowing, the
Agent will notify each Lender of the amount of the Competitive Bid Borrowing,
the consequent Competitive Bid Reduction and the dates upon which such
Competitive Bid Reduction commenced and will terminate.

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

            (b) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (c) below, and reborrow under this
Section 2.03, provided that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.

            (c) The Borrower shall repay to the Agent for the account of each
Lender that has made a Competitive Bid Advance to the Borrower, on the maturity
date of such Competitive Bid Advance (such maturity date being that specified by
the Company for repayment of such Competitive Bid Advance in the related Notice
of Competitive Bid Borrowing delivered pursuant to paragraph (2) above and
provided in the promissory note, if any, evidencing such Competitive Bid
Advance), the then unpaid principal amount of such Competitive Bid Advance.
Except as required by Section 2.10(b), the Borrower shall not have any right to
prepay any principal amount of any Competitive Bid Advance unless (x) the
Borrower obtains the prior written consent of the Lender which made such
Competitive Bid Advance, or (y) such prepayment is made on the terms specified
by the Company for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to paragraph (2) above and set
forth in the promissory note, if any, evidencing such Competitive Bid Advance.

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

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

            (f) The indebtedness of the Borrower resulting from each Competitive
Bid Advance made to the Borrower as part of a Competitive Bid Borrowing shall,
if requested by the

                                      -20-

applicable Lender, be evidenced by a separate promissory note of the 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 accruing (i) in the case of each Initial Lender
from and after the 41st day after the Execution Date and (ii) in the case of any
other Lender from and after the later of (x) the 41st day after the Execution
Date and (y) the effective date specified in the Assignment and Acceptance
pursuant to which it became a Lender, in each case until the Termination Date
(on a daily basis) at the Applicable Margin, payable in arrears on the last day
of each March, June, September and December, commencing December 31, 2002, and
ending on the Termination Date; provided, however, that if (i) there has not
been an Advance during the 40-day period following the Execution Date and (ii)
the Borrower has terminated the Commitments in whole under Section 2.05(a)
effective on or prior to the 40th day following the Execution Date, no facility
fee shall be due and payable.

            (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 on the
last day of each March, June, September and December commencing December 31,
2002 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 (or one Business Day's notice if there have been no Advances) 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.

            (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

                                      -21-

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.

            SECTION 2.06. Repayment of Revolving Credit Advances; Evidence of
Indebtedness.

            (a) The Company 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 Borrower 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 Borrower 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 the 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 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).

            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 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.

            (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

                                      -22-

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.

            (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.

                                      -23-


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

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

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

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

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

            SECTION 2.10. Optional Prepayments of Revolving Credit Advances and
Mandatory Prepayments of all Advances.

            (a) 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 Borrower 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 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).

                                      -24-

            (b)(i) Concurrently with the receipt by the Borrower, the Guarantor
      or any of their respective Controlled Affiliates (collectively, the
      "Borrower Group") of Capital Markets Proceeds or Asset Sales Proceeds
      (either, the "Available Proceeds"), the Company shall deliver to the Agent
      a calculation of the amount of such Available Proceeds (including an
      itemization of any deductions from gross proceeds) and shall prepay the
      outstanding principal amount of the Advances ratably in an amount equal to
      such Available Proceeds and, to the extent the amount of such Available
      Proceeds exceeds the outstanding principal amount of the Advances, the
      unused portions of the respective Commitments of the Lenders shall be
      reduced ratably; provided, however, that the Commitments of the Lenders
      shall be reduced to zero immediately upon the consummation of the
      Offering.

            (ii) The Company shall use its reasonable efforts to notify the
      Agent of any prepayment or reduction of Commitments pursuant to subsection
      (b) of this Section 2.10 at least two Business Days prior to such
      prepayment or reductions.

            (iii) All prepayments pursuant to this Section 2.10(b) shall be
      accompanied by interest accrued to the date of prepayment on the principal
      amount so prepaid, which amount shall be applied to payment of interest
      before application to principal. In the event any such prepayment is
      applicable to a Eurodollar Rate Advance, the Borrower 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), in each case on or after the date hereof, 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

                                      -25-

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.

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

                                      -26-

            (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.

            (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 the
Borrower will not make such payment in full, the Agent may assume that the
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 to such Lender. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.

            SECTION 2.14. Taxes.

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

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

                                      -27-

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

            (d) If, as a result of the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any United States law or any
tax treaty (or in the application or official interpretation of any law or any
tax treaty) that occurs on or after the date a Foreign Lender first becomes a
party to this Agreement (a "Change in Law"), a Foreign Lender cannot comply with
Section 2.14(b) or, if despite such compliance, the 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) the Borrower shall make such deductions, and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. Notwithstanding
the foregoing, the 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 the Borrower cannot or does not legally or timely do
so, the Borrower 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 Borrower 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 the Borrower cannot or does not legally or timely do so, the
Borrower 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 Borrower 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 the Borrower through an account or branch outside the United States or
on behalf of the Borrower by a payor that is not a United States person (a
"Foreign Payment"), the Borrower shall determine that no foreign withholding
taxes are payable

                                      -28-

in 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 the Borrower's efforts
described in this subsection by providing to the extent reasonably within its
means any forms requested by the Borrower substantiating an exemption from
foreign withholding taxes required by any governmental agency. For purposes of
this subsection (f), the terms "United States" and "United States person" shall
have the meaning specified in Section 7701 of the Internal Revenue Code. If, as
a result of the enactment, promulgation, execution or ratification of, or any
change in or amendment to, any applicable foreign law or any tax treaty (or in
the application or official interpretation of any law or any tax treaty) that
occurs on or after the date a tax opinion is rendered pursuant to the terms of
this subsection, and which renders such tax opinion incorrect as to the absence
of any foreign withholding tax (a "Foreign Change in Law"), the 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) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
Notwithstanding the foregoing, the 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 the Borrower cannot or does not legally or
timely do so, the Borrower 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 Borrower, 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 the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.14 shall 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

                                      -29-

consistent with such Lender's treatment of similarly situated customers of such
Lender whose transactions with such Lender are similarly affected by the change
in circumstances giving rise to such payment, but such Lender shall not be
required to disclose any confidential or proprietary information therein.

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

            SECTION 2.16. Use of Proceeds. The proceeds of the Advances shall be
used solely (and the Borrower agrees that such proceeds shall be used solely) to
finance the Acquisition, to refinance Debt incurred by the Borrower in
connection therewith, and to pay fees and expenses in connection therewith.

            SECTION 2.17. [Intentionally Omitted]

            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.

                                      -30-

                                   ARTICLE III

                   CONDITIONS TO EFFECTIVENESS AND ARTICLE II

            SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
as of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied; provided that the Effective Date shall be no
later than December 31, 2002:

            (a) As of the Effective Date, there shall have occurred no Material
Adverse Change since December 29, 2001;

            (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) [Intentionally Omitted]

            (d) As of the Effective Date, all governmental and third party
consents and approvals required to be obtained by the Loan Parties and their
respective Affiliates necessary in connection with the Acquisition and the other
transactions contemplated hereby shall have been obtained (without the
imposition of any material conditions that are not reasonably acceptable to the
Lenders) and shall remain in effect, except that the filings made with the
Commission in respect of the Tender Offers shall be subject to the Commission's
review;

            (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;

            (ii) All information with respect to the Borrower, the Guarantor and
      their respective Subsidiaries (excluding information with respect to Gemex
      and its Subsidiaries that has been made available to any of the Lenders or
      the Arrangers by the Borrower or the Guarantor or any of the Borrower's or
      Guarantor's respective representatives prior to the time Gemex and its
      Subsidiaries become Subsidiaries of the Company), other than the PBG
      Projections, that has been made available to any of the Lenders or the
      Arrangers by the Borrower or the Guarantor or any of the Borrower's or
      Guarantor's respective representatives is complete and correct in all
      material respects and does not contain any

                                      -31-

      untrue statement of a material fact or omit to state a material fact
      necessary in order to make the statements contained therein not materially
      misleading in light of the circumstances under which such statements were
      made;

            (iii) The PBG Projections that have been made available to any of
      the Lenders or the Arrangers by the Borrower or the Guarantor or any of
      the Borrower's or Guarantor's respective representatives were prepared in
      good faith based upon assumptions that were reasonable at the time made,
      at the time the related PBG Projections were made available to any of such
      Lenders or Arrangers and at the time of the Effective Date; and

            (iv) 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 the
      Acquisition, and of all documents evidencing other necessary corporate
      action and governmental approvals, if any, with respect to this Agreement
      and the Acquisition,

            (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 a Managing Director 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) Opinions of Steven M. Rapp, Senior Deputy General Counsel to
      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) Opinions of Proskauer Rose LLP, special New York counsel to
      each of the Company and the Guarantor, dated the Effective Date, in form
      and substance reasonably satisfactory to the Lenders,

            (vii) An opinion of Inigo Madariaga, Esq., special Spanish counsel
      to PBG-Spain, dated the Effective Date, in form and substance reasonably
      satisfactory to the Lenders,

            (viii) An opinion of Creel, Garcia-Cuellar y Muggenburg, S.C.,
      special Mexican counsel to PBG-Spain, in form and substance reasonably
      satisfactory to the Lenders,

                                      -32-

            (ix) A favorable opinion of Cleary, Gottlieb, Steen & Hamilton,
      special New York counsel to the Agent, dated the Effective Date, in form
      and substance reasonably satisfactory to the Lenders,

            (x) Certified copies of the resolutions of the Board of Directors of
      PBG-Spain approving the Acquisition, and of all documents evidencing other
      necessary corporate action and governmental approvals, if any, with
      respect to the Acquisition,

            (xi) The Agent shall have received such other approvals, opinions or
      documents (including the Acquisition Documents and copies of other
      material definitive documentation satisfactory to the Agent in connection
      with the Acquisition, all of the conditions to the effectiveness of which
      shall have been satisfied or waived; provided that a waiver of any
      material condition shall be reasonably acceptable to the Lenders) as any
      Lender through the Agent may reasonably request;

            (h) As of the Effective Date, in the reasonable judgment of the
Lenders and Arrangers, there are no competing issues of debt securities or
commercial bank or other credit facilities of the Company or its Subsidiaries or
of the Guarantor or its Subsidiaries being offered, placed or arranged (other
than the Securities and as otherwise provided herein);

            (i) As of the Effective Date, each of the Lenders and the Arrangers
shall have received all information with respect to the Company, the Guarantor
and their respective Subsidiaries, including all financial information and
projections (the "PBG Projections"), as each of the Lenders and the Arrangers
may have reasonably requested;

            (j) As of the Effective Date, the Company shall have provided to
each of the Lenders and the Arrangers all information with respect to Gemex and
its respective Subsidiaries, including all financial information and
projections, that the Company has possessed or could have reasonably formulated
or to which the Company has had reasonable access from Gemex or its
Subsidiaries, as each of the Lenders may have reasonably requested in connection
with the Syndication; provided that the provision by the Company of such
information would not have violated a prior confidentiality agreement with
Gemex;

            (k) As of the Effective Date, each of the Lenders and the Arrangers
shall not have discovered or otherwise become aware of any information not
previously disclosed to them that such Lender or Arranger believes to be
inconsistent in a material and adverse manner with its understanding, based on
the information provided to it by the Company, of the business, assets,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or the Guarantor and its Subsidiaries, taken as
a whole;

            (l) As of the Effective Date, each of the Lenders and the Arrangers
shall have become satisfied in all material respects with (i) the terms of the
Acquisition, including without limitation its corporate and legal structure,
(ii) the tax consequences to the Company, the Guarantor and their respective
Subsidiaries, and (iii) the accounting with respect to the Acquisition by the
Company, the Guarantor and their respective Subsidiaries; and

            (m) On the Effective Date, the Agent shall have received for the
account of each Lender a certificate signed by the Treasurer of the Company,
dated the Effective Date,

                                      -33-

demonstrating to the reasonable satisfaction of the Lenders that, following
application of the proceeds of each Advance, not more than 25 percent of the
value of the assets (either of the Company and its relevant Subsidiaries or the
Guarantor and its relevant Subsidiaries, in each case on a Consolidated basis)
subject to the provisions of any of Section 2.10(b) or 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" as defined in Regulation U.

            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 the following statements shall be true (and
each of the giving of the applicable Notice of Revolving Credit Borrowing and
the acceptance by the Borrower of the proceeds of such Revolving Credit
Borrowing shall constitute a representation and warranty by the Company 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.

            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 the Borrower of the proceeds of such Competitive
Bid Borrowing shall constitute a representation and warranty by the Company 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

            (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.

                                      -34-

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

                                   ARTICLE IV

               REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

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

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

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

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

            (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.

            (e) The combined balance sheet of the Company as at December 29,
2001, 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 LLP,
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 29, 2001, there has been no
Material Adverse Change.

            (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

                                      -35-

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 ("Regulation
U")), and no proceeds of any Advance will be used to purchase or carry any
"margin stock," as defined in Regulation U, or to extend credit to others for
the purpose (whether immediate, individual or ultimate) of purchasing or
carrying any margin stock, in either case in a manner that would cause the
Advances or any Lender to be in violation of Regulation U.

            (h) Following application of the proceeds of each Advance, not more
than 25 percent of the value of the assets (either of the Borrower only or of
the Company and its relevant Subsidiaries or the Guarantor and its relevant
Subsidiaries, in the latter two cases on a Consolidated basis) subject to the
provisions of any of Section 2.10(b) or 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 the Borrower will violate any provision of such Act or
any rule, regulation or order of the Commission thereunder.

            (j) The proceeds of the Advances shall be used solely (and the
Borrower agrees that such proceeds shall be used solely) to finance the
Acquisition, to refinance Debt incurred by the Borrower in connection therewith,
and to pay fees and expenses in connection therewith.

            (k) As of the Effective Date, none of Alfred H. Drewes, Nicholas
D'Alessandro, Steven M. Rapp or Ken Smith is in possession of any facts that
would give rise to an Obligation to Inform (as such term is defined in the
Commitment Letter).

                                    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.

                                      -36-

            (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 (i)
the Acquisition or (ii) 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 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 LLP 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;

                                      -37-

            (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 Commission; and

            (v) from time to time, such additional information regarding the
      financial position or business of the Borrower, the Guarantor and their
      respective Subsidiaries as any Lender may reasonably request.

            (e) Inspection of Property; Books and Records; Discussions. Permit
representatives of any Lender at such Lender's expense to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time, on reasonable notice, and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Borrower, the Guarantor and their
respective Subsidiaries with officers and employees of the Borrower, the
Guarantor and their respective Subsidiaries and with its independent certified
public accountants.

            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;

            (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;
      or

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

                                      -38-

            (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 or any other Subsidiary of the Borrower,
      if any, created under the 364-Day Credit Agreement 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) Debt created in the Offering;

            (vii) Debt of the Guarantor created hereunder;

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

            (ix) other Debt in an aggregate principal amount not exceeding 15%
      of Consolidated Net Tangible Assets at any time outstanding.

            (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, the 364-Day Credit 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 that 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

                                      -39-

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.

            SECTION 5.04. Syndication. Pursuant to the Commitment Letter, the
Company has agreed to, among other things, take any and every commercially
reasonable action necessary or desirable to syndicate the credit facilities
provided for herein (the "Syndication") on the earlier of (x) the 40th day
following the Execution Date or (y) November 1, 2002 (regardless of whether the
Execution Date has occurred). Without limiting the obligations of the Company
with respect to and under the Commitment Letter and this Agreement, in order to
ensure a Successful Syndication, the Company hereby agrees:

            (a) to agree to change the pricing, fees, terms and structure of the
credit facilities provided for herein, if the Arrangers determine, after
consultation with the Company, that such changes are advisable in order to
ensure a Successful Syndication of the Facility, provided that the aggregate
amount of the Commitments of the Lenders in no event shall be reduced pursuant
to this Section 5.04(a);

            (b) to perform or cause to be performed any and all acts and execute
or cause to be executed any and all documents (including any amendments,
supplements, waivers or consents to the Loan Documents) which, in the Arrangers'
good faith judgment, are necessary or advisable in order to ensure a Successful
Syndication (including those acts and the execution, or the causation of the
execution, of those documents in furtherance of the Company's agreement in
paragraph (a) of this Section 5.04, but subject to the proviso therein);

            (c) to pay, pursuant to the Fee Letter, any and all administrative
agent, underwriting and arrangement, and participation fees in connection with
the Syndication;

            (d) to use commercially reasonable efforts to ensure that efforts to
consummate the Syndication benefit materially from the Borrower's existing
lending relationships;

            (e) to assist the Arrangers in connection with the marketing of the
Syndication (including, without limitation, reasonably promptly providing to the
Arrangers any information reasonably requested to effect the Syndication and
making available senior management, representatives and advisors of the Borrower
and the Guarantor for meetings with prospective Lenders, due diligence meetings
and rating agency presentations at mutually acceptable times);

                                      -40-

            (f) to host, with and at the request of the Arrangers, meetings with
prospective Lenders;

            (g) to cooperate with the Arrangers in the timely preparation by the
Arrangers of any confidential information memorandum relating to the Syndication
and other marketing materials to be used in connection with the Syndication;

            (h) to provide or make available all information and other
assistance reasonably requested by the prospective Lenders and their counsel in
connection with their due diligence; and

            (i) to provide such other cooperation, assistance and information as
is customarily provided by borrowers in connection with the syndication of
credit facilities.

            SECTION 5.05. Take-Out Financing.

            (a) The Guarantor shall take any and every commercially reasonable
action necessary or desirable (i) to prepare an offering memorandum for a
private placement through resale pursuant to Rule 144A ("Rule 144A") and
Regulation S ("Regulation S") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to an offering and sale (the "Offering") of
unsecured debt securities of the Guarantor (the "Securities") and (ii) to
consummate such Offering as soon as practicable thereafter. The aggregate
principal amount of the Securities to be offered and sold in the Offering shall
equal or exceed the greater of (1) $1,000,000,000 and (2) the aggregate amount
of the outstanding Advances at the time of the Offering. Such Offering shall be
on such terms and conditions (including, without limitation, covenants, events
of default, unsecured guarantees, interest rates, yield, redemption prices and
dates) and a maturity date as the Take-Out Investment Banks and the Loan Parties
may in their judgment determine to be appropriate in light of then prevailing
circumstances and market conditions and the financial condition and prospects of
the Guarantor and its Subsidiaries at the time of sale and containing such other
customary terms as determined by the Take-Out Investment Banks, subject to the
approval of the Loan Parties. The Securities shall be guaranteed by Pepsi if and
to the extent agreed among Pepsi, the Guarantor and the Take-Out Investment
Banks. If any Securities are issued in a transaction not registered under the
Securities Act, all such Securities shall be entitled to the benefit of a
registration rights agreement to be entered into by the Guarantor and any other
obligor in respect of indebtedness being refinanced in customary form reasonably
acceptable to the Take-Out Investment Banks (which shall include provisions for
a customary registered exchange offer with respect to any such Securities).

            (b)  In connection with the foregoing, the Guarantor shall:

            (i) reasonably promptly after the Effective Date, have prepared and
      delivered to the Take-Out Investment Banks an offering memorandum relating
      to the issuance of the Securities, in form and substance reasonably
      satisfactory to the Take-Out Investment Banks (which offering memorandum
      shall contain or incorporate by reference audited and unaudited financial
      statements as would be required of a registrant on Form S-3 and shall be
      otherwise reasonably satisfactory to the Take-Out Investment Banks);

                                      -41-

            (ii) assist the Take-Out Investment Banks in connection with the
      marketing of the Offering (including promptly providing to the Take-Out
      Investment Banks any information reasonably requested to effect the issue
      and sale of the Offering and making available senior management,
      representatives and advisors of the Guarantor for related due diligence
      meetings, rating agency presentations, "road show" presentations and other
      investor meetings at mutually acceptable times);

            (iii) provide or make available all information and other assistance
      reasonably requested by the Take-Out Investment Banks and their counsel in
      connection with their due diligence;

            (iv) take any and every commercially reasonable action necessary or
      desirable to achieve ratings of the Securities from rating agencies
      reasonably acceptable to the Take-Out Investment Banks in a time frame
      reasonably acceptable to the Take-Out Investment Banks;

            (v) make appropriate filings under the "blue sky" laws of such U.S.
      jurisdictions as the Take-Out Investment Banks determine and pay the
      reasonable fees and expenses of counsel to the Take-Out Investment Banks
      in connection therewith; provided that the Guarantor shall not be required
      to subject itself to taxation in any jurisdiction where it would not
      otherwise be so subject or subject itself to general service of process in
      such jurisdiction; and

            (vi) provide such other cooperation, assistance and information as
      is customarily provided by issuers in connection with the private
      placement of securities.

            (c) After a full marketing of the Securities, if and when requested
by the Take-Out Investment Banks after consultation with the Guarantor, the
Guarantor shall:

            (i) execute a purchase agreement with the Take-Out Investment Banks
      relating to the issuance and sale of the Securities, which shall contain
      covenants, representations and warranties, indemnities, conditions
      (including delivery of legal opinions, officers' certificates and
      auditors' comfort letters) and other provisions customary for similar
      financings for the Take-Out Investment Banks and be in form and substance
      satisfactory to the Take-Out Investment Banks and the Guarantor;

            (ii) if the Securities are offered in an Offering pursuant to Rule
      144A or Regulation S, execute a registration rights agreement with the
      Take-Out Investment Banks as contemplated by subsection (a) above, which
      shall be in form and substance satisfactory to the Take-Out Investment
      Banks and the Guarantor;

            (iii) execute an indenture relating to the Take-Out Securities,
      which shall contain provisions as the Take-Out Investment Banks may in
      their reasonable judgment determine to be appropriate in light of
      prevailing circumstances, market conditions and the Guarantor's financial
      condition and prospects and be in form and substance satisfactory to the
      Take-Out Investment Banks and the Guarantor; and

                                      -42-

            (iv) issue and sell the Securities in the amount described in
      subsection (a) of this Section 5.05 and on such terms, including interest
      rate, yield, final maturity and redemption dates and prices, as the
      Take-Out Investment Banks and the Loan Parties may in their judgment
      determine to be appropriate in light of then prevailing circumstances,
      market conditions and the Guarantor's financial condition and prospects.

The Take-Out Investment Banks shall be third-party beneficiaries of this Section
5.05(c).

                                   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) The 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
any of its officers) in connection with this Agreement 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) (except clause (v) thereof),
5.02, 5.03 or 5.04, (ii) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in Section 5.05 on its part to be
performed or observed if such failure shall remain unremedied for five days
after written notice thereof shall have been given to either Loan Party by the
Agent or any Lender, or (iii) any Loan Party shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement on its part to
be performed or observed if such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to either Loan Party by the
Agent or any Lender; or

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

                                      -43-

redeem, purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or

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

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

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

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

            (i) A Change of Control shall occur;

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

                                      -44-

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 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 Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Loan Parties and Affiliates of the Loan Parties as
though the Agent were not the Agent hereunder, without notice to or consent of
the Lenders. The Lenders acknowledge that, pursuant to such activities, the
Agent and its Affiliates may receive information regarding the Loan Parties or
their Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrowers or such Affiliates) and acknowledge that
neither the Agent nor any of its Affiliates shall be under any obligation to
provide such information to them. With respect to its Advances, the Agent (and
any of its Affiliates which may become a Lender) shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent. The terms "Lender" and "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.

            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 of 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

                                      -45-

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 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 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.

                                      -46-

            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 the 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), 2.15 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 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 or the Guarantor, to the Company at its address at One Pepsi
Way, Somers, New York 10589, Attention: General Counsel, Telecopier No. (914)
767-1161, with a copy to Secretary, Telecopier No. (914) 767-1161; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule 1 hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Agent, at 31 West 52nd Street, New York, New York 10019; or, as to
the Borrower, the Guarantor or the Agent, at such other address as shall be
designated by such party in a written 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.

                                      -47-

            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 as
set forth in the Fee Letter. 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 the 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) Whether or not the transactions contemplated hereby are
consummated, each Lender shall indemnify upon demand the Agent and each of its
Affiliates (to the extent not reimbursed by or on behalf of the Loan Parties in
accordance with the terms hereof and without limiting the obligation of the Loan
Parties to do so), pro rata, from and against any and all claims, losses,
damages, liabilities and expenses which may at any time be imposed on, incurred
by or asserted against the Agent in its capacity as such (including by any
Lender) arising out of or by reason of any investigation in any way relating to
or arising out of this Agreement or any other Loan Document, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided, however, that no Lender shall
be liable for the payment to the Agent or any of its Affiliates of any portion
of such claims, losses, damages, liabilities and expenses resulting from such
Person's gross negligence, bad faith or willful misconduct. Without limitation
of the foregoing, each Lender shall reimburse the Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including all reasonable
fees, disbursements and charges of counsel) incurred by the Agent in connection
with the

                                      -48-

preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein
or therein, to the extent that the Agent is not reimbursed for such expenses by
or on behalf of the Loan Parties. The agreements set forth in this Section
8.04(c) shall survive the payment of all Advances and other obligations
hereunder and the resignation or replacement of the Agent and shall be in
addition to and not in lieu of any other indemnification agreements contained in
any other Loan Document.

            (d) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or LIBO Rate Advance is made by the 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 the
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.

            (f) Except for action expressly required of the Agent hereunder and
under the other Loan Documents, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder and thereunder unless it shall receive
further assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 8.04(c) against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.

            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 the Borrower
against any and all of the obligations of such Loan Party or the 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.

                                      -49-

            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, the Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not 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, 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 Affiliate of 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
$5,000,000, (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

                                      -50-

Assignment and Acceptance covering all or 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 the
Borrower or the performance or observance by the 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 the 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 the 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.

            (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

                                      -51-

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 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 Borrower, 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 the 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. Any Lender selling a participation shall notify the Agent and the
Company promptly after such sale.

            (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 the Borrower furnished
to such Lender by or on behalf of any Loan Party or the Borrower; provided that,
prior to any such disclosure, the assignee or participant or proposed assignee
or participant

                                      -52-

shall agree to preserve the confidentiality of any Confidential Information
relating to the Loan Parties or the Borrower 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 Borrower received
by it from such Lender and (d) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.

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

            SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

            SECTION 8.11. Jurisdiction, Etc.

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

                                      -53-

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. THE 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.

            SECTION 8.13. Integration of Terms. This Agreement contains the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior or contemporaneous agreements or understandings,
whether written or oral, with respect thereto, provided, however, that the terms
of the Commitment Letter and the Fee Letter shall survive the execution and
delivery of this Agreement solely to the extent provided herein or therein or
incorporated herein.

                                   ARTICLE IX

                             [INTENTIONALLY OMITTED]

                                    ARTICLE X

                               GUARANTOR GUARANTEE

            SECTION 10.01. Guarantor 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.

                                      -54-

            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
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 Guarantor, the Company, any
Benefitted Party, any creditor of the Guarantor or 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 collection.

            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

                                      -55-

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-

               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/ Nicholas J. D'Alessandro
                                             -----------------------------------
                                             Name: Nicholas J. D'Alessandro
                                             Title: Vice President and Treasurer

                                       BOTTLING GROUP, LLC,
                                          as Guarantor

                                       By:   /s/ Nicholas J. D'Alessandro
                                             -----------------------------------
                                             Name: Nicholas J. D'Alessandro
                                             Title: Managing Director-Delagatee

                                       DEUTSCHE BANK AG
                                       NEW YORK BRANCH,
                                          as Agent

                                       By:   /s/ Thomas A. Foley
                                             -----------------------------------
                                             Name: Thomas A. Foley
                                             Title: Vice President

                                       By:   /s/ William G. McGinty
                                             -----------------------------------
                                             Name: William G. McGinty
                                             Title: Director

                                      -57-

COMMITMENT                             INITIAL LENDERS
$400,000,000                           CITIBANK, N.A.

                                       By:   /s/ Carolyn A. Kee
                                             -----------------------------------
                                             Name: Carolyn A. Kee
                                             Title: Vice President

$400,000,000                           CREDIT SUISSE FIRST BOSTON,
                                       ACTING THROUGH ITS
                                       CAYMAN ISLANDS BRANCH

                                       By:   /s/ Karl Studer
                                             -----------------------------------
                                             Name: Karl Studer
                                             Title: Director

                                       By:   /s/ Jay Chall
                                             -----------------------------------
                                             Name: Jay Chall
                                             Title: Director

$400,000,000                           DEUTSCHE BANK AG
                                       NEW YORK BRANCH

                                       By:   /s/ Thomas A. Foley
                                             -----------------------------------
                                             Name: Thomas A. Foley
                                             Title: Vice President

                                       By:   /s/ William G. McGinty
                                             -----------------------------------
                                             Name: William G. McGinty
                                             Title: Director

                                      -58-

                                       ARRANGERS
                                       CREDIT SUISSE FIRST BOSTON
                                       CORPORATION

                                       By:   /s/ Bill Fox
                                             -----------------------------------
                                             Name: Bill Fox
                                             Title: Vice President

                                       By:   /s/ Gregg Fatzinger
                                             -----------------------------------
                                             Name: Gregg Fatzinger
                                             Title: Vice President

                                       DEUTSCHE BANK SECURITIES INC.

                                       By:   /s/ Thomas A. Foley
                                             -----------------------------------
                                             Name: Thomas A. Foley
                                             Title: Vice President

                                       By:   /s/ William G. McGinty
                                             -----------------------------------
                                             Name: William G. McGinty
                                             Title: Director

                                       SALOMON SMITH BARNEY INC.

                                       By:   /s/ Carolyn A. Kee
                                             -----------------------------------
                                             Name: Carolyn A. Kee
                                             Title: Attorney-in-Fact

                                                                      SCHEDULE 1

                                 LENDING OFFICES




Lender                          Domestic Lending Office         Eurodollar Lending Office
                                                          
CITIBANK, N.A.                  c/o Global Markets/Loans        c/o Global Markets/Loans
                                Attention:  Laura Braak         Attention:  Laura Braak
                                Two Penns Way                   Two Penns Way
                                Suite 200                       Suite 200
                                New Castle, Delaware 19720      New Castle, Delaware 19720
                                Telephone:  (302) 894-6058      Telephone:  (302) 894-6058
                                and                             and
                                c/o Global Markets/Loans        c/o Global Markets/Loans
                                Attention:  Sue Ann Leighty     Attention:  Sue Ann Leighty
                                Two Penns Way                   Two Penns Way
                                Suite 200                       Suite 200
                                New Castle, Delaware 19720      New Castle, Delaware 19720
                                Telephone:  (302) 894-6030      Telephone:  (302) 894-6030
                                with a copy to:
                                390 Greenwich Street
                                First Floor
                                New York, New York 10013

CREDIT SUISSE FIRST BOSTON,     11 Madison Avenue               c/o 11 Madison Avenue
ACTING THROUGH ITS              Attention:  Karl Studer         Attention:  Karl Studer
CAYMAN ISLANDS BRANCH           New York, New York, 10010       New York, New York 10010
                                Telephone:  (212) 325-9163      Telephone:  (212) 325-9163

DEUTSCHE BANK AG                31 West 52nd Street             c/o 90 Hudson Street
NEW YORK BRANCH                 Attention:  Thomas Foley        Attention:  Roy Castromonte
                                New York, New York 10019        Mail Stop JCY05-0511
                                Telephone:  (212) 469-8205      Jersey City, New Jersey 07302
                                Facsimile:  (212) 469-8212      Telephone:  (201) 593-2196
                                                                Facsimile:  (201) 593-2310


                                                                      SCHEDULE 2
                                APPLICABLE MARGIN




       Rating             Facility Fee       LIBOR Margin           Drawn Cost
                                                           
       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
< or = BBB-/Baa3             20.0 bps            55.0 bps              75.0 bps


                                                                     EXHIBIT A-l
                  FORM OF NOTICE OF REVOLVING CREDIT BORROWING

                                                                 [Date]

Deutsche Bank AG New York Branch,
   as Agent for the Lenders parties to the
   Revolving Bridge Loan Credit Agreement
   referred to below
90 Hudson Street
Fifth Floor
Jersey City, New Jersey 07302

Attention:  Christopher DiBiase
            Telephone: (201) 593-2175
            Facsimile: (201) 593-2308

with a copy to:

Deutsche Bank AG New York Branch,
   as Agent for the Lenders parties to the
   Revolving Bridge Loan Credit Agreement
   referred to below
31 West 52nd Street
New York, New York 10019

Attention:  Thomas Foley
            Telephone: (212) 469-8205
            Facsimile: (212) 469-8212

Ladies and Gentlemen:

               The undersigned, The Pepsi Bottling Group, Inc. (the "Borrower"),
refers to the Revolving Bridge Loan Credit Agreement, dated as of October 2,
2002 (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 Deutsche Bank AG New York Branch, as administrative agent for said
Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the undersigned hereby requests a Revolving Credit
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Revolving Credit Borrowing (the "Proposed
Revolving Credit Borrowing") as required by Section 2.02(1) of the Credit
Agreement:

      (i) The Business Day of the Proposed Revolving Credit Borrowing is
      _______________________, ________.

                                       -2-

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

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

                                              Very truly yours,

                                              THE PEPSI BOTTLING GROUP, INC.

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

                                                                     EXHIBIT A-2

                 FORM OF NOTICE OF COMPETITIVE BID BORROWING

                                                                 [Date]

Deutsche Bank AG New York Branch,
   as Agent for the Lenders parties to the
   Revolving Bridge Loan Credit Agreement
   referred to below
90 Hudson Street
Fifth Floor
Jersey City, New Jersey 07302

Attention:  Christopher DiBiase
            Telephone: (201) 593-2175
            Facsimile: (201) 593-2308

with a copy to:

Deutsche Bank AG New York Branch,
   as Agent for the Lenders parties to the
   Revolving Bridge Loan Credit Agreement
   referred to below
31 West 52nd Street
New York, New York 10019

Attention:  Thomas Foley
            Telephone: (212) 469-8205
            Facsimile: (212) 469-8212

Ladies and Gentlemen:

               The undersigned, The Pepsi Bottling Group, Inc. (the "Borrower"),
refers to the Revolving Bridge Loan Credit Agreement, dated as of October 2,
2002 (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 Deutsche Bank AG New York Branch, 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 ___________________________

                                       -2-

               (B)      Aggregate Amount of
                        Proposed Competitive Bid
                        Borrowing                 ___________________________

               (C)      Maturity Date             ___________________________

               (D)      Interest Rate Basis       ___________________________

               (E)      Interest Payment Date(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
Competitive Bid Borrowing:

        (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
               Competitive Bid Borrowing, before and after giving effect to the
               Proposed Competitive Bid Borrowing and to the application of the
               proceeds therefrom, as though made on and as of such date; and

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

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

                                              Very truly yours,

                                              THE PEPSI BOTTLING GROUP, INC.

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

                                                                       EXHIBIT B
                        FORM OF ASSIGNMENT AND ACCEPTANCE

               Reference is made to the Revolving Bridge Loan Credit Agreement
dated as of October 2, 2002 (as amended or modified from time to time, the
"Credit Agreement"), among THE PEPSI BOTTLING GROUP, INC., a Delaware
corporation (the "Company" or the "Borrower"), BOTTLING GROUP, LLC (the
"Guarantor"), the Lenders (as defined in the Credit Agreement) and Deutsche Bank
AG New York Branch, 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 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 the Agent by the terms thereof, together with such powers and
discretion as are reasonably

                                       -2-

incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service forms required under Section 2.14 of the Credit Agreement.

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

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

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

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

               (8) This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.

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

                                       -3-

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

                                  Dated:                                   ,
                                  [NAME OF ASSIGNEE], as Assignee

                                  By:
                                      ---------------------------------------
                                      Name:
                                      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.

                                       -4-

Accepted and Approved this
_____ day of __________, ____
DEUTSCHE BANK AG NEW YORK BRANCH,
      as Agent

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

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

Approved this _____ day
of __________, ____
THE PEPSI BOTTLING GROUP, INC.

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

                                                                       EXHIBIT C

    FORM OF OPINION OF COUNSEL FOR THE COMPANY AND THE GUARANTOR

                                                                [Effective Date]
To each of the Lenders parties
   to the Revolving Bridge Loan Credit Agreement
   dated as of October 2, 2002 among The Pepsi Bottling Group, Inc.,
   said Lenders and Deutsche Bank AG New York Branch,
   as Agent for said Lenders, and to Deutsche Bank AG
   New York Branch, 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 Revolving Bridge Loan Credit Agreement, dated as of October 2, 2002 (the
"Credit Agreement "), among The Pepsi Bottling Group, Inc. (the "Company" or the
"Borrower"), Bottling Group, LLC, (the "Guarantor "), the Lenders parties
thereto and Deutsche Bank AG New York Branch, 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
$1,200,000,000. Terms defined in the Credit Agreement are used herein as therein
defined.

               I am the Senior Deputy 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").

              (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
       _____________, 2002, 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").

                                       -2-


              (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
       _________, 2002, 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 ________, 2002.

              (10) Resolutions of the Managing Directors of the Guarantor
       adopted on _________, 2002.

               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.

              (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 By-laws 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

                                       -3-

       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, results of
       operations or business of the Company or any of its Subsidiaries.

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

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

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

              (3) I express no opinion as to the effect (if any) of the law of
       any jurisdiction (other than the State of New York) wherein any Lender
       may be located or wherein enforcement of the Credit Agreement may be
       sought that limits the rates of interest that such Lender may charge or
       collect.

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

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

                                                   Very truly yours,

EX-99.C.1

                                                                  EXHIBIT (c)(1)



[SALOMON SMITH BARNEY LETTERHEAD]

September 5, 2002


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


Ladies and Gentlemen:

         You have requested our opinion as to the fairness, from a financial
point of view, to The Pepsi Bottling Group, Inc., a Delaware corporation
("Parent"), of the aggregate consideration to be paid by Parent, through its
indirect subsidiary PBG Grupo Embotellador Hispano Mexicano, S.L., a Spanish
limited liability company (the "Offeror"), pursuant to tender offers (the
"tender Offers") to be made by the Offeror in Mexico and the United States for
the outstanding shares of capital stock, including those held through ordinary
participation certificates and global depositary receipts (collectively, the
"Securities"), of Pepsi-Gemex, S.A. de C.V., a Mexican variable stock
corporation (the "Company"). We understand that pursuant to the Tender Offers,
the Offeror will offer to purchase all outstanding Securities for an aggregate
price equal to the excess of 11.612 billion Mexican pesos over the consolidated
net debt of the Company immediately prior to the commencement of the Tender
Offers. You have advised us that PepsiCo, Inc. and its affiliates ("PepsiCo")
and Mr. Enrique Molina Sobrino and certain of his affiliates, the holders of a
majority of the outstanding Securities, are expected to agree to tender their
Securities to the Offeror pursuant to the Tender Offers. In addition, we
understand that, in connection with the Tender Offers, PepsiCo has agreed to pay
to the Offeror an aggregate amount of 172.7 million Mexican pesos.

         In arriving at our opinion, we reviewed drafts, dated August 15 and
August 16, 2002 of agreements of Pepsico and Mr. Molina, respectively, to tender
their Securities to Parent pursuant to the Tender Offers, and held discussions
with certain senior officers, directors and other representatives and advisors
of Parent and certain of its respective affiliates concerning the businesses,
operations and prospects of the Company. We examined certain publicly available
business and financial information relating to the Company as well as certain
financial forecasts and other information and data for the Company on a
stand-alone basis, which were provided to or otherwise discussed with us by the
management of Parent. We reviewed the financial terms of the Tender Offers in
relation to, among other things: current and historical market prices and
trading volumes of the Securities; the historical and projected financial and
operating data of the Company; and the capitalization and financial condition of
the Company. We considered, to the extent publicly available, the financial
terms of certain other similar transactions recently








effected that we considered relevant in evaluating the Tender Offers and
analyzed certain financial, stock market and other publicly available
information relating to the businesses of other companies whose operations we
considered relevant in evaluating those of the Company. In addition to the
foregoing, we conducted such other analyses and examinations and considered such
other information and financial, economic and market criteria as we deemed
appropriate in arriving at our opinion.

         In rendering our opinion, we have assumed and relied, without
independent verification, upon the accuracy and completeness of all financial
and other information and data publicly available or furnished to or otherwise
reviewed by or discussed with us and have further relied upon the assurances of
the management of Parent that they are not aware of any facts that would make
any of such information inaccurate or misleading. Wit respect to financial
forecasts and other information and data provided to or otherwise reviewed by or
discussed with us, we have been advised by the management of Parent that such
forecasts and other information and data were reasonably prepared on bases
reflecting the best currently available estimates and judgments of the
management of Parent as to the future financial performance of the Company. We
express no view with respect to such forecasts and other information and data or
the assumptions on which they were based. We have not made or been provided with
an independent evaluation or appraisal of the assets or liabilities (contingent
or otherwise) of the Company nor have we made any physical inspection of the
properties or assets of the Company. Representatives of Parent have advised us,
and we have assumed, that, when finalized, the documents we have reviewed in
draft form, as described above, will not vary materially from such drafts.

         We were not requested to consider, and our opinion does not address,
the relative merits of the Tender Offers as compared to any alternative business
strategies that might exist for Parent or the effect of any other transaction in
which Parent and its affiliates might engage. Our opinion necessarily is based
upon information available to us and financial, stock market and other
conditions and circumstances existing and disclosed to us as of the date hereof.

         Salomon Smith Barney Inc. is acting as financial advisor to Parent in
connection with the Tender Offers. We will receive a fee for our services, a
portion of which fee is contingent upon the consummation of the Tender Offers,
and will also receive a fee upon the delivery of this opinion. In addition, we
and our affiliates have been engaged to provide certain debt financing to Parent
in connection with the Tender Offers. We also have in the past provided
investment banking services to Parent and the Company that are unrelated to the
Tender Offers, for which services we have received and may receive compensation.
In the ordinary course of our business, we and our affiliates may actively trade
or hold the securities of Parent and the Company for our own account or for the
account of our customers and, accordingly, may at any time hold a long or short
position in such securities. Salomon Smith Barney Inc. and its affiliates
(including Citigroup Inc. and its affiliates) may maintain relationships with
Parent and the Company and their respective affiliates.

         Our advisory services and the opinion expressed herein are provided
solely for the information of the Board of Directors of Parent in its evaluation
of the Tender Offers. Our opinion is not intended to be and does not constitute
a recommendation of the Tender Offers to the Board of Directors, Parent or to
anyone else or a recommendation to any holder of Securities



                                        2




as to whether such holder should tender Securities in the Tender Offers. Our
opinion may not be used for any other purpose or reproduced, disseminated,
quoted or referred to at any time, in any manner or for any purpose, nor shall
any public reference to Salomon Smith Barney Inc. be made, without our prior
written consent.

         Based upon and subject to the foregoing, our experience as investment
bankers, our work as described above and other factors we deemed relevant, we
are of the opinion that, as of the date hereof, the aggregate consideration to
be paid by Parent, through the Offeror, pursuant to the Tender Offers is fair,
from a financial point of view, to Parent.

                                            Very truly yours,


                                            /s/ SALOMON SMITH BARNEY INC.

                                            SALOMON SMITH BARNEY INC.





                                       3

EX-99.C.2

Exhibit (c)(2)

CONFIDENTIAL

BOARD PRESENTATION REGARDING PROJECT SANTA FE

August 29, 2002

PEPSI-GEMEX HISTORICAL STOCK PRICE PERFORMANCE

MAY 7, 2001 – AUGUST 23, 2002

1

PEPSI-GEMEX VALUATION ANALYSIS

         SUMMARY OF VALUATION METHODOLOGIES PERFORMED

1.	PUBLICLY TRADED COMPARABLES		2A. PRECEDENT TRANSACTIONS – MULTIPLES PAID		2B. PRECEDENT TRANSACTIONS – PREMIUMS PAID
--	Revenue, EBITDA and EBIT multiples for comparable companies in Latin America Multiples based on LTM figures and 2002 estimates	--	Multiples paid in similar beverage bottling transactions Multiples based on LTM revenues, EBITDA and EBIT	- - -	Premiums paid in public deals in Mexico and for consumer companies in Latin America Based on premiums for the period four weeks prior to announcement

3.	DISCOUNTED CASH FLOW ANALYSIS
-	Intrinsic value to PBG based on present value of projected cash flows on a stand-alone basis

2

PEPSI-GEMEX VALUATION SUMMARY

         THREE PRIMARY VALUATION METHODOLOGIES WERE USED IN ORDER TO ESTIMATE GEMEX’S VALUE ON A STAND-ALONE BASIS. PROJECTED FINANCIAL INFORMATION FOR GEMEX WERE PROVIDED BY PBG MANAGEMENT

(1)	Based on a 10-year DCF, a range of 12% — 14% WACC, and 0.5% — 1.5% perpetuity growth rate.
(2)	Based on Gemex’s GDS converted to CPO-equivalent in pesos using the GDS price and exchange rate as of April 8, 2002.
(3)	As of August 23, 2002.
(4)	Based on public tender offer price of Ps. 17.47 (see footnote 5) adjusted for Ps. 172.7 million payment from PepsiCo to PBG.
(5)	Based on gross enterprise value of Ps. 11.612 billion, less estimated net debt of Ps. 3.007 billion, plus Ps. 172.7 million payment from PepsiCo, divided by 502.5 million CPO share equivalents as of June 17, 2002.

3

PEPSI-GEMEX TRANSACTION ANALYSIS

	Operating		Transaction Multiples -				1. Publicly Traded				2A. Precedent Transactions -							3. DCF Analysis -
	Assumptions(a)		Blended Offer		Public Offer		Comparables					Multiples Paid				Implied Multiples
FV/LTM Revenues(b)	Ps. 11,854			1.0x		1.0x		0.8x	—	1.1x			1.1x	—	1.4x		1.0x		—	1.3x
FV/LTM EBITDA(b)		1,913		6.1		6.2		4.5	—	6.5			7.0	—	9.0		6.0		—	8.1
FV/LTM EBIT(b)		1,325		8.8		8.9		6.5	—	8.5			11.0	—	13.0		8.7		—	11.6
FV/2002E Revenues	Ps. 11,746			1.0x		1.0x		0.8x	—	1.1x				N/A			1.0x		—	1.3x
FV/2002E EBITDA(c)		1,938		6.0		6.1		4.5	—	6.5				N/A			5.9		—	8.0
FV/2002E EBIT(c)		1,296		9.0		9.1		6.5	—	8.5				N/A			8.9		—	11.9

	Note: 2002E figures based on Peso-denominated reported and estimated results.
(a)	Based on PBG management estimates of Gemex on a stand-alone basis.
(b)	LTM to June 30, 2002. Inflation adjusted.
(c)	Includes add-back of transaction-related costs and expenses and all restructuring charges.

2B. PRECEDENT TRANSACTIONS – PREMIUMS PAID ANALYSIS

Based on Ps. 17.12

Based on Ps. 17.47

Mean Premium

Mean Premium

PBG's Blended

Public Tender

Paid for Deals

Paid for Consumer Deals

Offer Price

Offer Price

in Mexico

in Latin America

1 Week Prior

21.7

%

24.2

%

N/A

N/A

4 Weeks Prior

29.3

31.9

26.3

%

17.6

%

4 EX-99.D.1 17 y64112exv99wdw1.txt AGREEMENT TO TENDER Exhibit (d)(1) AGREEMENT TO TENDER AGREEMENT TO TENDER (this "Agreement"), dated as of October 4, 2002, among PBG Grupo Embotellador Hispano-Mexicano S.L., a Spanish limited liability company ("PBG Hispano"), Bottling Group, LLC, a Delaware limited liability company ("BG" and together with PBG Hispano, the "Bidder") and PepsiCo, Inc. ("PepsiCo"). W I T N E S S E T H WHEREAS, Bidder is interested in acquiring for cash all of the issued and outstanding series B shares, without par value (the "Shares"), certificates of participation ("CPOs") and Global Depositary Shares ("GDSs"), together, in each case, with any coupon representing unpaid dividends as of the day of commencement of the Offers (as defined below), of Pepsi-Gemex, S.A. de C.V. (the "Company"), a corporation organized under the laws of Mexico, pursuant to one or more concurrent tender offers in Mexico and the United States (each an "Offer" and collectively, the "Offers"); WHEREAS, as of the date hereof PepsiCo owns, directly or indirectly, and either beneficially or of record, 47,470,002 CPOs and 375,900,831 Shares, representing approximately 34.4% of the total capital stock of the Company (collectively, the "Owned Securities"); WHEREAS, Bidder has requested and PepsiCo has agreed to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the premises and the mutual representations, warranties, covenants and agreements contained herein, and on the terms and subject to the conditions set forth herein, and intending to be legally bound the parties agree as follows: ARTICLE I DEFINITIONS Section 1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth or referred to below: "Affiliate" of a specified Person means any entity which such Person directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with the specified Person or, in the case of individuals, persons related by blood or marriage including former marriage. For purposes of this Agreement, neither the Company nor any of its Subsidiaries shall be considered to be an Affiliate of PepsiCo or the Molina/PepsiCo Gemex Shares Trust. The Molina/PepsiCo Gemex Shares Trust (as defined below) shall not be considered an Affiliate of PepsiCo. "Alternative Transaction" has the meaning set forth in Section 3.3. "Business Day" means a day that is a "business day" as defined under Regulation 14D under the Exchange Act and that is not a legal holiday in Mexico. "Closing" has the meaning set forth in Section 3.5(a). "CNBV" means the Comision Nacional Bancaria y de Valores of Mexico. "Consolidated Adjusted Net Debt" as of any date shall mean all short-term and long-term indebtedness, including obligations under capital leases, but not including accrued interest, of the Company and its Subsidiaries on a consolidated basis as of such date, reduced by the sum of (i) the consolidated cash and cash equivalents of the Company and its Subsidiaries as of such date, (ii) an amount equal to Ps.172,708,000 and (iii) the aggregate amount not yet received as cash as of such date by the Company from the employees of the Company and/or its Subsidiaries representing the aggregate unpaid strike price of their vested options to acquire securities of the Company (assuming all of such vested options whether exercised or not are included in calculating the Offer Price). For purposes of this calculation, all dollar denominated indebtedness of the Company and its Subsidiaries shall be converted to Pesos calculated at the average of the exchange rates reported on each of the five (5) consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the commencement of the Offers by Reuters and Bloomberg on their FXBENCH page as the closing rate for the exchange of Pesos and dollars. "Consolidated Adjusted Working Capital" as of any date shall mean (A) the consolidated current assets of the Company and its Subsidiaries as of such date, other than the consolidated cash and cash equivalents of the Company and its Subsidiaries used to compute Consolidated Adjusted Net Debt (as described above) as of such date, less (B) the consolidated current liabilities of the Company and its Subsidiaries as of such date, other than (i) the principal amount of short-term indebtedness and the principal amount of the current portion of long-term indebtedness as of such date and (ii) dividends payable as of such date. "Control" (including, with correlative meaning, the terms "Controlling," "Controlled by" and "under common Control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "CPO" means an ordinary certificate of participation of the Company, issued by Banco Nacional de Mexico, S.A. as trustee, which represents one series B share, one series D share and one series L share, each without par value, of the Company. "Escrow Agreement" shall mean the escrow agreement entered concurrently herewith among Bidder, Molina (as defined below) and The Bank of New York as the escrow agent. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expiration Date" means the date that the Mexican Offer and/or the U.S. Offer, as the case may be, expires. 2 "GDS" or "Global Depository Shares" means each Global Depositary Share issued pursuant to the Amended and Restated Deposit Agreement dated as of September 15, 1998 between the Company and The Bank of New York, as Depositary, each of which in turn represents six CPOs. "Law" means any law, rule, regulation or order of any competent governmental or regulatory authority, court or securities exchange, including the Mexican Securities Markets Law, and any other regulations or rules or applicable decrees issued thereunder, as amended from time to time. "Legal Requirements" has the meaning set forth in Section 4.2. "Material Adverse Change" shall mean any material adverse effect on the financial condition, business, properties, franchises, licenses, assets, liabilities or results of operation of the Company and its Subsidiaries, taken as a whole. "Mexican Securities Markets Law" means the Mexican Ley del Mercado de Valores. "Mexico" shall mean The United Mexican States. "Mexican Offer" means the portion of the Offers that will be conducted in, and in accordance with the securities regulations of, Mexico through the Bolsa Mexicana de Valores, S.A. de C.V. "Molina" means Enrique C. Molina Sobrino. "Molina Agreement to Tender" shall mean the agreement between Bidder and Molina dated as of October 4, 2002, substantially in the form attached hereto as Exhibit A, pursuant to which all of the Securities of the Company owned, directly or indirectly, or which may be acquired on or before the Expiration Date, by Molina and the other Molina Shareholders (as defined therein) are to be tendered in the Offers. "Molina/PepsiCo Gemex Shares Trust" shall mean the Delaware statutory business trust formed by Molina, PepsiCo and other parties pursuant to a trust agreement, dated October 6, 1995. "Offer" has the meaning set forth in the recitals. "Offers" has the meaning set forth in the recitals. "Offer Conditions" has the meaning set forth in Section 2.3. "Offer Price" has the meaning set forth in Section 2.1. "Orders" has the meaning set forth in Section 4.2. "Owned Securities" has the meaning set forth in the recitals. 3 "Person" means any individual, corporation (including any non-profit corporation), association, general or limited partnership, organization, business, limited liability company, firm, governmental entity, joint venture, estate, trust, unincorporated organization or any other entity, association or organization. "PepsiCo Securities" has the meaning set forth in Section 3.1. "PepsiCo Shareholders" are PepsiCo and the other Persons listed on Schedule 4.4. "Purchase Date" means the date of the purchase of the PepsiCo Securities by Bidder pursuant to the Offers. "SEC" means the United States Securities and Exchange Commission. "SEC Filings" means filings made by the Company with the SEC pursuant to the periodic reporting requirements contained in Sections 13(a), 13(c) or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder. "Securities" shall mean collectively the Shares, CPOs and GDSs. "Securities Authorities" shall mean all relevant federal, provincial and state securities commissions and stock exchange authorities and similar entities and authorities in the United States and Mexico, including the SEC and the CNBV. "Shares" shall have the meaning set forth in the recitals. "Subsidiary" means any corporation or entity with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock (or equity securities) or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors (or similar Persons) or any other corporation or entity which consolidates with such Person. "Tendering Shareholder" means any record or beneficial holder of Securities who tenders Securities into the Offers. "Third Party" has the meaning set forth in Section 3.3. "U.S. Business Day" means a day that is a "business day" as defined under Regulation 14D under the Exchange Act. "U.S. Offer" means the portion of the Offers that will be conducted in, and in accordance with the securities regulations of, the United States of America. Section 1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "Hereof," "Herein," and "Hereunder" and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement. 4 (b) Terms defined in the singular have a comparable meaning when used in the plural, and vice versa. (c) The terms "dollars" and "$" mean United States dollars. The terms "Ps." and "Pesos" mean Mexican Pesos. ARTICLE II TENDER OFFER Section 2.1 AGREEMENT TO COMMENCE OFFERS. Subject to the provisions of Section 2.2, Bidder shall commence, on the first Business Day after the date of this Agreement, Offers to acquire up to 100% of the Securities at a price equal to (i) in the Mexican Offer and at the election of the offerees, Ps.5.91 per Share (or Ps.17.73 per CPO) or the dollar equivalent of such Peso amount calculated as the average of the exchange rates reported on each of the five (5) consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the Expiration Date of the U.S. Offer by Reuters and Bloomberg on their FXBENCH page as the closing rate for the exchange of Pesos and dollars, and (ii) in the U.S. Offer, the dollar equivalent of Ps.5.91 per Share (or Ps.106.38 per GDS and Ps.17.73 per CPO), calculated in the same manner as described in (i), in cash to each Tendering Shareholder. The Bidder may, in its sole discretion, increase the per Security price for any reason or decrease it by the amount of all dividends for which a payment day is announced or published on or before the Expiration Date and which is payable prior to the Purchase Date at any time after the date hereof. The price per Security, or any higher or lower amount per Security as may be paid in the Offers in accordance with the foregoing, is hereinafter referred to as the "Offer Price." If the Offers are consummated, Bidder agrees to pay the Offer Price promptly, but in no event later than four (4) U.S. Business Days after the Expiration Date. Section 2.2 CONDITIONS TO COMMENCEMENT OF THE OFFERS. Bidder's obligation to commence the Offers is contingent upon the following conditions: (a) As of the date of this Agreement, (i) the Company shall have timely filed all reports required to be filed by it since January 1, 1999 pursuant to the Exchange Act and the Mexican Securities Markets Law, and each such report shall have complied as to form in all material respects to the rules and regulations promulgated under the Exchange Act or the Mexican Securities Markets Law, as applicable and (ii) at the time of their respective filing (or, if amended on or prior to five (5) Business Days prior to this Agreement and a copy of any such amendment has been delivered to Bidder, at the time of the filing of any such amendment thereof), the Company's SEC Filings as they may have been so amended shall not have contained untrue statements of material facts or omitted to state material facts required to be stated therein in order to make the statements therein, in light of the circumstances in which they were made, not misleading; (b) No change, event or development shall have occurred which would reasonably be expected to cause a Material Adverse Change; 5 (c) All the representations and warranties of PepsiCo under this Agreement shall be true and correct in all material respects as of the date Bidder commences the Offers; (d) The Company shall, as of the date of the commencement of the Offers, directly or indirectly through any of its Subsidiaries, own all of the capital stock of each of its Subsidiaries; (e) Molina and Bidder shall have executed and delivered the Molina Agreement to Tender; (f) Molina, Bidder and The Bank of New York, as the escrow agent, shall have executed and delivered the Escrow Agreement; (g) The properties listed on Schedule 2.2(g) attached hereto shall have been transferred, by conveyance of title to such real property or equity ownership of any Person which owns such real property, to the Company; (h) The Company shall have published notice of an ordinary shareholders meeting to replace and elect new members for the Board of Directors of the Company to be held as soon as practicable following the Expiration Date; (i) The uniform supply agreement dated March 30, 2000 between Uniform Design, S.A. de C.V. and the Company shall have been amended in a manner acceptable to Bidder in its sole discretion or such agreement shall have been terminated without payment of any penalty, liquidated damage or termination charge; (j) The Affiliates of Molina described in Exhibit E attached to the Molina Agreement to Tender shall have released, discharged and forever quitclaimed the Company and its Affiliates from any and all claims, liabilities or obligations, of any kind or nature whatsoever in law or in equity, known or unknown, that they ever had, now have, or may have in the future against the Company or its Affiliates for, upon or by reason of any matter, cause or thing whatsoever from the beginning of time, other than the obligations described in such Exhibit E; and (k) Guadalupe Basteris shall have executed, before a notary public in Mexico, a consent in the form attached as Exhibit C to the Molina Agreement to Tender. Section 2.3 CONDITIONS TO THE OFFERS. The Offers documents shall contain those conditions identified on Exhibit B hereto as conditions to Bidder's obligation to consummate the Offers (the "Offer Conditions"). The obligation of Bidder to consummate the Offers and accept for payment, and pay for, Securities tendered and not withdrawn shall be subject only to the Offer Conditions. Bidder reserves the right to waive any such conditions. Section 2.4 MODIFICATIONS AND EXTENSIONS OF THE OFFERS. (a) Bidder may, subject to compliance with the Exchange Act and the Mexican Securities Markets Law, modify the terms of the Offers or waive any Offer Conditions, except that without the express written consent of PepsiCo (which shall not be unreasonably withheld), 6 Bidder shall not reduce the number of Securities sought in the Offers, reduce the Offer Price (except as permitted by Section 2.1), extend the Offers (except as provided in this Section 2.4), change the form of consideration payable in the Offers or otherwise amend or modify any material term of the Offers in any manner materially adverse to PepsiCo. (b) If on the initial Expiration Date the Offer Conditions have been satisfied, Bidder reserves the right, in its sole discretion, to extend the Offers to a date that is not later than five (5) Business Days after the initial Expiration Date, solely to increase the number of Securities tendered in the Offers. (c) If on the initial Expiration Date the Offer Conditions have not been satisfied or waived, Bidder shall extend the Offers until all the Offer Conditions have been satisfied or waived, provided that Bidder shall not be required to extend the Offers to a date that is later than ten (10) Business Days after the initial Expiration Date. Bidder shall have the right, at its own election, to further extend the Offers for additional ten (10) Business Days to a date up to twenty (20) Business Days after the initial Expiration Date. ARTICLE III RIGHTS AND OBLIGATIONS OF PEPSICO Section 3.1 AGREEMENT TO TENDER. PepsiCo agrees, pursuant to the terms and conditions set forth herein, to tender (and to cause the other PepsiCo Shareholders to tender) in the Offers and to not withdraw (except as permitted in Section 3.2) all the Owned Securities and all other Securities directly or indirectly owned by PepsiCo no later than the third Business Day after the commencement of the Offers, except for Owned Securities in the Molina/PepsiCo Gemex Shares Trust and Securities acquired by PepsiCo after the date of this Agreement, which in each case PepsiCo agrees to tender and to cause to be tendered not less than two (2) Business Days before the initial Expiration Date. The securities described in the preceding sentence are collectively defined as the "PepsiCo Securities." PepsiCo further agrees to elect (and to cause the other PepsiCo Shareholders to elect) to receive the purchase price for the PepsiCo Securities they tender in the Offers in Pesos. Section 3.2 RIGHT TO RECEIVE MORE COMPETITIVE OFFERS. Nothing in this Agreement is intended in any way to restrict the PepsiCo Shareholders' ability to accept more competitive offers and no penalty will be imposed on any PepsiCo Shareholder that accepts a more competitive offer. Notwithstanding the provisions of Section 3.1, each of the PepsiCo Shareholders shall have the right to accept more competitive offers received any time prior to or during the period that the Mexican Offer and/or the U.S. Offer remain outstanding. In the event any of the PepsiCo Shareholders has tendered any or all of its Securities, it shall have the right to withdraw any or all of such Securities at any time during the period that the Mexican Offer and/or the U.S. Offer remain outstanding in order to accept more competitive offers. Section 3.3 ALTERNATIVE TRANSACTIONS. PepsiCo agrees to advise Bidder orally and in writing of any proposal or request for information it receives, or becomes aware of, in connection with or relating to an Alternative Transaction (as defined below), the material terms and conditions of such request, proposal or Alternative Transaction and the 7 identity of the Person making such request or proposal within one (1) U.S. Business Day of the receipt of such request, and shall within such period deliver to Bidder a copy of any such request, proposal or Alternative Transaction received from such Person in writing. PepsiCo will keep Bidder informed of the status and details (including amendments or proposed amendments) of any such request or proposal on a current basis. For purposes of this Agreement, "Alternative Transaction" means either (i) a transaction or series of transactions pursuant to which any Person or group of Persons (including PepsiCo and its Affiliates and excluding any transfers between the Persons Controlling, under common Control with, or Controlled by PepsiCo) other than the Company, any of its wholly-owned Subsidiaries, Bidder and any of Bidder's Subsidiaries (a "Third Party") acquires or would acquire, directly or indirectly, beneficial ownership (as defined in Rule l3d-3 under the Exchange Act) of any or all of the Securities, whether from PepsiCo, the Company or otherwise; or (ii) any other transaction pursuant to which any Third Party acquires or would acquire, directly or indirectly, assets of the Company (other than in the ordinary course of business) or control of assets of the Company or its Subsidiaries, in any case having a book value of ten percent or more of the Company's total consolidated assets, or for consideration equal to ten percent or more of the fair market value of all Securities on the date of this Agreement. Nothing in this Section 3.3 shall be interpreted to prohibit PepsiCo or any of its officers, directors or employees from complying with their fiduciary duties to the Company or require them to breach any confidentiality obligations to which they may be subject under applicable law. Section 3.4 INFORMATION. (a) PepsiCo agrees to advise and to cause each of its Affiliates or employees to advise Bidder, within one (1) U.S. Business Day, orally and in writing of any request for information or comments from any governmental agency which could impact Bidder's ability to consummate the Offers. PepsiCo agrees to provide Bidder with the opportunity to review and comment on any of PepsiCo's filings with or correspondence to the Securities Authorities relating to the Offers or this Agreement and Bidder will have the right to comment on those filings or correspondence no later than 24 hours after receipt of such filing or correspondence. PepsiCo shall not be under any obligation to accept or in any manner address such comments. Bidder shall have the right to approve (such approval not to be unreasonably withheld) any references to it contained in such filing or correspondence, provided that any failure to provide specific proposed changes within 24 hours of receipt of such filing or correspondence shall be deemed to be approval. (b) Bidder agrees to advise PepsiCo, within one (1) U.S. Business Day, orally and in writing of any request for information or comments from any governmental agency which could impact Bidder's ability to consummate the Offers. Bidder agrees to provide PepsiCo with the opportunity to review and comment on any of Bidder's filings with or correspondence to the Securities Authorities relating to the Offers or this Agreement and PepsiCo will have the right to comment on those filings or correspondence no later than 24 hours after receipt of such filing or correspondence. Bidder shall not be under any obligation to accept or in any manner address such comments. PepsiCo shall have the right to approve (such approval not to be unreasonably withheld) any references to it contained in any such filing or correspondence, provided that any failure of PepsiCo to provide to Bidder specific proposed changes in writing within 24 hours of receipt of such filing or correspondence shall be deemed to be approval. 8 (c) Each of PepsiCo and Bidder will make reasonable efforts to include each other in any oral communications they have with the Securities Authorities relating to the Offers or this Agreement. Section 3.5 PAYMENT TO BIDDER. As it is strategically important that PBG Hispano, a subsidiary of The Pepsi Bottling Group, Inc., one of PepsiCo's anchor bottlers, purchase the Company, PepsiCo has agreed to pay Ps. 172,708,000 to PBG Hispano in order to facilitate such purchase and ensure a smooth ownership transition of the Company. Such payment shall be made before the completion of the Offers. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PEPSICO PepsiCo hereby represents and warrants to Bidder as follows: Section 4.1 ORGANIZATION AND QUALIFICATION. PepsiCo is a corporation duly organized, validly existing and in good standing under the laws of the State of North Carolina with full corporate power and authority to own, lease and operate its assets and to carry on its business as now being and as heretofore conducted. Section 4.2 AUTHORITY. PepsiCo has all requisite power and authority to enter into, execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement has been duly authorized by PepsiCo. This Agreement has been duly executed and delivered by PepsiCo and constitutes the valid and binding obligation of PepsiCo, enforceable against PepsiCo in accordance with its terms. Section 4.3 NO CONFLICT. Neither the execution, delivery or performance of this Agreement nor the consummation by PepsiCo of the transactions contemplated hereby, subject to compliance with filing and other requirements under applicable law, will, directly or indirectly (with or without notice or lapse of time): (i) contravene, conflict with, or result in a violation of any federal, state, local, municipal, foreign, international, multinational or other administrative order, constitution, Law, ordinance, principle of common or civil law, regulation, statute or treaty ("Legal Requirements") applicable to it or the Molina/PepsiCo Gemex Shares Trust, or any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, made or rendered by any court, administrative agency or other governmental authority or by any arbitrator ("Orders") applicable to it or the Molina/PepsiCo Gemex Shares Trust; or (ii) contravene, conflict with, or result in a violation or breach of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any agreement, contract, obligation, promise or understanding (whether written or oral and whether express or implied) applicable to PepsiCo, any of its Affiliates or the Molina/PepsiCo Gemex Shares Trust, or by which any of PepsiCo's or its Affiliates' properties or other assets (including the PepsiCo Securities) are legally bound, except in each case, for any contravention, conflict, violation, breach or right which would not materially impair the ability of PepsiCo to perform PepsiCo's obligations hereunder. No governmental authority has commenced, or threatened in writing to commence, any proceeding 9 or action against PepsiCo or the Molina/PepsiCo Gemex Shares Trust with respect to the Offers, this Agreement or the transactions contemplated hereby and no other Person has commenced any action, proceeding, application or claim against PepsiCo or the Molina/PepsiCo Gemex Shares Trust with respect to the Offers, this Agreement or the transactions contemplated hereby, before any court, governmental, regulatory or administrative agency or commission, authority or tribunal, domestic, foreign or supranational, in each case, which would materially impair PepsiCo's ability to perform its obligations under this Agreement. Section 4.4 TITLE TO THE PEPSICO SECURITIES. As of the date hereof, PepsiCo is the indirect beneficial owner of the Owned Securities set forth on Schedule 4.4 attached hereto. The holder of record of such Securities as of the date hereof is identified on Schedule 4.4. The PepsiCo Securities have been duly issued, are fully paid and, except for the Securities in the Molina/PepsiCo Gemex Shares Trust, (i) the PepsiCo Securities are free and clear of any lien, claim, charge, restriction on transfer, other encumbrance or rights of third parties and (ii) there are no shareholder agreements, voting trusts, proxies or other agreements or understandings with respect to the PepsiCo Securities or the share capital of the Company which will prohibit, restrict or adversely affect the performance of PepsiCo's obligations under this Agreement. Upon the purchase of the PepsiCo Securities pursuant to the Offers, Bidder will own the PepsiCo Securities free and clear of any lien, claim, charge, restriction on transfer, other encumbrance or rights of third parties. ARTICLE V REPRESENTATIONS AND WARRANTIES OF BIDDER PBG Hispano and BG represent and warrant to PepsiCo, jointly and severally, as follows: Section 5.1 ORGANIZATION AND QUALIFICATION. (a) PBG Hispano is a Spanish limited liability company duly organized, validly existing and in good standing under the laws of Spain with full limited liability company power and authority to own, lease and operate its assets and to carry on its business as now being and as heretofore conducted. (b) BG is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with full limited liability company power and authority to own, lease and operate its assets and to carry on its business as now being and as heretofore conducted. Section 5.2 AUTHORITY. Each Bidder has all requisite power and authority to enter into, execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the Offers and the transactions contemplated hereby. The execution, delivery and performance of this Agreement has been duly authorized by each of PBG Hispano and BG. This Agreement has been duly executed and delivered by each Bidder and constitutes the valid and binding obligation of each Bidder, enforceable against each Bidder in accordance with its terms. 10 Section 5.3 NO CONFLICT. Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated hereby, including the commencement of the Offers, except as provided in Schedule 5.3, will, directly or indirectly (with or without notice or lapse of time): (i) require Bidder to obtain any regulatory approval, action, waiver or consent; (ii) contravene, conflict with, or result in a violation of, or give any governmental authority or other person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirements or any Orders; or (iii) contravene, conflict with, or result in a violation or breach of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any agreement, contract, obligation, promise or understanding (whether written or oral and whether express or implied) applicable to each Bidder or any of their Subsidiaries or by which any of their properties or other assets are legally bound. No governmental authority has commenced, or threatened in writing to commence, any proceeding or action against Bidder or its Affiliates with respect to the Offers, this Agreement or the transactions contemplated hereby and no other Person has commenced any action, proceeding, application or claim against Bidder or its Affiliates with respect to the Offers, this Agreement or the transactions contemplated hereby, before any court, governmental, regulatory or administrative agency or commission, authority or tribunal, domestic, foreign or supranational, in each case, which would materially impair Bidder's ability to perform its obligations under this Agreement. ARTICLE VI TERMINATION Section 6.1 TERMINATION. This Agreement may be terminated at any time: (a) by mutual written consent of PepsiCo and Bidder; (b) by PepsiCo, if Bidder has not commenced the Offers the first Business Day following the execution of this Agreement, unless Bidder has not commenced the Offers within the above time-period as a result of a breach by PepsiCo of any of its material obligations or agreements under this Agreement; (c) by Bidder, by giving written notice of such termination to PepsiCo, if PepsiCo shall have breached any of its material representations, warranties, covenants or agreements under this Agreement, and such breach shall be incapable of cure or has not been cured within ten (10) Business Days following the giving of written notice of such breach to PepsiCo; (d) by either PepsiCo or Bidder, by giving written notice of such termination to the other party, if there shall be in effect any Law that prohibits the consummation of the Offers or any transactions contemplated hereby or if consummation of the Offers or any the transactions contemplated hereby would violate any non-appealable final order, decree or judgment of any court or governmental entity having competent jurisdiction; (e) by PepsiCo, by giving written notice of such termination to Bidder, if Bidder shall have breached any of its material representations, warranties, covenants or agreements 11 under this Agreement and such breach shall be incapable of cure or has not been cured within ten (10) Business Days following the giving of written notice of such breach to Bidder; (f) by PepsiCo or Bidder, if the Offers expire or terminate in accordance with their terms without the purchase of Securities in the Offers; or (g) by Bidder, following the purchase of the PepsiCo Securities pursuant to the Offers. Section 6.2 EFFECT OF TERMINATION. In the event of the termination of this Agreement in accordance with Section 6.1 hereof, this Agreement shall thereafter become void and have no effect, and neither party shall have any liability to the other or its respective Affiliates, directors, officers or employees, provided that nothing herein will relieve any party from liability for any breach prior to such termination of any of its representations, warranties or covenants under this Agreement. ARTICLE VII MISCELLANEOUS Section 7.1 CONFIDENTIALITY. Bidder and PepsiCo will maintain in confidence, and will cause their respective Subsidiaries, Affiliates, directors, officers, employees, advisors, agents and representatives to maintain in confidence, any written, oral or other information obtained in confidence from the other party in connection with this Agreement or the transactions contemplated hereby (including any proposed offers by Bidder to acquire capital stock of the Company), unless (a) such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party, (b) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the transactions contemplated by this Agreement or (c) the furnishing or use of such information is required by legal proceedings or applicable law. Whether or not the transactions contemplated by this Agreement are consummated, each party will return or destroy as much of such written information as the other party may reasonably request. Section 7.2 FURTHER ASSURANCES. The parties each agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement. Section 7.3 GOVERNING LAW. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Section 7.4 FORUM. This Agreement shall be subject to the exclusive jurisdiction of the Federal Courts for the Southern District of New York and State courts of New York County in the State of New York. The parties irrevocably waive, to the fullest extent permitted by law, any objection or immunities to jurisdiction which they may now or hereafter have (including sovereign immunity, immunity to pre-judgment attachment, post-judgment 12 attachment and execution) to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, or any judgment entered by any court in respect hereof brought in the State of New York, and further irrevocably waive any claim that any suit, action or proceeding in the Borough of Manhattan, New York has been brought in an inconvenient forum. Section 7.5 REMEDIES CUMULATIVE. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither any failure nor any delay by either party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. Except as provided in Section 7.16, nothing in this Agreement shall convey any rights upon any person or entity which is not a party to this Agreement. Section 7.6 ENTIRE AGREEMENT. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof. This Agreement supersedes all prior agreements and understandings, written or oral, between the parties with respect to such subject matter. Section 7.7 SEVERABILITY. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. Section 7.8 AMENDMENT. This Agreement may not be amended except by a written instrument signed by each party hereto. Section 7.9 WAIVER. At any time any party hereto may (a) extend the time for the performance of any of the obligations or other acts of any other party hereto or (b) waive compliance with any of the agreements of any other party or any conditions to its own obligations, in each case, only to the extent such obligations, agreements and conditions are intended for its benefit; PROVIDED, HOWEVER, that any such extension or waiver is set forth in a writing executed by such party. Section 7.10 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement and either party's rights or obligations hereunder may not be assigned or delegated, without the prior written consent of the other party hereto, except that Bidder may assign in whole or in part, the right (but not the Bidder's obligation) to purchase the Securities to one or more of its Affiliates. Section 7.11 EXPENSES. Whether or not the purchase and sale of the Securities is consummated, each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of the Agreement and consummation of the transactions contemplated hereby. 13 Section 7.12 COUNTERPARTS; HEADINGS. This Agreement may be executed in two counterparts, each of which shall be an original, but which together shall constitute one and the same instrument. The descriptive headings of the several sections and paragraphs of this Agreement are inserted for reference only and shall not limit or otherwise affect the meaning hereof. Section 7.13 NOTICES. Any and all notices or other communications or deliveries required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given (i) five days after the mailing thereof by registered mail, return receipt requested, (ii) on the day following mailing when sent by overnight express mail or courier, signature required, and (iii) at the actual time of receipt when delivered personally, addressed to PepsiCo or Bidder at the addresses set forth below (or at such other address as any party may specify by notice to the other parties hereto given as aforesaid): If to PepsiCo, to: PepsiCo, Inc. 700 Anderson Hill Road Purchase, New York 10577 Attn: Vice President & General Counsel, Pepsi-Cola Phone: (914)253-2610 Fax: (914)249-8339 If to Bidder, to: c/o The Pepsi Bottling Group, Inc. 1 Pepsi Way Somers, NY 10589 Attn: Senior Deputy General Counsel Phone: (914) 767-7971 Fax: (914) 767-7944 With a copy to: Proskauer Rose LLP 1585 Broadway New York, NY 10036 Attn: Carlos E. Martinez, Esq. Phone:212-969-3000 Fax:212-969-2900 Section 7.14 SPECIFIC PERFORMANCE. Without limiting the rights of each party hereto to pursue other legal and equitable rights available to such party for any other party's failure to perform its obligations under this Agreement, the parties hereto acknowledge and agree 14 that the remedy at law for any failure to perform their obligations hereunder would be inadequate and that each of them shall be entitled to specific performance, injunctive relief or other equitable remedies in the event of any such failure. To the extent any party may be entitled to the benefit of any provision of law requiring any party in any suit, action or proceeding arising out of or in connection with this Agreement or any of the transactions contemplated hereby to post security for litigation costs or otherwise post a performance bond or guaranty or to take any similar action, each party hereby irrevocably waives such benefit in each case to the fullest extent now or hereafter permitted under the laws of any such other jurisdiction. Section 7.15 THIRD PARTY BENEFICIARIES. The parties hereto expressly agree that Molina is a third party beneficiary of this Agreement. Section 7.16 MONTERREY REAL PROPERTY. PepsiCo agrees that it will permit the Company to continue its current use of certain real property (the "Property") (namely, the Lot No. 26, block No. 26 and the facilities constructed thereon located at Parque Industrial Monterrey, Carretera a Miguel Aleman, Apodac, Nuevo Leon) on a rent-free basis for up to five years following the purchase of the Securities. At any time during that period, the Company may elect to have PepsiCo transfer the Property to the Company at its book value. At the end of the five year period, if the Company has not elected to have PepsiCo transfer the property to the Company, PepsiCo shall have the right to do so, at book value, on its own initiative. In any event, the Company shall be required to reimburse PepsiCo for any and all costs of ownership, maintenance, repair and remediation and shall bear all costs and taxes associated with any transfer. 15 IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the date first written above. PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L. By: /s/ Inigo Madariaga ------------------- Name: Inigo Madariaga Title: Managing Director BOTTLING GROUP, LLC By: /s/ Alfred H. Drewes ------------------- Name: Alfred H. Drewes Title: Principal Financial Officer PEPSICO, INC. By: /s/ Matthew M. McKenna ---------------------- Name: Matthew M. McKenna Title: Senior Vice President of Finance 16 EXHIBIT A TO THE AGREEMENT TO TENDER FORM OF THE MOLINA AGREEMENT TO TENDER (See Exhibit (d)(2)) EXHIBIT B TO THE AGREEMENT TO TENDER CONDITIONS OF THE CONSUMMATION OF BIDDER'S OFFERS Bidder will not be required to consummate the Offers if: (i) less than 90% of all of the outstanding shares of capital stock of the Company (including shares represented by CPOs and GDSs) on the Expiration Date are tendered into the Offers on or prior to the Expiration Date and not withdrawn, (ii) less than all of the PepsiCo Securities owned by PepsiCo and the other PepsiCo Shareholders are tendered into the Offers and not withdrawn, (iii) less than all of the Securities owned by Molina and the other Molina Shareholders are tendered into the Offers and not withdrawn, (iv) the conditions to the [Mexican Offer] [U.S. Offer] have not been satisfied or waived on or before the Expiration Date of the [Mexican Offer] [U.S. Offer] or the [Mexican Offer] [U.S. Offer] has been terminated without the purchase of any Securities, or (v) at any time before the acceptance of the Securities for payment, any of the following events occurs: 1. a material breach by Molina of any of the material provisions of the Molina Agreement to Tender, including, without limitation, a breach by Molina of the representations and warranties in Sections 5.4 and 5.5 thereof; 2. a material breach by PepsiCo of any of the material provisions of this Agreement; 3. any regulatory approval, action, waiver or consent required to consummate the Offers, including any approval of the CNBV, the SEC or any securities exchange, (a) shall not have been obtained, or shall have been obtained under conditions or restrictions that would adversely affect the Mexican Offer, the U.S. Offer or the Company or its Subsidiaries; (b) shall have been modified in any material way that would adversely affect the Mexican Offer, the U.S. Offer or the Company or (c) has been revoked; 4. (a) there shall be pending any action, suit, proceeding or claim by any person, domestic or foreign, which has a reasonable likelihood of success, or by any government, governmental authority or other regulatory or administrative agency or commission, domestic, foreign or supranational, before any court, governmental, regulatory or administrative agency or commission, authority or tribunal, domestic, foreign or supranational, or there shall be any statute, rule, regulation, order, judgment, decree or injunction applicable to the Mexican Offer or the U.S. Offer, by such governmental or administrative bodies, prohibiting, materially restricting or substantially delaying, or seeking to prohibit, materially restrict or substantially delay the consummation of the Mexican Offer or the U.S. Offer, or materially modifying or affecting the Mexican Offer or the U.S. Offer, or (b) any change, event, condition or development which has had or would reasonably be expected to result in a Material Adverse Change; 5. any filings of the Company with the SEC, the CNBV or any securities exchange shall have contained, at the time of their respective filings, untrue statements of material facts or omitted to state material facts necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading, and such untrue statements or omissions would reasonably be expected to cause a Material Adverse Change; 6. any material adverse change in the financial markets, including without limitation, (a) any general suspension of trading in any of the Securities on the NYSE or the Mexican Stock Exchange (except for daily suspensions in accordance with their respective rules or policies), (b) a declaration of a banking moratorium or imposition of limitations on the extension of credit generally in the United States or any adverse change in exchange controls in the U.S. or Mexico, or (c) any material limitations on the markets for currency in Mexico; 7. commencement of a war, armed hostilities, military coup d'etat, acts of terrorism, collapse of the government or other national or international crisis in each case involving the United States or Mexico which would reasonably be expected to result in a Material Adverse Change; 8. the Company or any of its Subsidiaries shall have, at any time after June 30, 2002, effected any change to their respective capital structure which would reasonably be expected to result in a Material Adverse Change, including, without limitation, (a) issued, sold or otherwise transferred, or proposed to do any of the foregoing, to any person, any shares of capital stock or other securities (including options to purchase shares of capital stock and any debt securities), (b) declared, paid or proposed to declare or pay any dividend or distribution on the Securities, (c) altered, or proposed to alter, any material term of any outstanding security of the Company or any of its Subsidiaries other than employee stock options consistent with the provisions of this Agreement, (d) split, combined or otherwise changed, or authorized or proposed the split, combination or other change of, the Securities or the Company's or any of its Subsidiaries' capitalization, and (e) authorized, recommended, proposed or entered into any merger, consolidation, liquidation, dissolution, business combination, joint venture, strategic alliance or similar arrangement involving any material assets, acquisition or disposition of a material amount of assets or securities, other than pursuant to the Offers; 9. the Company or any of its Subsidiaries shall have at any time after June 30, 2002 operated its business otherwise than in the ordinary course consistent with past practice, including, without limitation, (a) entered into or invested in a line of business different from those in which the Company or any of its Subsidiaries was engaged as of June 30, 2002, (b) effected any material change to its corporate structure, including, without limitation, the transfer or division of all or a significant portion of its assets, (c) disposed of, or created liens on, other than pursuant to credit facilities existing as of June 30, 2002, any material assets of the Company or any of its Subsidiaries, (d) voluntarily or involuntarily terminated or modified, in any material adverse manner, any material agreements, (g) made a material change in its accounting practices (other than as required by U.S. or Mexican GAAP) or regulatory compliance procedures, (e) waived, released, assigned, settled or compromised any claims or litigation involving amounts or other rights or assets in excess of $2,000,000, or (f) amended or authorized or proposed any amendments to the Company's Bylaws or any other organizational documents; 10. the Company and its Subsidiaries have Consolidated Adjusted Net Debt in excess of Ps.2,648,353,587 or the Company and its Subsidiaries do not have Consolidated Adjusted Working Capital of at least Ps.190,750,000; and 11. any default by the Company or any of its Subsidiaries under any indebtedness which would reasonably be expected to result in a Material Adverse Change, or which would, following the purchase of Securities in the Offers, result in a cross-default under any indebtedness of PBG or BG. SCHEDULE 5.3 TO AGREEMENT TO TENDER REGULATORY APPROVALS REQUIRED FOR THE EXECUTION, DELIVERY OR PERFORMANCE OF THIS AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT ACTIONS AND APPROVALS BY: 1. THE SEC; 2. THE COMISION NACIONAL BANCARIA Y DE VALORES OF MEXICO; 3. THE MEXICAN STOCK EXCHANGE; AND 4. THE MEXICAN FEDERAL COMPETITION COMMISSION. EX-99.D.2 18 y64112exv99wdw2.txt AGREEMENT TO TENDER Exhibit (d)(2) AGREEMENT TO TENDER AGREEMENT TO TENDER (this "Agreement"), dated as of October 4, 2002, among PBG Grupo Embotellador Hispano-Mexicano S.L., a Spanish limited liability company ("PBG Hispano"), Bottling Group, LLC, a Delaware limited liability company ("BG" and together with PBG Hispano, the "Bidder") and Enrique C. Molina Sobrino ("Molina"). W I T N E S S E T H WHEREAS, Bidder is interested in acquiring for cash all of the issued and outstanding series B shares, without par value (the "Shares"), certificates of participation, ("CPOs") and Global Depositary Shares ("GDSs"), together, in each case, with any coupon representing unpaid dividends as of the day of commencement of the Offers (as defined below), of Pepsi-Gemex, S.A. de C.V. (the "Company"), a corporation organized under the laws of Mexico, pursuant to one or more concurrent tender offers in Mexico and the United States (each an "Offer" and collectively, the "Offers"); WHEREAS, as of the date hereof Molina and the Molina Shareholders (as defined below) own, directly or indirectly, 73,750 GDSs, 200,438,030 CPOs and 331,000 Shares, representing approximately 40.0% of the total capital stock of the Company, which CPO amount and ownership percentage shall be increased by the number of CPOs which Molina purchases upon the exercise of any of his vested options, as provided herein (collectively, the "Owned Securities"); WHEREAS, in order to induce Bidder to commence the Offers, Bidder has requested and Molina has agreed to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the premises and the mutual representations, warranties, covenants and agreements contained herein, and on the terms and subject to the conditions set forth herein, and intending to be legally bound the parties agree as follows: ARTICLE I DEFINITIONS Section 1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth or referred to below: "Affiliate" of a specified Person means any entity which such Person directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with the specified Person or, in the case of individuals, persons related by blood or marriage including former marriage. For purposes of this Agreement, neither the Company nor any of its Subsidiaries shall be considered to be an Affiliate of Molina or the Molina/PepsiCo Gemex Shares Trust. The Molina/PepsiCo Gemex Shares Trust (as defined below) shall not be considered an Affiliate of PepsiCo. "Alternative Transaction" has the meaning set forth in Section 3.3(a). "Area" has the meaning set forth in Section 3.3(b)(i). "Business" has the meaning set forth in Section 3.3(c)(i). "Business Day" means a day that is a "business day" as defined under Regulation 14D under the Exchange Act and that is not a legal holiday in Mexico. "CNBV" means the Comision Nacional Bancaria y de Valores of Mexico. "Competitive Activities" has the meaning set forth in Section 3.3(b)(i). "Confidential Information" has the meaning set forth in Section 3.3(d). "Consolidated Adjusted Net Debt" as of any date shall mean all short-term and long-term indebtedness, including obligations under capital leases, but not including accrued interest, of the Company and its Subsidiaries on a consolidated basis as of such date, reduced by the sum of (i) the consolidated cash and cash equivalents of the Company and its Subsidiaries as of such date, (ii) an amount equal to Ps.172,708,000 and (iii) the aggregate amount not yet received as cash as of such date by the Company from the employees of the Company and/or its Subsidiaries representing the aggregate unpaid strike price of their vested options to acquire securities of the Company (assuming all of such vested options whether exercised or not are included in calculating the Offer Price). For purposes of this calculation, all dollar denominated indebtedness of the Company and its Subsidiaries shall be converted to Pesos calculated at the average of the exchange rates reported on each of the five (5) consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the commencement of the Offers by Reuters and Bloomberg on their FXBENCH page as the closing rate for the exchange of Pesos and dollars. "Consolidated Adjusted Working Capital" as of any date shall mean (A) the consolidated current assets of the Company and its Subsidiaries as of such date, other than the consolidated cash and cash equivalents of the Company and its Subsidiaries used to compute Consolidated Adjusted Net Debt (as described above) as of such date, less (B) the consolidated current liabilities of the Company and its Subsidiaries as of such date, other than (i) the principal amount of short-term indebtedness and the principal amount of the current portion of long-term indebtedness as of such date and (ii) dividends payable as of such date. "Control" (including, with correlative meaning, the terms "Controlling," "Controlled by" and "under common Control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. 2 "CPO" means an ordinary certificate of participation of the Company, issued by Banco Nacional de Mexico, S.A. as trustee, which represents one series B share, one series D share and one series L share, each without par value, of the Company. "Escrow Agent" means The Bank of New York, as escrow agent under the Escrow Agreement. "Escrow Agreement" shall mean the escrow agreement entered concurrently herewith among Bidder, Molina and the Escrow Agent, substantially in the form attached hereto as Exhibit A. "Escrow Amount" has the meaning set forth in Section 4.1. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expiration Date" means the date that the Mexican Offer and/or the U.S. Offer, as the case may be, expires. "GDS" or "Global Depository Shares" means each Global Depositary Share issued pursuant to the Amended and Restated Deposit Agreement dated as of September 15, 1998 between the Company and The Bank of New York, as Depositary, each of which in turn represents six CPOs. "Indemnified Parties" has the meaning set forth in Section 8.1(a). "Law" means any law, rule, regulation or order of any competent governmental or regulatory authority, court or securities exchange, including the Mexican Securities Markets Law, and any other regulations or rules or applicable decrees issued thereunder, as amended from time to time. "Legal Requirements" has the meaning set forth in Section 5.2. "Material Adverse Change" shall mean any material adverse effect on the financial condition, business, properties, franchises, licenses, assets, liabilities or results of operation of the Company and its Subsidiaries, taken as a whole. "Mexican Securities Markets Law" means the Mexican Ley del Mercado de Valores. "Mexico" shall mean The United Mexican States. "Mexican Offer" means the portion of the Offers that will be conducted in, and in accordance with the securities regulations of, Mexico through the Bolsa Mexicana de Valores, S.A. de C.V. 3 "Molina/PepsiCo Gemex Shares Trust" shall mean the Delaware statutory business trust formed by Molina, PepsiCo and other parties pursuant to a trust agreement, dated October 6, 1995. "Molina Securities" has the meaning set forth in Section 3.1. "Molina Shareholders" are Molina and the other Persons listed on Schedule 5.3. "Offer" has the meaning set forth in the recitals. "Offers" has the meaning set forth in the recitals. "Offer Conditions" has the meaning set forth in Section 2.3. "Offer Price" has the meaning set forth in Section 2.1. "Orders" has the meaning set forth in Section 5.2. "Owned Securities" has the meaning set forth in the recitals. "Pension Plan" has the meaning set forth in Section 3.6. "PepsiCo" shall mean PepsiCo, Inc. "PepsiCo Agreement to Tender" shall mean the agreement between Bidder and PepsiCo (of which Molina is an express third-party beneficiary), dated as of October 4, 2002, substantially in the form attached hereto as Exhibit B, pursuant to which all of the Securities of the Company owned, directly or indirectly, or which may be acquired on or before the Expiration Date, by PepsiCo and the other PepsiCo Shareholders (as defined therein) are to be tendered in the Offers. "Person" means any individual, corporation (including any non-profit corporation), association, general or limited partnership, organization, business, limited liability company, firm, governmental entity, joint venture, estate, trust, unincorporated organization or any other entity, association or organization. "Purchase Date" has the meaning set forth in Section 3.3(b). "SEC" means the United States Securities and Exchange Commission. "SEC Filings" means filings made by the Company with the SEC pursuant to the periodic reporting requirements contained in Sections 13(a), 13(c) or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder. "Securities" shall mean collectively the Shares, CPOs and GDSs. 4 "Securities Authorities" shall mean all relevant federal, provincial and state securities commissions and stock exchange authorities and similar entities and authorities in the United States and Mexico, including the SEC and the CNBV. "Shares" shall have the meaning set forth in the recitals. "Subsidiary" means any corporation or entity with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock (or equity securities) or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors (or similar Persons) or any other corporation or entity which consolidates with such Person. "Tendering Shareholder" means any record or beneficial holder of Securities who tenders Securities into the Offers. "Third Party" has the meaning set forth in Section 3.3(a). "Third Party Claim" has the meaning set forth in Section 8.1(b). "U.S. Business Day" means a day that is a "business day" as defined under Regulation 14D under the Exchange Act. "U.S. Offer" means the portion of the Offers that will be conducted in, and in accordance with the securities regulations of, the United States of America. Section 1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "Hereof," "Herein," and "Hereunder" and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement. (b) Terms defined in the singular have a comparable meaning when used in the plural, and vice versa. (c) The terms "dollars" and "$" mean United States dollars. The terms "Ps." and "Pesos" mean Mexican Pesos. ARTICLE II TENDER OFFER Section 2.1 AGREEMENT TO COMMENCE OFFERS. Subject to the provisions of Section 2.2, Bidder shall commence, on the first Business Day after the date of this Agreement, Offers to acquire up to 100% of the Securities at a price equal to (i) in the Mexican Offer and at the election of the offerees, Ps.5.91 per Share (or Ps.17.73 per CPO) or the dollar equivalent of such Peso amount calculated as the average of the exchange rates reported on each of the five (5) consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the 5 Expiration Date of the U.S. Offer by Reuters and Bloomberg on their FXBENCH page as the closing rate for the exchange of Pesos and dollars, and (ii) in the U.S. Offer, the dollar equivalent of Ps.5.91 per Share (or Ps.106.38 per GDS and Ps.17.73 per CPO), calculated in the same manner as described in (i), in cash to each Tendering Shareholder. The Bidder may, in its sole discretion, increase the per Security price for any reason or decrease it by the amount of all dividends for which a payment day is announced or published on or before the Expiration Date and which is payable at any time after the date hereof prior to the Purchase Date. The price per Security, or any higher or lower amount per Security as may be paid in the Offers in accordance with the foregoing, is hereinafter referred to as the "Offer Price." If the Offers are consummated, Bidder agrees to pay the Offer Price promptly, but in no event later than four (4) U.S. Business Days after the Expiration Date. Section 2.2 CONDITIONS TO COMMENCEMENT OF THE OFFERS. Bidder's obligation to commence the Offers is contingent upon the following conditions: (a) As of the date of this Agreement, (i) the Company shall have timely filed all reports required to be filed by it since January 1, 1999 pursuant to the Exchange Act and the Mexican Securities Markets Law, and each such report shall have complied as to form in all material respects to the rules and regulations promulgated under the Exchange Act or the Mexican Securities Markets Law, as applicable and (ii) at the time of their respective filing (or, if amended on or prior to five (5) Business Days prior to this Agreement and a copy of any such amendment has been delivered to Bidder, at the time of the filing of any such amendment thereof), the Company's SEC Filings as they may have been so amended shall not have contained untrue statements of material facts or omitted to state material facts required to be stated therein in order to make the statements therein, in light of the circumstances in which they were made, not misleading; (b) No change, event or development shall have occurred which would reasonably be expected to cause a Material Adverse Change; (c) All the representations and warranties of Molina under this Agreement shall be true and correct in all material respects as of the date Bidder commences the Offers; (d) The Company shall, as of the date of the commencement of the Offers, directly or indirectly through any of its Subsidiaries, own all of the capital stock of each of its Subsidiaries; (e) PepsiCo and Bidder shall have executed and delivered the PepsiCo Agreement to Tender; (f) Molina, Bidder and the Escrow Agent shall have executed and delivered the Escrow Agreement; (g) The properties listed on Schedule 2.2(g) attached hereto shall have been transferred, by conveyance of title to such real property or equity ownership of any Person which owns such real property, to the Company; 6 (h) The uniform supply agreement dated March 30, 2000 between Uniform Design, S.A. de C.V. and the Company shall have been amended in a manner acceptable to Bidder in its sole discretion or such agreement shall have been terminated without payment of any penalty, liquidated damage or termination charge; (i) The Affiliates of Molina described in Exhibit E attached hereto shall have released, discharged and forever quitclaimed the Company and its Affiliates from any and all claims, liabilities or obligations, of any kind or nature whatsoever in law or in equity, known or unknown, that they ever had, now have, or may have in the future against the Company or its Affiliates for, upon or by reason of any matter, cause or thing whatsoever from the beginning of time, other than the obligations described in Exhibit E; (j) Molina shall have entered into arrangements, reasonably satisfactory to Bidder, for the delivery of the Escrow Amount to the Escrow Agent from the aggregate Offer Price due to Molina and the other Molina Shareholders for Securities tendered by the Molina Shareholders in the Offers; and (k) Guadalupe Basteris shall have executed, before a notary public in Mexico, a consent in the form attached hereto as Exhibit C. Section 2.3 CONDITIONS TO THE OFFERS. The Offers documents shall contain those conditions identified on Exhibit D hereto as conditions to Bidder's obligation to consummate the Offers (the "Offer Conditions"). The obligation of Bidder to consummate the Offers and accept for payment, and pay for, Securities tendered and not withdrawn shall be subject only to the Offer Conditions. Bidder reserves the right to waive any such conditions. Section 2.4 MODIFICATIONS AND EXTENSIONS OF THE OFFERS. (a) Bidder may, subject to compliance with the Exchange Act and the Mexican Securities Markets Law, modify the terms of the Offers or waive any Offer Conditions, except that without the express written consent of Molina (which shall not be unreasonably withheld), Bidder shall not reduce the number of Securities sought in the Offers, reduce the Offer Price (except as permitted by Section 2.1), extend the Offers (except as provided in this Section 2.4), change the form of consideration payable in the Offers or otherwise amend or modify any material term of the Offers in any manner materially adverse to Molina. (b) If on the initial Expiration Date the Offer Conditions have been satisfied, Bidder reserves the right, in its sole discretion, to extend the Offers to a date that is not later than five (5) Business Days after the initial Expiration Date, solely to increase the number of Securities tendered in the Offers. (c) If on the initial Expiration Date the Offer Conditions have not been satisfied or waived, Bidder shall extend the Offers until all the Offer Conditions have been satisfied or waived, provided that Bidder shall not be required to extend the Offers to a date that is later than ten (10) Business Days after the initial Expiration Date. Bidder shall have the right, at its own election, to further extend the Offers for additional ten (10) Business Days to a date up to twenty (20) Business Days after the initial Expiration Date. ARTICLE III RIGHTS AND OBLIGATIONS OF MOLINA 7 Section 3.1 AGREEMENT TO TENDER. In order to induce Bidder to commence the Offers, Molina agrees, pursuant to the terms and conditions set forth herein, to tender (and to cause the other Molina Shareholders to tender) in the Offers and to not withdraw (except as permitted in Section 3.2) all the Owned Securities and all other Securities directly or indirectly owned by Molina and the other Molina Shareholders no later than the third Business Day after the commencement of the Offers, except for Owned Securities in the Molina/PepsiCo Gemex Shares Trust, Securities which have been pledged as described in Schedule 5.3 and Securities acquired by any of the Molina Shareholders after the date of this Agreement, which in each case Molina agrees to tender and to cause to be tendered not less than two (2) Business Days before the initial Expiration Date. The securities described in the preceding sentence are collectively defined as the "Molina Securities." Molina further agrees to elect (and to cause the other Molina Shareholders to elect) to receive the purchase price for the Molina Securities they tender in the Offers in dollars calculated at the Exchange Rate. Section 3.2 RIGHT TO RECEIVE MORE COMPETITIVE OFFERS. Nothing in this Agreement is intended in any way to restrict the Molina Shareholders' ability to accept more competitive offers and no penalty will be imposed on any Molina Shareholder that accepts a more competitive offer. Notwithstanding the provisions of Section 3.1, each of the Molina Shareholders shall have the right to accept more competitive offers received any time prior to or during the period that the Mexican Offer and/or the U.S. Offer remain outstanding. In the event any of the Molina Shareholders has tendered any or all of its Securities, such Molina Shareholder shall have the right to withdraw any or all of such Securities at any time during the period that the Mexican Offer and/or the U.S. Offer remain outstanding in order to accept more competitive offers. Section 3.3 ALTERNATIVE TRANSACTIONS; CONFIDENTIALITY; NO COMPETITION. (a) Molina agrees to advise Bidder orally and in writing of any proposal or request for information he receives, or becomes aware of, in connection with or relating to an Alternative Transaction (as defined below), the material terms and conditions of such request, proposal or Alternative Transaction and the identity of the Person making such request or proposal within one (1) U.S. Business Day of the receipt of such request, and shall within such period deliver to Bidder a copy of any such request, proposal or Alternative Transaction received from such Person in writing. Molina will keep Bidder informed of the status and details (including amendments or proposed amendments) of any such request or proposal on a current basis. For purposes of this Agreement, "Alternative Transaction" means either (i) a transaction or series of transactions pursuant to which any Person or group of Persons (including Molina and his Affiliates and excluding any transfers between the Persons Controlling, under common Control with, or Controlled by Molina) other than the Company, any of its wholly-owned Subsidiaries, Bidder and any of Bidder's Subsidiaries (a "Third Party") acquires or would acquire, directly or indirectly, beneficial ownership (as defined in Rule l3d-3 under the Exchange Act) of any or all of the Securities, whether from Molina, the Company or otherwise; or (ii) any other transaction pursuant to which any Third Party acquires or would acquire, directly or indirectly, assets of the Company (other than in the ordinary course of business) or control of assets of the Company or its Subsidiaries, in any case having a book value of ten percent or more 8 of the Company's total consolidated assets, or for consideration equal to ten percent or more of the fair market value of all Securities on the date of this Agreement. Nothing in this Section 3.3(a) shall be interpreted to prohibit Molina from complying with his fiduciary duties to the Company or require him to breach any confidentiality obligations to which he may be subject under applicable law. (b) Molina undertakes and covenants to Bidder that, from the date of the purchase of the Molina Securities by Bidder pursuant to the Offers (the "Purchase Date"), in accordance with the terms of this Agreement, until the fifth anniversary of the Purchase Date, he will not, for any reason whatsoever, either individually or as an officer director, stockholder, member, partner, agent, employee, consultant, principal, advisor, independent contractor, affiliate or similarly interested party of another business firm, without the prior written consent of Bidder, directly or indirectly: (i) Own, lease, manage, operate, control, advise, engage in, or own stock or otherwise own an equity or economic interest in, any Person engaged in the manufacture, marketing or wholesale sales or distribution of beverages which are competitive with the products manufactured, marketed, sold or distributed by the Company and its Subsidiaries as of the date hereof ("Competitive Activities") in Mexico (the "Area"); provided that, notwithstanding the foregoing, nothing in this Section 3.3(b)(i) will restrict or prevent in any manner Molina from maintaining a purely passive investment in any Person whose securities are listed on a national securities exchange or the NASDAQ National Market System and who is engaged in any Competitive Activities so long as the aggregate interest represented by such investments does not exceed 4% of any class of the outstanding debt or equity securities of any such Person; (ii) Divert or attempt to divert from the Company or its Subsidiaries Persons who are customers or suppliers of the Company and its Subsidiaries as of either the date hereof or the Purchase Date; or (iii) Use (A) in the Area, the name of the Company or any of its Subsidiaries or any trade names, licenses, labels, customers' lists, logos or trademarks previously or currently used or owned by the Company or any of its Subsidiaries in connection with the products of the Company or any of its Subsidiaries, or any other logos or trademarks substantially similar to any of the aforementioned logos or trademarks and (B) anywhere in the world, any of the trade secrets of the Company or any of its Subsidiaries related to prospective marketing, sales and product packaging plans; provided, however, that this clause (iii)(B) shall no longer be applicable after the first anniversary of the Purchase Date. (c) Molina undertakes and covenants to Bidder that he will not, for any reason whatsoever, either individually or as an officer, director, stockholder, member, partner, agent, 9 employee, consultant, principal, advisor, independent contractor, affiliate or similarly interested party of another business firm, without the prior written consent of Bidder, directly or indirectly: (i) From the Purchase Date until the third anniversary of the Purchase Date, solicit for employment, hire or do any act intended to divert any of the employees listed in Schedule 3.3(c)(i) attached hereto from the business of the Company, its Subsidiaries, Bidder or any Affiliates of any of them (the "Business"); provided however, that Molina may hire Mr. Luis Alejandro Bustos Olivares if Mr. Bustos employment is terminated or constructively terminated by the Company; or (ii) From the date hereof until the nine month anniversary of the Purchase Date, disparage, demean, criticize or do any other act in each case reasonably likely to cause material injury to the Business or the reputation of the Business. (d) Molina acknowledges that he and certain of his Affiliates had access to operating, financial and other information of the Company, its Subsidiaries and their respective customers including, without limitation, procedures, business strategies, and prospects and opportunities, techniques, methods and information about, or received by them, from their customers and that divulgence will irreparably harm the Company and its Subsidiaries ("Confidential Information"). Molina also acknowledges such Confidential Information provides the Company and its Subsidiaries with a competitive advantage (or that it could be used to the disadvantage of the Company or its Subsidiaries by a competitor). Molina also acknowledges the interest of the Company and its Subsidiaries in maintaining the confidentiality of such Confidential Information. Molina shall not, and shall not authorize any Person acting on his behalf to, divulge, disclose or make known in any way or use for the individual benefit of any of them or others any of such Confidential Information. The foregoing is not applicable to such of the Confidential Information (i) that is in the public domain otherwise than as a result of its unauthorized disclosure by Molina, his Affiliates or any other person; (ii) that is necessary or appropriate to be disclosed in making any filing, or in connection with obtaining any consent or approval, required for the consummation of the transactions contemplated by this Agreement; or (iii) that is required to be disclosed in connection with any legal proceedings or applicable law. Section 3.4 INFORMATION. (a) Molina agrees to advise and to cause each of his Affiliates or employees to advise Bidder, within one (1) U.S. Business Day, orally and in writing of any request for information or comments from any governmental agency which could impact Bidder's ability to consummate the Offers. Molina agrees to provide Bidder with the opportunity to review and comment on any of Molina's or the Company's filings with or correspondence to the Securities Authorities relating to the Offers or this Agreement and Bidder will have the right to comment on those filings or correspondence no later than 24 hours after receipt of such filing or correspondence. Molina shall not be under any obligation to accept or in any manner address such comments. Bidder shall have the right to approve (such approval not to be unreasonably withheld) any references to it contained in such filing or correspondence, provided that any 10 failure to provide specific proposed changes within 24 hours of receipt of such filing or correspondence shall be deemed to be approval. Molina will make reasonably efforts to cause the Company to cooperate with Bidder in connection with the Company's filings and correspondence described in this Section 3.4(a). (b) Bidder agrees to advise Molina, within one (1) U.S. Business Day, orally and in writing of any request for information or comments from any governmental agency which could impact Bidder's ability to consummate the Offers. Bidder agrees to provide Molina with the opportunity to review and comment on any of Bidder's filings with or correspondence to the Securities Authorities relating to the Offers or this Agreement and Molina will have the right to comment on those filings or correspondence no later than 24 hours after receipt of such filing or correspondence. Bidder shall not be under any obligation to accept or in any manner address such comments. Molina shall have the right to approve (such approval not to be unreasonably withheld) any references to him contained in any such filing or correspondence, provided that any failure of Molina to provide to Bidder specific proposed changes in writing within 24 hours of receipt of such filing or correspondence shall be deemed to be approval. (c) Each of Molina and Bidder will make reasonable efforts to include each other in any oral communications they have with the Securities Authorities relating to the Offers or this Agreement. Section 3.5 OPTIONS. (a) Effective upon the Purchase Date, Molina hereby (i) surrenders to the Company all his unvested options to acquire securities of the Company and (ii) releases and forever discharges the Company, Bidder and Affiliates of each of them from any and all claims, liabilities, losses, demands, rights and/or causes of action of any kind or nature whatsoever he ever had or he has against the Company, Bidder and Affiliates of each of them, whether at law or in equity, direct or indirect, fixed or contingent, whether known or unknown arising out of his unvested options. (b) Molina agrees that he will not, at any time after the date hereof, commence, maintain, prosecute, participate in as a party, or permit to be filed by any other person on his behalf, any action or proceeding of any kind, judicial or administrative, in any court or agency against the Company, Bidder or Affiliates of any of them, with respect to any of his rights to his unvested options to acquire securities of the Company. (c) Except with the consent of Bidder, Molina shall not and shall not authorize, instruct, or take any other action to cause or encourage the Company, its Board of Directors or its officers or other officials to modify, or consent to the modification of, any of the terms or conditions of the unvested options to acquire securities of the Company held by employees of the Company or its Subsidiaries. (d) Molina shall exercise all of his vested options to purchase securities of the Company and tender such securities in the Offers no less than two (2) Business Days before the initial Expiration Date pursuant to the provisions of Article III. Molina will make reasonable 11 efforts to cause the Company to advise its employees of their opportunity to exercise their vested options to acquire securities of the Company and to tender such securities into the Offers. Section 3.6 PAYMENT OF BENEFITS. (a) Molina agrees to accept in full satisfaction of his rights under the Pension Plan for Executives of Servicios Administrativos Suma, S.A. de C.V., a Subsidiary of the Company, (the "Pension Plan") and all other statutory and severance benefits to which he may become entitled at the time of his voluntary termination and/or retirement, payment from the Pension Plan in the amount of Ps.141,150,000. Bidder hereby acknowledges that Molina is entitled to receive such sum under the Pension Plan and, following the Purchase Date, shall cause the Pension Plan to promptly remit such sum to Molina after his voluntary termination or retirement from employment with the Company and its Subsidiaries, in accordance with the terms of the Pension Plan, but in no event later than fifteen (15) Business Days after such termination or retirement. (b) Molina acknowledges that his employment with the Company and/or its Subsidiaries and all agreements, arrangements and understandings relating thereto shall terminate on the Purchase Date and upon such termination, Molina hereby remises, releases, discharges and forever quitclaims, the Company and its Affiliates from any and all claims, liabilities or obligations, of any kind or nature whatsoever in law or in equity, known or unknown, that Molina ever had, now has, or may have in the future against the Company or its Affiliates for, upon or by reason of any matter, arising from Molina's employment with the Company and/or its Subsidiaries and all agreements, arrangements and understandings relating thereto, other than obligations arising under or contemplated by this Agreement. (c) Molina agrees that he will not, at any time after the date hereof, commence, maintain, prosecute, participate in as a party, or permit to be filed by any other person on his behalf, any action or proceeding of any kind, judicial or administrative, in any court or agency against the Company, Bidder or Affiliates of any of them, with respect to any of his rights under the Pension Plan or any other statutory and severance benefits to which he may become entitled at the time of his voluntary termination and/or retirement, unless the payments have not been made timely in accordance with Section 3.6(a) or Bidder is otherwise in breach of its obligation to pay Molina for the Securities in the Offers. Section 3.7 PAYMENT OF DIVIDENDS. If (i) the Offers are consummated, (ii) Bidder purchases the Molina Securities pursuant to the Offers, and (iii) the Company either pays, or announces or publishes a day for the payment of, any dividend or distribution with respect to the Securities prior to the Purchase Date, Molina shall pay Bidder, within five (5) Business Days after the Expiration Date, the aggregate amount of all such dividends or distributions paid or announced to be paid to security holders of the Company (other than dividends or distributions paid or announced to be paid to The Pepsi Bottling Group, Inc. or any of its subsidiaries, including Bidder), unless Bidder has already reduced the per Security price by the aggregate amount of dividends or distributions paid or announced to be paid with respect to the Securities as described in Section 2.1. Molina shall enter into arrangements, reasonably satisfactory to Bidder, for the payment of the aggregate amount of all such dividends or distributions paid or announced to be paid to security holders of the Company (other than dividends or distributions paid or announced to be paid to The Pepsi Bottling Group, Inc. or any of its subsidiaries, including Bidder) from the aggregate Offer Price due to Molina and the other Molina Shareholders for Securities tendered by any of the Molina Shareholders in the Offers. 12 Section 3.8 SHAREHOLDERS MEETING. (a) Molina undertakes and covenants to Bidder that he will recommend to the Board of Directors of the Company to set the date selected by Bidder (and communicated by Bidder to Molina in writing), as the date for an ordinary shareholders meeting to replace and elect new members for such Board of Directors, subject to the provisions of applicable Laws, the organizational documents of the Company, any depositary agreements to which the Company is a party and the CPO Trust Agreement among Banco Nacional de Mexico, S.A., as CPO Trustee, the Company and the holders and beneficial owners from time to time of the CPOs. (b) Molina undertakes and covenants to Bidder to use his reasonable efforts to cause the Company to publish a notice calling such shareholders meeting on the date selected by Bidder, subject to the provisions of applicable Laws, the organizational documents of the Company, any depositary agreements to which the Company is a party and the CPO Trust Agreement among Banco Nacional de Mexico, S.A., as CPO Trustee, the Company and the holders and beneficial owners from time to time of the CPOs. ARTICLE IV DELIVERY OF PAYMENTS TO ESCROW AGENT Section 4.1 DELIVERY OF PAYMENTS TO ESCROW AGENT. If the Offers are consummated and Bidder purchases the Molina Securities pursuant to the Offers, the payment of the aggregate Offer Price due to Molina and the other Molina Shareholders (net of any amount to be delivered pursuant to Section 3.7 hereof) shall be delivered to Molina and the other Molina Shareholders except for the dollar equivalent of the sum of Ps.141,150,000 calculated at the exchange rate set forth in Section 2.1 (the "Escrow Amount") that Molina agrees to cause to be delivered to the Escrow Agent to be held, pursuant to the terms and conditions of the Escrow Agreement. Section 4.2 RELEASE OF PAYMENTS FROM ESCROW AGREEMENT. The Escrow Agent shall retain the Escrow Amount as security for Molina's indemnification obligations under Section 8.1 and thereafter release it only pursuant to the terms of the Escrow Agreement. ARTICLE V REPRESENTATIONS AND WARRANTIES OF MOLINA Molina hereby represents and warrants to Bidder, as follows: Section 5.1 AUTHORITY. This Agreement constitutes the valid and binding obligation of Molina, enforceable against him in accordance with its terms. Section 5.2 NO CONFLICT. Neither the execution, delivery or performance of this Agreement nor the consummation by him of the transactions contemplated hereby, subject to compliance with filing and other requirements under applicable law, will, directly or indirectly 13 (with or without notice or lapse of time): (i) contravene, conflict with, or result in a violation of any federal, state, local, municipal, foreign, international, multinational or other administrative order, constitution, Law, ordinance, principle of common or civil law, regulation, statute or treaty ("Legal Requirements") applicable to him or any other Molina Shareholder, or any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, made or rendered by any court, administrative agency or other governmental authority or by any arbitrator ("Orders") applicable to him or any other Molina Shareholder; or (ii) contravene, conflict with, or result in a violation or breach of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any agreement, contract, obligation, promise or understanding (whether written or oral and whether express or implied) applicable to Molina, any other Molina Shareholder or any of their Affiliates or by which any of their properties or other assets are legally bound, except in each case, for any contravention, conflict, violation, breach or right which would not materially impair the ability of Molina to perform his obligations hereunder. No governmental authority has commenced, or threatened in writing to commence, any proceeding or action against Molina or any other Molina Shareholder with respect to the Offers, this Agreement or the transactions contemplated hereby and no other Person has commenced any action, proceeding, application or claim against Molina or any other Molina Shareholder with respect to the Offers, this Agreement or the transactions contemplated hereby, before any court, governmental, regulatory or administrative agency or commission, authority or tribunal, domestic, foreign or supranational, in each case, which would materially impair Molina's ability to perform his obligations under this Agreement. Section 5.3 TITLE TO THE MOLINA SECURITIES. As of the date hereof, each of the Molina Shareholders is the legal and beneficial owner of the type and number of Securities set forth opposite its name on Schedule 5.3 attached hereto. The holders of record of such Securities as of the date hereof are also identified on such Schedule. The Molina Securities have been duly issued, are fully paid and, except for the Securities in the Molina/PepsiCo Gemex Shares Trust and the Securities which have been pledged as described in Schedule 5.3, (i) the Molina Securities are free and clear of any lien, claim, charge, restriction on transfer, other encumbrance or rights of third parties, and (ii) there are no shareholder agreements, voting trusts, proxies or other agreements or understandings with respect to the Molina Securities or the share capital of the Company which will prohibit, restrict or adversely affect the performance of Molina's obligations under this Agreement. Upon the purchase of the Molina Securities pursuant to the Offers, Bidder will own the Molina Securities free and clear of any lien, claim, charge, restriction on transfer, other encumbrance or rights of third parties. Section 5.4 AFFILIATE RELATIONSHIPS. Except for obligations arising under or contemplated by this Agreement or as set forth in Exhibit E, (i) the Company and its Affiliates do not have any liabilities or obligations of any nature (whether accrued, absolute, contingent, unasserted or otherwise), known or unknown, to Molina or any of his Affiliates and (ii) neither Molina nor any of his Affiliates has any claim of any kind against the Company or any of its Subsidiaries or shareholders, members, owners, officers, directors, employees, any investment banker, financial advisor, attorney, accountant or other representative of any of them arising under any agreement, arrangement, understanding or otherwise (either directly or by virtue of an interest in an entity which has such claim) relating to the Company or any of its 14 Subsidiaries. Exhibit E presents a complete and accurate list of all agreements, arrangements and understandings between, on the one hand, Molina and/or any of his Affiliates, and, on the other hand, the Company and/or any of its Affiliates. Section 5.5 TERMINATION OF AFFILIATE RELATIONSHIPS. Molina represents that the Company and its Subsidiaries can terminate each of the agreements, arrangements and understandings listed on Exhibit E as well as any other agreement, arrangement and understanding between, on the one hand, Molina and/or any of his Affiliates, and, on the other hand, the Company and/or any of its Subsidiaries, without payment of any penalty, liquidated damage or termination charge. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BIDDER PBG Hispano and BG represent and warrant to Molina, jointly and severally, as follows: Section 6.1 ORGANIZATION AND QUALIFICATION. (a) PBG Hispano is a Spanish limited liability company duly organized, validly existing and in good standing under the laws of Spain with full limited liability company power and authority to own, lease and operate its assets and to carry on its business as now being and as heretofore conducted. (b) BG is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with full limited liability company power and authority to own, lease and operate its assets and to carry on its business as now being and as heretofore conducted. Section 6.2 AUTHORITY. Each Bidder has all requisite power and authority to enter into, execute and deliver this Agreement, to perform fully its obligations hereunder and to consummate the Offers and the transactions contemplated hereby. The execution, delivery and performance of this Agreement has been duly authorized by each of PBG Hispano and BG. This Agreement has been duly executed and delivered by each Bidder and constitutes the valid and binding obligation of each Bidder, enforceable against each Bidder in accordance with its terms. Section 6.3 NO CONFLICT. Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated hereby, including the commencement of the Offers, except as provided in Schedule 6.3, will, directly or indirectly (with or without notice or lapse of time): (i) require Bidder to obtain any regulatory approval, action, waiver or consent; (ii) contravene, conflict with, or result in a violation of, or give any governmental authority or other person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirements or any Orders; or (iii) contravene, conflict with, or result in a violation or breach of any provision of, or give any person the right to declare a default or exercise any remedy 15 under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any agreement, contract, obligation, promise or understanding (whether written or oral and whether express or implied) applicable to each Bidder or any of their Subsidiaries or by which any of their properties or other assets are legally bound. No governmental authority has commenced, or threatened in writing to commence, any proceeding or action against Bidder or its Affiliates with respect to the Offers, this Agreement or the transactions contemplated hereby and no other Person has commenced any action, proceeding, application or claim against Bidder or its Affiliates with respect to the Offers, this Agreement or the transactions contemplated hereby, before any court, governmental, regulatory or administrative agency or commission, authority or tribunal, domestic, foreign or supranational, in each case, which would materially impair Bidder's ability to perform its obligations under this Agreement. Section 6.4 NO KNOWLEDGE OF BREACH. Bidder has no actual knowledge on the date hereof of any facts or circumstances that cause the representations and warranties of Molina under Sections 5.4 and 5.5 hereof to be incorrect in any respect which would entitle Bidder to indemnification pursuant to Section 8.1 for any claims in an aggregate amount in excess of $50,000. ARTICLE VII TERMINATION Section 7.1 TERMINATION. This Agreement may be terminated at any time: (a) by mutual written consent of Molina and Bidder; (b) by Molina, if Bidder has not commenced the Offers the first Business Day following the execution of this Agreement, unless Bidder has not commenced the Offers within the above time-period as a result of a breach by Molina of any of his material obligations or agreements under this Agreement; (c) by Bidder, by giving written notice of such termination to Molina, if Molina shall have breached any of his material representations, warranties, covenants or agreements under this Agreement, and such breach shall be incapable of cure or has not been cured within ten (10) Business Days following the giving of written notice of such breach to Molina; (d) by either Molina or Bidder, by giving written notice of such termination to the other party, if there shall be in effect any Law that prohibits the consummation of the Offers or any transactions contemplated hereby or if consummation of the Offers or any the transactions contemplated hereby would violate any non-appealable final order, decree or judgment of any court or governmental entity having competent jurisdiction; (e) by Molina, by giving written notice of such termination to Bidder, if Bidder shall have breached any of its material representations, warranties, covenants or agreements under this Agreement and such breach shall be incapable of cure or has not been cured within ten (10) Business Days following the giving of written notice of such breach to Bidder; 16 (f) by Molina or Bidder, if the Offers expire or terminate in accordance with their terms without the purchase of Securities in the Offers; or (g) by Bidder, following the purchase of the Molina Securities pursuant to the Offers. Section 7.2 EFFECT OF TERMINATION. In the event of the termination of this Agreement in accordance with Section 7.1 hereof, this Agreement shall thereafter become void and have no effect, and neither party shall have any liability to the other or its respective Affiliates, directors, officers or employees, provided that nothing herein will relieve any party from liability for any breach prior to such termination of any of its representations, warranties or covenants under this Agreement. ARTICLE VIII MISCELLANEOUS Section 8.1 INDEMNIFICATION. (a) As the sole and exclusive remedy for any breach of any warranty or representation made by Molina under Sections 5.4 and 5.5 hereof, Molina agrees to indemnify Bidder, its Affiliates and the officers, directors, employees, agents, partners and shareholders of each of them (collectively, the "Indemnified Parties") for, and hold each Indemnified Party harmless from and against: (i) any and all damages, losses, claims and other liabilities of any and every kind, including, without limitation, judgments and costs of settlement, and (ii) any and all out-of- pocket costs and expenses of any and every kind, including, without limitation, reasonable fees and disbursements of counsel for such Indemnified Parties (all of which expenses periodically shall be reimbursed as incurred), in each case, arising out of or suffered or incurred in connection with any breach of any warranty or representation made by Molina under Sections 5.4 and 5.5 hereof only and for no other provisions of this Agreement or for any other reason; provided, however, that Molina shall not be liable to Bidder under any circumstances pursuant to this Section 8.1 in an amount in excess of the sum of Ps.188,200,000. (b) Bidder shall, with respect to (i) claims asserted in writing against any Indemnified Party by any third party ("Third Party Claims") and (ii) any other claims which would entitle Bidder to claim indemnification under this Section 8.1, give prompt written notice to Molina describing in reasonable detail any liabilities which might give rise to any such claims for indemnity under this Section 8.1, provided, however, that any failure to give such notice will not waive any rights of Bidder to indemnification hereunder, except to the extent that Molina is actually and materially prejudiced by the failure to so notify and then only to the extent of damages caused by the failure to notify. (c) Molina shall be entitled, at his own expense (i) to participate in the defense of any Third Party Claim, or (ii) to undertake the defense of a Third Party Claim that is for an amount not in excess of the then existing Escrow Amount (reduced by the amount of any other outstanding and unresolved or unpaid claims pursuant to this Section 8.1) and involves solely the 17 payment of money. Molina shall have fifteen (15) Business Days after receipt of the above-mentioned notice to undertake to conduct and control through counsel of his own choosing (subject to the written consent of Bidder, which consent shall not be unreasonably withheld) and at his sole risk and expense, the good faith settlement which cannot be effected without the written consent of Bidder in its sole discretion unless such settlement is for an amount not in excess of the then existing Escrow Amount (reduced by the amount of any other outstanding and unresolved or unpaid claims pursuant to this Section 8.1 and involves solely the payment of money) or defense of such claim, and Bidder shall cooperate with Molina in connection therewith; provided, that Bidder shall be entitled to participate in such settlement or defense through counsel chosen by it, the fees and expenses of such counsel shall be borne by Bidder. (d) Notwithstanding the foregoing, Molina shall not be entitled to assume the defense of any Third Party Claim if Molina does not give Bidder the timely written notice of the undertaking referred to in Section 8.1(c)(ii). (e) So long as Molina is participating in the defense of a Third Party Claim in good faith or is reasonably defending any Third Party Claim in good faith with continuity and diligence, Bidder will cooperate with Molina by providing records and information which are reasonably relevant to such Third Party Claim, at Molina's expense. Section 8.2 CONFIDENTIALITY. Bidder and Molina will maintain in confidence, and will cause their respective Subsidiaries, Affiliates, directors, officers, employees, advisors, agents and representatives to maintain in confidence, any written, oral or other information obtained in confidence from the other party in connection with this Agreement or the transactions contemplated hereby (including any proposed offers by Bidder to acquire capital stock of the Company), unless (a) such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party, (b) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the transactions contemplated by this Agreement or (c) the furnishing or use of such information is required by legal proceedings or applicable law. Whether or not the transactions contemplated by this Agreement are consummated, each party will return or destroy as much of such written information as the other party may reasonably request. Section 8.3 FURTHER ASSURANCES. The parties each agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement. Section 8.4 GOVERNING LAW. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Section 8.5 FORUM. This Agreement shall be subject to the exclusive jurisdiction of the Federal Courts for the Southern District of New York and State courts of New York County in the State of New York. The parties irrevocably waive, to the fullest extent 18 permitted by law, any objection or immunities to jurisdiction which they may now or hereafter have (including sovereign immunity, immunity to pre-judgment attachment, post-judgment attachment and execution) to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, or any judgment entered by any court in respect hereof brought in the State of New York, and further irrevocably waive any claim that any suit, action or proceeding in the Borough of Manhattan, New York has been brought in an inconvenient forum. For the purpose of proceedings in the courts described in this Section 8.5, Molina hereby irrevocably designates CT Corporation as his agent, and in the event that such agent or any successor shall cease to represent him, Molina shall promptly and irrevocably designate a successor and notify Bidder thereof, to accept on his behalf service of any and all process or other documents which may be served in any action or proceeding in any of such courts. Molina further agrees that (i) service upon such agent shall constitute valid and effective service upon Molina and that failure of such agent to give any notice of such service to Molina shall not affect the validity of such service or any judgment rendered in any action or proceeding based thereon and (ii) that service of any and all such process or other documents of Molina may also be effected by registered mail to his address as set forth in Section 8.14 hereof. Section 8.6 REMEDIES CUMULATIVE. Except for the indemnity provided under Section 8.1 in connection with a breach of any warranty or representation made by Molina under Sections 5.4 and 5.5 hereof, the rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither any failure nor any delay by either party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. Except as provided in Sections 8.1 and 8.17, nothing in this Agreement shall convey any rights upon any person or entity which is not a party to this Agreement. Bidder shall not have the right to withhold the release or payment to Molina of the Escrow Amount except in accordance with the Escrow Agreement for claims made under Section 8.1 herein. Section 8.7 ENTIRE AGREEMENT. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof. This Agreement supersedes all prior agreements and understandings, written or oral, between the parties with respect to such subject matter. Section 8.8 SEVERABILITY. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. Section 8.9 AMENDMENT. This Agreement may not be amended except by a written instrument signed by each party hereto. Section 8.10 WAIVER. At any time any party hereto may (a) extend the time for the performance of any of the obligations or other acts of any other party hereto or (b) waive compliance with any of the agreements of any other party or any conditions to his or its own 19 obligations, in each case, only to the extent such obligations, agreements and conditions are intended for its benefit; PROVIDED, HOWEVER, that any such extension or waiver is set forth in a writing executed by such party. Section 8.11 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement and either party's rights or obligations hereunder may not be assigned or delegated without the prior written consent of the other party hereto, except that Bidder may assign in whole or in part, the right (but not the Bidder's obligation) to purchase the Securities to one or more of its Affiliates. Section 8.12 EXPENSES. Whether or not the purchase and sale of the Securities is consummated, each party shall pay all costs and expenses that he or it incurs with respect to the negotiation, execution, delivery and performance of the Agreement and consummation of the transactions contemplated hereby. Section 8.13 COUNTERPARTS; HEADINGS. This Agreement may be executed in two counterparts, each of which shall be an original, but which together shall constitute one and the same instrument. The descriptive headings of the several sections and paragraphs of this Agreement are inserted for reference only and shall not limit or otherwise affect the meaning hereof. Section 8.14 NOTICES. Any and all notices or other communications or deliveries required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given (i) five days after the mailing thereof by registered mail, return receipt requested, (ii) on the day following mailing when sent by overnight express mail or courier, signature required, and (iii) at the actual time of receipt when delivered personally, addressed to Molina or Bidder at the addresses set forth below (or at such other address as any party may specify by notice to the other parties hereto given as aforesaid): If to Molina, to: Campos Eliseos No. 345 Col. Polanco 11550 Mexico, D.F. Mexico Phone: (011-5255) 5280-8111 Fax: (011-5255) 5280-5116 With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza, New York, NY 10004 Attn: Lee S. Parks, Esq. Phone: (212) 859-8000 20 Fax: (212) 859-4000 If to Bidder, to: c/o The Pepsi Bottling Group, Inc. 1 Pepsi Way Somers, NY 10589 Attn: Senior Deputy General Counsel Phone: (914) 767-7971 Fax: (914) 767-7944 With a copy to: Proskauer Rose LLP 1585 Broadway New York, NY 10036 Attn: Carlos E. Martinez, Esq. Phone:212-969-3000 Fax:212-969-2900 Section 8.15 SPECIFIC PERFORMANCE. Except for the indemnity provided under Section 8.1 in connection with a breach of any warranty or representation made by Molina under Sections 5.4 and 5.5 hereof, without limiting the rights of each party hereto to pursue other legal and equitable rights available to such party for any other party's failure to perform its obligations under this Agreement, the parties hereto acknowledge and agree that the remedy at law for any failure to perform their obligations hereunder would be inadequate and that each of them shall be entitled to specific performance, injunctive relief or other equitable remedies in the event of any such failure. To the extent any party may be entitled to the benefit of any provision of law requiring any party in any suit, action or proceeding arising out of or in connection with this Agreement or any of the transactions contemplated hereby to post security for litigation costs or otherwise post a performance bond or guaranty or to take any similar action, each party hereby irrevocably waives such benefit in each case to the fullest extent now or hereafter permitted under the laws of any such other jurisdiction. Section 8.16 SURVIVAL. Except for (a) the representations of Molina set forth in Section 5.3 with respect to title to the Molina Securities which shall survive indefinitely in the event Bidder purchases the Molina Securities pursuant to the Offers and (b) the provisions of this Article 8 which shall survive indefinitely whether or not Bidder purchases the Molina Securities pursuant to the Offers; the representations, warranties and covenants in this Agreement shall survive for three (3) years after the latest of the consummation of the Offers or the termination of this Agreement. Section 8.17 THIRD PARTY BENEFICIARIES. The parties hereto expressly agree that the Company is a third party beneficiary of Sections 3.5 and 3.6 hereof and that PepsiCo is a third party beneficiary of this Agreement. 21 IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the date first written above. PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO S.L. By: /s/ Inigo Madariaga ---------------------------------------------- Name: Inigo Madariaga Title: Managing Director BOTTLING GROUP, LLC By: /s/ Alfred H. Drewes ---------------------------------------------- Name: Alfred H. Drewes Title: Principal Financial Officer /s/ Enrique C. Molina Sobrino ---------------------------------------------- ENRIQUE C. MOLINA SOBRINO EXHIBIT A TO THE AGREEMENT TO TENDER FORM OF ESCROW AGREEMENT (See Exhibit (d)(3)) EXHIBIT B TO THE AGREEMENT TO TENDER FORM OF PEPSICO AGREEMENT TO TENDER (See Exhibit (d)(1)) EXHIBIT C TO THE AGREEMENT TO TENDER CONSENT FROM GUADALUPE BASTERIS 3 EXHIBIT D TO THE AGREEMENT TO TENDER CONDITIONS OF THE CONSUMMATION OF BIDDER'S OFFERS Bidder will not be required to consummate the Offers if: (i) less than 90% of all of the outstanding shares of capital stock of the Company (including shares represented by CPOs and GDSs) on the Expiration Date are tendered into the Offers on or prior to the Expiration Date and not withdrawn, (ii) less than all of the Securities owned by PepsiCo and the other PepsiCo Shareholders are tendered into the Offers and not withdrawn, (iii) less than all of the Securities owned by Molina and the other Molina Shareholders are tendered into the Offers and not withdrawn, (iv) the conditions to the [Mexican Offer] [U.S. Offer] have not been satisfied or waived on or before the Expiration Date of the [Mexican Offer] [U.S. Offer]or the [Mexican Offer] [U.S. Offer ] has been terminated without the purchase of any Securities, or (v) at any time before the acceptance of the Securities for payment, any of the following events occurs: 1. a material breach by Molina of any of the material provisions of this Agreement, including, without limitation, a breach by Molina of the representations and warranties in Sections 5.4 and 5.5 hereof; 2. a material breach by PepsiCo of any of the material provisions of the PepsiCo Agreement to Tender; 3. any regulatory approval, action, waiver or consent required to consummate the Offers, including any approval of the CNBV, the SEC or any securities exchange, (a) shall not have been obtained, or shall have been obtained under conditions or restrictions that would adversely affect the Mexican Offer, the U.S. Offer or the Company or its Subsidiaries; (b) shall have been modified in any material way that would adversely affect the Mexican Offer, the U.S. Offer or the Company or (c) has been revoked; 4. (a) there shall be pending any action, suit, proceeding or claim by any person, domestic or foreign, which has a reasonable likelihood of success, or by any government, governmental authority or other regulatory or administrative agency or commission, domestic, foreign or supranational, before any court, governmental, regulatory or administrative agency or commission, authority or tribunal, domestic, foreign or supranational, or there shall be any statute, rule, regulation, order, judgment, decree or injunction applicable to the Mexican Offer or the U.S. Offer, by such governmental or administrative bodies, prohibiting, materially restricting or 4 substantially delaying, or seeking to prohibit, materially restrict or substantially delay the consummation of the Mexican Offer or the U.S. Offer, or materially modifying or affecting the Mexican Offer or the U.S. Offer, or (b) any change, event, condition or development which has had or would reasonably be expected to result in a Material Adverse Change; 5. any filings of the Company with the SEC, the CNBV or any securities exchange shall have contained, at the time of their respective filings, untrue statements of material facts or omitted to state material facts necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading, and such untrue statements or omissions would reasonably be expected to cause a Material Adverse Change; 6. any material adverse change in the financial markets, including without limitation, (a) any general suspension of trading in any of the Securities on the NYSE or the Mexican Stock Exchange (except for daily suspensions in accordance with their respective rules or policies), (b) a declaration of a banking moratorium or imposition of limitations on the extension of credit generally in the United States or any adverse change in exchange controls in the U.S. or Mexico, or (c) any material limitations on the markets for currency in Mexico; 7. commencement of a war, armed hostilities, military coup d'etat, acts of terrorism, collapse of the government or other national or international crisis in each case involving the United States or Mexico which would reasonably be expected to result in a Material Adverse Change; 8. the Company or any of its Subsidiaries shall have, at any time after June 30, 2002, effected any change to their respective capital structure which would reasonably be expected to result in a Material Adverse Change, including, without limitation, (a) issued, sold or otherwise transferred, or proposed to do any of the foregoing, to any person, any shares of capital stock or other securities (including options to purchase shares of capital stock and any debt securities), (b) declared, paid or proposed to declare or pay any dividend or distribution on the Securities, (c) altered, or proposed to alter, any material term of any outstanding security of the Company or any of its Subsidiaries other than employee stock options consistent with the provisions of this Agreement, (d) split, combined or otherwise changed, or authorized or proposed the split, combination or other change of, the Securities or the Company's or any of its Subsidiaries' capitalization, and (e) authorized, recommended, proposed or entered into any merger, consolidation, liquidation, dissolution, business combination, joint venture, strategic alliance or similar arrangement involving any material assets, acquisition or disposition of a material amount of assets or securities, other than pursuant to the Offers; 9. the Company or any of its Subsidiaries shall have at any time after June 30, 2002 operated its business otherwise than in the ordinary course consistent with past practice, including, without limitation, (a) entered into or invested in a line of 5 business different from those in which the Company or any of its Subsidiaries was engaged as of June 30, 2002, (b) effected any material change to its corporate structure, including, without limitation, the transfer or division of all or a significant portion of its assets, (c) disposed of, or created liens on, other than pursuant to credit facilities existing as of June 30, 2002, any material assets of the Company or any of its Subsidiaries, (d) voluntarily or involuntarily terminated or modified, in any material adverse manner, any material agreements, (g) made a material change in its accounting practices (other than as required by U.S. or Mexican GAAP) or regulatory compliance procedures, (e) waived, released, assigned, settled or compromised any claims or litigation involving amounts or other rights or assets in excess of $2,000,000, or (f) amended or authorized or proposed any amendments to the Company's Bylaws or any other organizational documents; 10. the Company and its Subsidiaries have Consolidated Adjusted Net Debt in excess of Ps.2,648,353,587 or the Company and its Subsidiaries do not have Consolidated Adjusted Working Capital of at least Ps.190,750,000; and 11. any default by the Company or any of its Subsidiaries under any indebtedness which would reasonably be expected to result in a Material Adverse Change, or which would, following the purchase of Securities in the Offers, result in a cross-default under any indebtedness of PBG or BG. 6 EXHIBIT E TO THE AGREEMENT TO TENDER (i) List of claims of Molina and/or any of his Affiliates against the Company or any of its Affiliates or shareholders, members, owners, officers, directors, employees, any investment banker, financial advisor, attorney, accountant or other representative of any of them. (ii) List of all agreements, arrangements and understandings between, on the one hand, Molina and/or any of his Affiliates, and, on the other hand, the Company and/or any of its Affiliates.

MAXIMUM POSSIBLE CLAIM OR LIABILITY NAME OF AFFILIATE OF PRODUCT / SERVICE (IN THOUSAND OF MOLINA PROVIDED WRITTEN CONTRACT MEXICAN PESOS) ------ -------- ---------------- -------------- 1. Chevrolet Mexicana, S.A. Fleet (Vehicles and No 195 de C.V. Spare Parts) 2. Immobiliaria Troika Real Estate No 0 3. Ingenio Nueva Sugar Mill No 0 Esperanza de Pujiltic, S.A. de C.V. 4. Carrocerias Suma, S.A. de Fleet - Trailers (Truck No 416 C.V. bodies and Racks) 5. Granja Buen Agua Real Estate - Garci No 620 Crespo 6. Camiones Del Valle de Fleet No 2,055 Mexico, S.A. de C.V. (Mercedes Benz) 7. Molienda Sugar Distributor No 0 Azucarera Industrial, S.A. de C.V./Consorcio Azucarero CAZE, S.A. de C.V. 8. Comercializadora Sugar Distributor No 0 Industrial 9. Transportes de Carga Interplant Shipments - No 2,415 Especializada, S.A. - Freight (sugar) de C.V. 10. Corporacion Comercial y Rental of Two Machines Agreement dated March 0 de Servicios S.A. de C.V. used in production of 18, 2002 between jugs Corporacion Comercial y de Servicios S.A. de C.V and Procesos Plasticos, S.A. de

MAXIMUM POSSIBLE CLAIM OR LIABILITY NAME OF AFFILIATE OF PRODUCT / SERVICE (IN THOUSAND OF MOLINA PROVIDED WRITTEN CONTRACT MEXICAN PESOS) ------ -------- ---------------- -------------- C.V. 11. Uniform Design, S.A. de Uniforms Agreement dated March 0 C.V. 30, 2000 between Uniform Design, S.A. de C.V. and the Company 12. Tecnorafia, S.A. de C.V. Plastics, Labels, No 9,429 Shrinkfilm 13. Servicios Corporativos Administrative Services Agreement dated 0 Escorpion, S.A. de C.V./ January 1, 2002 between Grupo Turistico Servicios Corporativos Escorpion, S.A. de C.V. Escorpion, S.A. de C.V.and Servicios Administrativos Suma, S.A. de C.V. 14. Desarrrollos Corporativos 0 ENMO, S.A. de C.V. 15. Enrique Molina Sobrino Yes 0 16. Enrique Molina Basteris Former CEO of Gemex No 0 17. Patricia Molina Basteris Represents Uniform Design No 0 18. Claudia Molina Basteris Represents Tecnorafia No 0 19. Fernando Molina Sobrino Worked for many years No 0 for different entities (Emsa, Bepura and Gemex) 20. La Peninsular Seguros S.A. Insurance 1) Policy for the 0 Company and its Subsidiaries to cover the plants dated May 8, 2002 2) Policy for the Company and its Subsidiaries to cover

2

MAXIMUM POSSIBLE CLAIM OR LIABILITY NAME OF AFFILIATE OF PRODUCT / SERVICE (IN THOUSAND OF MOLINA PROVIDED WRITTEN CONTRACT MEXICAN PESOS) ------ -------- ---------------- -------------- Employee Group Insurance dated January 1, 2002. 21. AeroCorp 0 22. Aerotransportes Privados 0 23. Patricia Molina Basteris Owner of portion of No 0 Acapulco Property

3 SCHEDULE 2.2(g) TO AGREEMENT TO TENDER PROPERTIES THAT SHALL HAVE BEEN TRANSFERRED TO THE COMPANY AS A CONDITION OF BIDDER'S OBLIGATION TO COMMENCE THE OFFERS (i) Property located at the Federal Highway Mexico-Tehuacan Km 117.5, on Tehuacan, Puebla, Mexico; and (ii) Lot 15 "C" resulting from the subdivision of the vacant plot identified as lot 15 "B" located in Cumbres del Llano Largo of the City and Port of Acapulco, State of Guerrero. 4 SCHEDULE 3.3(c)(i) TO AGREEMENT TO TENDER LIST OF EMPLOYEES THAT MOLINA SHALL NOT SOLICIT FOR EMPLOYMENT, HIRE OR DO ANY ACT INTENDED TO DIVERT THEM FROM THE BUSINESS

Title Name of Employee ----- ---------------- Director Electropura Bernardo Trueba Murillo Director Corporativo Nuevos Proyectos Gilberto Terrones Sasso Director Regional Metropolitana Jose Bustamante Barragan Director Regional Centro Emilio Sabbatini Rios Director Corporative Mercadotecnia Oscar Munoz Vidales Director Regional Noreste Rafael Miyar Luna Director Corporativo Recursos Humanos Jose Antonio Fernandez Negrete Director Corporativo Manufactura y Logistica Dionisio Martin Garcia Director Corporativo Juridico Luis Alejandro Bustos Olivares Director Corporativo Tecnologias de Informacion Fernando Flores Gutierrez Director Regional Sureste Roger H. Evia Urbina Director Regional Sur Ursus Leeg Esquivel Director Corporativo Administracion y Finanzas Juan Manuel Munoz Martinez Gerente General Proplasa Luis Rodriguez Longo Gerente Zona de Administracion y Finanzas Roberto Padron Moncada Gerente Zona de Manufactura y Logistica Ramon Calvillo Esparza Gerente Zona de Manufactura y Logistica Juan Antonio Andrade Guzman Gerente Zona de Ventas Coahuila Eduardo Issac Rosales Munoz Gerente Corporativo de Proyectos Especiales Domingo Canizo Cosio Gerente Corporativo de Cuentas Nacionales Humberto Leal Flores Gerente Zona de Administracion y Finanzas Benjamin Martinez Abrego Gerente Zona Recursos Humanos Electropura Lorenzo Sierra Ramos Gerente Corporativo de Contraloria Eduardo Jesus Sayavedra Herrerias Gerente Zona de Ventas Region Hidalgo Alberto Cesar Perez Ramos Gerente Zona de Recursos Humanos Bernardo Cabrera Najera Gerente Zona de Ventas Region II Mario Alberto Dehesa Villafuerta Gerente Zona de Ventas Region I Raul Estrada Carranza Gerente Zona Mercados Modernos Arturo Sierra Fojo Gerente General Epecsa Rafael Covarrubias Lopez Gerente Zona de Distribucion Eduardo Lopez Portillo Loaiza Gerente Zona de Ventas Region Izcalli Joel Alfredo Martinez Quintero Gerente Zona Administracion y Finanzas Alberto Jorge Ramos Burguete Gerente Zona de Ventas Chihuahua Alejandro Castellanos Luna Gerente zona de Ventas Refresco Alfredo Solis Rubio Gerente Zona de Ventas La Laguna Alfredo Torres Ramirez Gerente Zona de Ventas Refresco Centro Antonio Riveroll Esperon Gerente Zona de Recursos Humanos Antonio Sarmiento Esquinca Gerente Zona Logistica y Flota Apolonia Sanchez Sosa Gerente Zona de Ventas Agua Centro Armando Alvarez Perez

5

Title Name of Employee ----- ---------------- Gerente Zona Operaciones Foraneas Armando Frigollet Gomez Gerente Corporativo de Gastos Cooperativos Arturo Castillo Guzman Gerente Zona Operaciones Metropolitana Arturo Langle Vazquez Gerente Zona de Desarrollo de Mercados Carlos David Fernandez Perez Gerente Zona Manufactura Carlos Lerma Bonilla Gerente Corporativo de Sueldos y Organizacion Carlos Manuel Mendoza Lugo Gerente Zona Administracion y Finanzas Carlos Mar Mar Gerente Corporativo de Ingenieria y Proyectos David Pang Castillo Gerente Zona Administracion y Finanzas Denny Ayala Castillo Gerente Corporativo de Auditoria Interna Eduardo Gerardo Rios Monroy Gerente Zona de Ventas Refresco Toluca-Morelos Fernando Luis Remes Tostado Gerente Zona de Recursos Humanos Francisco Cervera Contreras Gerente Zona de mercados Modernos Francisco Javier Tatto Garcia Gerente Zona de Recursos Humanos Francisco Olivaraes Uribe Gerente Corporativo de Relaciones con Inversionistas Irma Montemayor Schivy Gerente Zona de Ventas Monterrey Isaias Rosales Munoz Gerente Zona de Ventas Golfo Jaime Martin de la Torre Gerente Zona de Ventas Frontera Jesus Manuel Hernandez Aguilar Gerente Corporativo de Tesoreria Jesus Romo Rocha Gerente Corporativo de Mercadotecnia Joel Rizo Gutierrez Gerente Zona de Recursos Humanos Jorge Pulido Cruz Gerente Coporativo de Planeacion Jose Antonio Morales Bernal Gerente Corporativo de Compras Jose Luis Almaraz Kladiano Gerente Zona Desarrollo de Mercado Juan Jose Cabello Wallace Gerente Corporativo de Logistica Miguel Angel Rodriguez Parra Gerente Corporativo de Capacitacion y Desarrollo Miriam Piso Reiter Gerente Zona Manufactura y Logistica Pablo Ibarra Gonzalez Gerente Zona de Ventas Refresco Guerrero Roberto Anorve Guillen Gerente Zona de Manufactura y Logistica Roman Baqueiro Ramos Gerente Zona de Ventas Electropura Ruben Mota Acosta Gerente Zona de Administracion y Finanzas Samuel Fuentes Perez Gerente Zona Desarrollo de Mercado Sanchez Munoz Alejandro Gerente Zona Manufactura y Logistica Sergio Ortiz Flores Gerente Zona de Distribucion Sergio Sanchez Velasco Gerente Zona de Ventas Agua Sur Mario Lopez Tinoco Gerente Zona de Desarrollo de Mercados Alfonso Noriega Ortiz Gerente Zona de Ventas Refresco Bajio Artemio Rodriguez Larios Gerente Corporativo de Relaciones Laborales Gabriel Cuevas Estrada Gerente Corporativo de Cuentas por Cobrar Lusi Antonio Correa Noyola Gerente General Garci Crespo Jose Kuri Pastjane Gerente Corporativo Edgar Shaadi Shaadi Sub-Gerente Corporativo Tomas Ramos

6 SCHEDULE 6.3 TO AGREEMENT TO TENDER REGULATORY APPROVALS REQUIRED FOR THE EXECUTION, DELIVERY OR PERFORMANCE OF THIS AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT ACTIONS AND APPROVALS BY: 1. THE SEC; 2. THE COMISION NACIONAL BANCARIA Y DE VALORES OF MEXICO; 3. THE MEXICAN STOCK EXCHANGE; AND 4. THE MEXICAN FEDERAL COMPETITION COMMISSION. EX-99.D.3 19 y64112exv99wdw3.txt ESCROW AGREEMENT Exhibit (d)(3) ESCROW AGREEMENT This Escrow Agreement (the "Agreement") is made as of the 4th day of October 2002 by and among PBG Grupo Embotellador Hispano-Mexicano, S.L., a Spanish limited liability company ("PBG Hispano"), Bottling Group, LLC, a Delaware limited liability company ("BG" and together with PBG Hispano, the "Bidder"), Enrique C. Molina Sobrino ("Molina") and The Bank of New York, a New York banking corporation (the "Escrow Agent"). WHEREAS, Molina and Bidder have entered on the date hereof into an Agreement to Tender (the "Agreement to Tender") pursuant to which Molina agreed to tender and not withdraw (except as permitted in section 3.2 of the Agreement to Tender) the Molina Securities (as such term is defined in the Agreement to Tender) in the Offers (as such term is defined in the Agreement to Tender); WHEREAS, pursuant to the Agreement to Tender, Molina has certain indemnification obligations to Bidder (the "Obligations"); WHEREAS, pursuant to the Agreement to Tender, the parties agreed that from the purchase price for the Molina Securities, a sum equal to the U.S. dollar equivalent of Ps.141,150,000 calculated at the exchange rate set forth in Section 2.1 of the Agreement to Tender (the "Indemnity Amount") shall be delivered to the Escrow Agent to be held as provided herein; and WHEREAS, capitalized terms used herein but not defined shall have the meanings ascribed to them in the Agreement to Tender. NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter contained, the parties hereto agree as follows: 1. Delivery of Escrow Amount. (a) Prior or on the date hereof, Molina shall have entered into arrangements, reasonably satisfactory to Bidder for the delivery of the Indemnity Amount to the Escrow Agent from the aggregate Offer Prices due to Molina and the other Molina Shareholders if, in accordance with the terms of the Agreement to Tender, Molina tenders and causes to be tendered the Molina Securities in the Offers and Bidder accepts the tender of the Molina Securities. (b) The Escrow Agent shall, upon receipt of the Indemnity Amount deposit such amount (such amount plus any interest accrued or other income earned thereon, the "Escrow Amount") in an escrow account that it shall create (the "Escrow Account"), and will hold the Escrow Amount in accordance with the terms and conditions of this Agreement. 1 2. Escrow Fund Income. (a) The Escrow Agent shall invest any monies held in the Escrow Account in any of the following investments (collectively, "Permitted Investments") as directed in writing by Molina from time to time: (i) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities not exceeding one year; (ii) certificates of deposit and eurodollar time deposits, in each case with maturities not exceeding one year, and overnight bank deposits with any domestic commercial bank having capital and surplus in excess of $500,000,000; (iii) commercial paper rated A-1 or the equivalent thereof by Standard & Poor's Corporation or P-1 or the equivalent thereof by Moody's Investors Service, Inc.; and (iv) any other investment to which both Molina and Bidder may agree, and in each case maturing within six months after the date of the delivery of the Indemnity Amount to the Escrow Agent; provided, however, if the amount of monies held in the Escrow Account is insufficient to make an investment in any Permitted Investment, the Escrow Agent shall invest such monies in a money market account of the Escrow Agent or a New York money center bank designated by Molina. (b) Any interest accruing from time to time in the Escrow Account shall be paid to Molina, monthly, unless otherwise directed by Molina; provided that to the extent the Escrow Account has incurred any losses as a result of the liquidation of investments made by the Escrow Agent, the Escrow Agent shall withhold in the Escrow Account from such interest payments to be made to Molina an amount equal to the lesser of (i) the total amount of interest to be paid to Molina and (ii) the aggregate amount of such losses. Molina acknowledges that payment of any interest earned on the monies held in the Escrow Account will be subject to backup withholding penalties unless a properly completed Internal Revenue Service Form W-8 certification is submitted to Escrow Agent. For tax purposes, the monies held in the Escrow Account shall be the property of Molina and all interest and other income earned on such monies shall be the income of Molina. Molina shall, if necessary, file tax returns and, if necessary, the Escrow Agent shall file a Form 1099 consistent with such treatment. 3. Assurances. Molina and Bidder each shall at the request of the other execute and deliver all other documents and take all such further action as the parties may reasonably request in order to effect the purposes and provisions of this Agreement. 4. Default. Remedies. (a) In the event that, at any time, Bidder shall, reasonably and in good faith, assert a claim for indemnification pursuant to Section 8.1 of the Agreement to Tender (a "Claim"), Bidder shall deliver to Molina and the Escrow Agent a written notice (the "Indemnification Notice"), which Indemnification Notice shall specify, in reasonable detail, (i) the basis for the Claim and (ii) the estimated amount of such Claim together with fees and costs related to such Claim determined in good faith by the Bidder (the "Indemnity Estimate"). If the actual damages are determined to be greater than the 2 Indemnity Estimate, Bidder shall not be limited in its remedies to the Indemnity Estimate. If the actual damages are determined to be less than the Indemnity Estimate, any amount previously paid to Bidder with respect to such Claim which is in excess of the actual damages shall be returned promptly to the Escrow Account and disbursed only in accordance with its terms. Molina shall have a period of fifteen (15) Business Days following receipt of the Indemnity Notice within which to deliver to Bidder and Escrow Agent a written notice (the "Response Notice"), which Response Notice shall advise Bidder either (A) that Molina agrees that Bidder is entitled to indemnification pursuant to Section 8.1 of the Agreement to Tender with respect to the Claim and that Molina agrees with the Indemnity Estimate set forth in the Indemnity Notice, or (B) that Molina does not agree that Bidder is entitled to indemnification pursuant to Section 8.1 of the Agreement to Tender with respect to the Claim or that Molina does not agree with the Indemnity Estimate set forth in the Indemnity Notice. If (i) Molina shall advise Bidder, in the Response Notice as provided in clause (A) of this Section 4(a) or (ii) Molina fails to send to Bidder a Response Notice within the fifteen (15) Business Day period described above, then no dispute shall exist and the Escrow Agent shall, if so instructed by Bidder, deliver to Bidder the Indemnity Estimate from the Escrow Amount. If, on the other hand, Molina shall advise Bidder in the Response Notice as provided in clause (B) above (specifying in reasonable detail Molina's disagreement), a dispute (the "Dispute") shall be deemed to exist between Bidder and Molina. (b) Bidder and Molina shall endeavor in good faith to resolve the Dispute by direct consultation and negotiation with each other. In the event Bidder and Molina are unable to resolve the Dispute within ten (10) Business Days after receipt of the Response Notice, the Dispute shall be finally settled by arbitration in New York City under the international arbitration rules of the American Arbitration Association ("AAA"), before a panel of three arbitrators selected in accordance with said rules; provided however, that a Dispute arising from a Third Party Claim shall not be submitted to arbitration until ten (10) Business Days after such Third Party Claim has been reduced to a final judgment not subject to further appeal or has otherwise been settled in accordance with the procedures of Section 8 of the Agreement to Tender. The arbitral tribunal and the AAA in administering the dispute shall also give effect to the Expedited Procedures of the commercial arbitration rules of the AAA. The official language of the arbitration shall be English. Each party shall bear the expenses of its own counsel and witnesses. The costs of the arbitration proceeding shall be borne by the non-prevailing party. The arbitral tribunal shall not have the power to add to, modify or change any provisions of this Agreement. If the arbitral tribunal determines the amount of Molina's indemnification obligation with respect to the related Claim, the Escrow Agent shall, upon receipt from Bidder of a copy of such determination and an instruction from Bidder to pay Bidder the amount of such determination, pay to Bidder the amount of such determination from the Escrow Amount. 5. Rights, Duties and Immunities of the Escrow Agent. (a) Acceptance by the Escrow Agent of its duties under this Agreement is subject to the following terms and conditions, which all parties to this Agreement hereby agree shall govern and control the rights, duties and immunities of the Escrow Agent: 3 (i) The duties and obligations of the Escrow Agent are purely ministerial in nature and are determined solely by the express provisions of this Agreement. (ii) The Escrow Agent shall not be responsible in any manner whatsoever for any failure or inability of the parties to this Agreement, or of anyone else, to honor any of the provisions of this Agreement. (iii) The parties hereto will reimburse and indemnify the Escrow Agent for, and hold it harmless against, any loss, liability, damage or expense, including but not limited to counsel fees and expenses arising out of or in connection with its acceptance of, or the performance of its duties and obligations under, this Agreement, except for losses, liabilities, damages and expenses caused by the willful misconduct or gross negligence of the Escrow Agent. In no event will the Escrow Agent be liable for any loss of asset value or consequential, indirect or special damages. The obligations set forth in this Section 5(a)(iii) shall survive the termination of this Agreement. (iv) The Escrow Agent may act in reliance upon any signature believed by it to be genuine and may assume that any person who has been designated by Bidder or Molina to give written instructions, notice of receipt or make any statements in connection with the provisions hereof is authorized to do so. The Escrow Agent shall have no duty to make inquiry as to the genuineness, accuracy or validity of any statements or instruments or any signatures on any statements or instructions. Bidder and Molina agree that, for the purposes of this Agreement, the names and true signatures of each individual authorized to act on behalf of each of them will be set forth on a separate writing as drafted by the parties if either of them elects to have another person or entity to act on their behalf. Subject to the provisions of this Agreement, in the event that the Escrow Agent is uncertain as to its duties or the manner in which any of its duties shall be performed, the Escrow Agent shall notify Bidder and Molina, and the Escrow Agent need not take any action or perform any act until the uncertainty is resolved to the satisfaction of the Escrow Agent. (v) The Escrow Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, or for anything which it may do or refrain from doing in connection herewith, except its own fraud, willful misconduct or gross negligence. (vi) The Escrow Agent may seek the advice of such legal counsel as it deems necessary in the event of any dispute or question as to the construction of any of the provisions of this Agreement or its duties hereunder, and it shall incur no liability and shall be fully protected in respect of any action taken, omitted or suffered by it in accordance with the opinion of such counsel. (vii) The Escrow Agent makes no representation as to the validity, value, genuineness or collectibility of any security, document or instrument held by or delivered to it. 4 (b) If the Escrow Agent has any doubts as to whether or not it should release all or any part of the Escrow Amount, the Escrow Agent may, at the Escrow Agent's option, deposit such Escrow Amount with the clerk of the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, County of New York upon commencement of an action in the nature of an interpleader and the Escrow Agent shall thereupon be released and discharged from any and all further obligations arising in connection with this Agreement. (c) The parties agree that in the event that the Escrow Agent becomes unable to perform its duties under this Agreement, Bidder and Molina, shall jointly designate a new Escrow Agent to perform the obligations under this Agreement. (d) If at any time the Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects the Escrow Amount (including, but not limited to, orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the Escrow Amount), the Escrow Agent shall provide written notice thereof to Bidder and Molina within three Business Days in accordance with the notice provisions in Section 7(f) of this Agreement. 6. Termination; Distribution of Escrow Amount. (a) This Escrow Agreement shall terminate on the third year anniversary of the Purchase Date; provided, however, that in the event that a Dispute(s) exists on such date, this Agreement shall remain in effect until the resolution of such Dispute(s). Notwithstanding anything to the contrary, this Agreement shall terminate upon distribution of all of the property held in the Escrow Account from the Escrow Account pursuant to the terms and conditions of this Agreement. (b) The Escrow Agent shall deliver to Molina, on every six-month anniversary of the Purchase Date until the third year anniversary of the Purchase Date (each such six month anniversary, a "Release Date"), an amount equal to the lesser of (i) one sixth of the U.S. dollar equivalent of Ps.141,150,000 calculated at the exchange rate set forth in Section 2.1 of the Agreement to Tender or (ii) the excess, if any, of any remaining Escrow Amount before giving effect to any amount to be released on such Release Date over the aggregate Indemnity Estimate of all unpaid Claim(s) and of all Claim(s) that are the subject of a Dispute(s) as of such date. (c) If, on the third year anniversary of the Purchase Date, there are no unpaid Claim(s) or existing Dispute(s), the then remaining Escrow Amount shall be promptly released to Molina, but in no event shall such release be made more than five (5) Business Days after such third year anniversary. If an unpaid Claim(s) or a Dispute(s) exists on the sixth Release Date, Section 6(b) hereof shall continue to be applicable and the then remaining Escrow Amount shall be held by the Escrow Agent until such Claim(s) is paid or Dispute(s) is resolved, at which time the then remaining Escrow Amount shall be promptly released to Molina, but in no event shall such release be made 5 more than five (5) Business Days after the date on which all such Claim(s) is paid or such Dispute(s) is resolved. (d) A Dispute shall be resolved upon the earlier of (i) an agreement, duly executed between Bidder and Molina, specifying the resolution of such Dispute or (ii) the entry of a final judgment not subject to further appeal by a court as provided in Section 7(b) hereof. (e) Molina and the Bidder may remove the Escrow Agent at any time by giving the Escrow Agent a thirty (30) calendar day prior written notice signed by both Molina and the Bidder. The Escrow Agent may resign by giving Molina and the Bidder a thirty (30) calendar day prior written notice thereof. 7. Miscellaneous. (a) Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, and the rights to the parties shall be governed by, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. (b) Forum. This Agreement shall be subject to the exclusive jurisdiction of the Federal Courts for the Southern District of New York and State courts of New York County in the State of New York. The parties irrevocably waive, to the fullest extent permitted by law, any objection or immunities to jurisdiction which they may now or hereafter have (including sovereign immunity, immunity to pre-judgment attachment, post-judgment attachment and execution) to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, or any judgment entered by any court in respect hereof brought in the State of New York, and further irrevocably waive any claim that any suit, action or proceeding in the Borough of Manhattan, New York has been brought in an inconvenient forum. For the purpose of proceedings in the courts described in this Section 7(b), Molina hereby irrevocably designates CT Corporation as his agent, and in the event that such agent or any successor shall cease to represent him, Molina shall promptly and irrevocably designate a successor and notify Bidder thereof, to accept on his behalf service of any and all process or other documents which may be served in any action or proceeding in any of such courts. Molina further agrees that (i) service upon such agent shall constitute valid and effective service upon Molina and that failure of such agent to give any notice of such service to Molina shall not affect the validity of such service or any judgment rendered in any action or proceeding based thereon and (ii) that service of any and all such process or other documents of Molina may also be effected by registered mail to his address as set forth in Section 7(f) hereof. (c) Remedies Cumulative; No Third Party Beneficiaries. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither any failure nor any delay by any party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further 6 exercise of such right, power or privilege or the exercise of any other right, power or privilege. Nothing in this Agreement shall convey any rights upon any person or entity that is not a party to this Agreement. (d) Entire Agreement. This Agreement and the Agreement to Tender constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof. This Agreement supersedes all prior agreements and understandings, written or oral, between the parties with respect to such subject matter. (e) Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. (f) Notices. Any and all notices or other communications or deliveries required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given (i) five days after the mailing thereof by registered mail, return receipt requested, (ii) on the day following mailing when sent by overnight express mail or courier, signature required, and (iii) at the actual time of receipt when delivered personally, addressed to Molina, Bidder or the Escrow Agent at the addresses set forth below (or at such other address as any party may specify by notice to the other parties hereto given as aforesaid): If to Molina, to: Campos Eliseos No. 345 Col. Polanco 11550 Mexico, D.F., Mexico Phone: (011-5255) 5280-8111 Fax: (011-5255) 5280-5116 With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza, New York, NY 10004 Attn: Lee S. Parks, Esq. Phone: (212) 859-8000 Fax: (212) 859-4000 If to Bidder, to: c/o The Pepsi Bottling Group 1 Pepsi Way Somers, NY 10589 7 Attn: Senior Deputy General Counsel Phone: (914) 767-7971 Fax: (914) 767-7944 With a copy to: Proskauer Rose LLP 1585 Broadway New York, NY 10036 Attn: Carlos E. Martinez, Esq. Phone: (212) 969-3000 Fax: (212) 969-2900 If to the Escrow Agent, to: The Bank of New York Insurance/Escrow Unit, 8th Floor West 101 Barclay Street New York, New York 10286 Attn: Carlos R. Luciano, Assistant Vice President Phone: (212) 815-3195 Fax: (212) 815-5877 (g) Amendment. This Agreement may not be amended except by a written instrument signed by each party hereto. (h) Escrow Agent Fees. The fees of the Escrow Agent for acting as such under this Agreement shall be paid by Bidder. (i) Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement and each party's rights hereunder may not be assigned without the prior written consent of the other parties hereto, except that Bidder may assign, in whole or in part, its rights hereunder to one or more of its Affiliates; provided that, Bidder has given Molina prior written notice of any such assignment. (j) Counterparts; Headings. This Agreement may be executed in two counterparts, each of which shall be an original, but which together shall constitute one and the same instrument. The descriptive headings of the several sections and paragraphs of this Agreement are inserted for reference only and shall not limit or otherwise affect the meaning hereof. 8 IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the date first written above. PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L. By: /s/ Inigo Madariaga _______________________ Name: Inigo Madariaga Title: Managing Director BOTTLING GROUP, LLC By: /s/ Alfred H. Drewes _______________________ Name: Alfred H. Drewes Title: Principal Financial Officer /s/ Enrique C. Molina Sobrino -------------------------- ENRIQUE C. MOLINA SOBRINO THE BANK OF NEW YORK, as Escrow Agent By: /s/ Carlos R. Luciano _______________________ Name: Carlos R. 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EX-99.D.1

                                                                  Exhibit (d)(1)



                               AGREEMENT TO TENDER


            AGREEMENT TO TENDER (this "Agreement"), dated as of October 4,
2002, among PBG Grupo Embotellador Hispano-Mexicano S.L., a Spanish limited
liability company ("PBG Hispano"), Bottling Group, LLC, a Delaware limited
liability company ("BG" and together with PBG Hispano, the "Bidder") and
PepsiCo, Inc. ("PepsiCo").

                               W I T N E S S E T H


            WHEREAS, Bidder is interested in acquiring for cash all of the
issued and outstanding series B shares, without par value (the "Shares"),
certificates of participation ("CPOs") and Global Depositary Shares ("GDSs"),
together, in each case, with any coupon representing unpaid dividends as of the
day of commencement of the Offers (as defined below), of Pepsi-Gemex, S.A. de
C.V. (the "Company"), a corporation organized under the laws of Mexico, pursuant
to one or more concurrent tender offers in Mexico and the United States (each an
"Offer" and collectively, the "Offers");

            WHEREAS, as of the date hereof PepsiCo owns, directly or indirectly,
and either beneficially or of record, 47,470,002 CPOs and 375,900,831 Shares,
representing approximately 34.4% of the total capital stock of the Company
(collectively, the "Owned Securities");

            WHEREAS, Bidder has requested and PepsiCo has agreed to enter into
this Agreement.

            NOW, THEREFORE, in consideration of the foregoing and the premises
and the mutual representations, warranties, covenants and agreements contained
herein, and on the terms and subject to the conditions set forth herein, and
intending to be legally bound the parties agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

            Section 1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth or referred to below:

            "Affiliate" of a specified Person means any entity which such Person
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with the specified Person or, in the
case of individuals, persons related by blood or marriage including former
marriage. For purposes of this Agreement, neither the Company nor any of its
Subsidiaries shall be considered to be an Affiliate of PepsiCo or the
Molina/PepsiCo Gemex Shares Trust. The Molina/PepsiCo Gemex Shares Trust (as
defined below) shall not be considered an Affiliate of PepsiCo.

            "Alternative Transaction" has the meaning set forth in Section 3.3.


            "Business Day" means a day that is a "business day" as defined under
Regulation 14D under the Exchange Act and that is not a legal holiday in Mexico.

            "Closing" has the meaning set forth in Section 3.5(a).

            "CNBV" means the Comision Nacional Bancaria y de Valores of Mexico.

            "Consolidated Adjusted Net Debt" as of any date shall mean all
short-term and long-term indebtedness, including obligations under capital
leases, but not including accrued interest, of the Company and its Subsidiaries
on a consolidated basis as of such date, reduced by the sum of (i) the
consolidated cash and cash equivalents of the Company and its Subsidiaries as of
such date, (ii) an amount equal to Ps.172,708,000 and (iii) the aggregate amount
not yet received as cash as of such date by the Company from the employees of
the Company and/or its Subsidiaries representing the aggregate unpaid strike
price of their vested options to acquire securities of the Company (assuming all
of such vested options whether exercised or not are included in calculating the
Offer Price). For purposes of this calculation, all dollar denominated
indebtedness of the Company and its Subsidiaries shall be converted to Pesos
calculated at the average of the exchange rates reported on each of the five (5)
consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the
commencement of the Offers by Reuters and Bloomberg on their FXBENCH page as the
closing rate for the exchange of Pesos and dollars.

            "Consolidated Adjusted Working Capital" as of any date shall mean
(A) the consolidated current assets of the Company and its Subsidiaries as of
such date, other than the consolidated cash and cash equivalents of the Company
and its Subsidiaries used to compute Consolidated Adjusted Net Debt (as
described above) as of such date, less (B) the consolidated current liabilities
of the Company and its Subsidiaries as of such date, other than (i) the
principal amount of short-term indebtedness and the principal amount of the
current portion of long-term indebtedness as of such date and (ii) dividends
payable as of such date.

            "Control" (including, with correlative meaning, the terms
"Controlling," "Controlled by" and "under common Control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

            "CPO" means an ordinary certificate of participation of the Company,
issued by Banco Nacional de Mexico, S.A. as trustee, which represents one series
B share, one series D share and one series L share, each without par value, of
the Company.

            "Escrow Agreement" shall mean the escrow agreement entered
concurrently herewith among Bidder, Molina (as defined below) and The Bank of
New York as the escrow agent.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Expiration Date" means the date that the Mexican Offer and/or the
U.S. Offer, as the case may be, expires.

                                       2

            "GDS" or "Global Depository Shares" means each Global Depositary
Share issued pursuant to the Amended and Restated Deposit Agreement dated as of
September 15, 1998 between the Company and The Bank of New York, as Depositary,
each of which in turn represents six CPOs.

            "Law" means any law, rule, regulation or order of any competent
governmental or regulatory authority, court or securities exchange, including
the Mexican Securities Markets Law, and any other regulations or rules or
applicable decrees issued thereunder, as amended from time to time.

            "Legal Requirements" has the meaning set forth in Section 4.2.

            "Material Adverse Change" shall mean any material adverse effect on
the financial condition, business, properties, franchises, licenses, assets,
liabilities or results of operation of the Company and its Subsidiaries, taken
as a whole.

            "Mexican Securities Markets Law" means the Mexican Ley del
Mercado de Valores.

            "Mexico" shall mean The United Mexican States.

            "Mexican Offer" means the portion of the Offers that will be
conducted in, and in accordance with the securities regulations of, Mexico
through the Bolsa Mexicana de Valores, S.A. de C.V.

            "Molina" means Enrique C. Molina Sobrino.

            "Molina Agreement to Tender" shall mean the agreement between Bidder
and Molina dated as of October 4, 2002, substantially in the form attached
hereto as Exhibit A, pursuant to which all of the Securities of the Company
owned, directly or indirectly, or which may be acquired on or before the
Expiration Date, by Molina and the other Molina Shareholders (as defined
therein) are to be tendered in the Offers.

            "Molina/PepsiCo Gemex Shares Trust" shall mean the Delaware
statutory business trust formed by Molina, PepsiCo and other parties pursuant to
a trust agreement, dated October 6, 1995.

            "Offer" has the meaning set forth in the recitals.

            "Offers" has the meaning set forth in the recitals.

            "Offer Conditions" has the meaning set forth in Section 2.3.

            "Offer Price" has the meaning set forth in Section 2.1.

            "Orders" has the meaning set forth in Section 4.2.

            "Owned Securities" has the meaning set forth in the recitals.

                                       3

            "Person" means any individual, corporation (including any non-profit
corporation), association, general or limited partnership, organization,
business, limited liability company, firm, governmental entity, joint venture,
estate, trust, unincorporated organization or any other entity, association or
organization.

            "PepsiCo Securities" has the meaning set forth in Section 3.1.

            "PepsiCo Shareholders" are PepsiCo and the other Persons listed on
Schedule 4.4.

            "Purchase Date" means the date of the purchase of the PepsiCo
Securities by Bidder pursuant to the Offers.

            "SEC" means the United States Securities and Exchange
Commission.

            "SEC Filings" means filings made by the Company with the SEC
pursuant to the periodic reporting requirements contained in Sections 13(a),
13(c) or 15(d) of the Exchange Act and the rules and regulations promulgated
thereunder.

            "Securities" shall mean collectively the Shares, CPOs and GDSs.

            "Securities Authorities" shall mean all relevant federal, provincial
and state securities commissions and stock exchange authorities and similar
entities and authorities in the United States and Mexico, including the SEC and
the CNBV.

            "Shares" shall have the meaning set forth in the recitals.

            "Subsidiary" means any corporation or entity with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
(or equity securities) or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors (or similar Persons)
or any other corporation or entity which consolidates with such Person.

            "Tendering Shareholder" means any record or beneficial holder of
Securities who tenders Securities into the Offers.

            "Third Party" has the meaning set forth in Section 3.3.

            "U.S. Business Day" means a day that is a "business day" as
defined under Regulation 14D under the Exchange Act.

            "U.S. Offer" means the portion of the Offers that will be
conducted in, and in accordance with the securities regulations of, the
United States of America.

            Section 1.2 OTHER DEFINITIONAL PROVISIONS.

            (a) The words "Hereof," "Herein," and "Hereunder" and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement.

                                       4

            (b) Terms defined in the singular have a comparable meaning when
used in the plural, and vice versa.

            (c) The terms "dollars" and "$" mean United States dollars. The
terms "Ps." and "Pesos" mean Mexican Pesos.

                                   ARTICLE II

                                  TENDER OFFER

            Section 2.1 AGREEMENT TO COMMENCE OFFERS. Subject to the provisions
of Section 2.2, Bidder shall commence, on the first Business Day after the date
of this Agreement, Offers to acquire up to 100% of the Securities at a price
equal to (i) in the Mexican Offer and at the election of the offerees, Ps.5.91
per Share (or Ps.17.73 per CPO) or the dollar equivalent of such Peso amount
calculated as the average of the exchange rates reported on each of the five (5)
consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the
Expiration Date of the U.S. Offer by Reuters and Bloomberg on their FXBENCH page
as the closing rate for the exchange of Pesos and dollars, and (ii) in the U.S.
Offer, the dollar equivalent of Ps.5.91 per Share (or Ps.106.38 per GDS and
Ps.17.73 per CPO), calculated in the same manner as described in (i), in cash to
each Tendering Shareholder. The Bidder may, in its sole discretion, increase the
per Security price for any reason or decrease it by the amount of all dividends
for which a payment day is announced or published on or before the Expiration
Date and which is payable prior to the Purchase Date at any time after the date
hereof. The price per Security, or any higher or lower amount per Security as
may be paid in the Offers in accordance with the foregoing, is hereinafter
referred to as the "Offer Price." If the Offers are consummated, Bidder agrees
to pay the Offer Price promptly, but in no event later than four (4) U.S.
Business Days after the Expiration Date.

            Section 2.2 CONDITIONS TO COMMENCEMENT OF THE OFFERS. Bidder's
obligation to commence the Offers is contingent upon the following conditions:

            (a) As of the date of this Agreement, (i) the Company shall have
timely filed all reports required to be filed by it since January 1, 1999
pursuant to the Exchange Act and the Mexican Securities Markets Law, and each
such report shall have complied as to form in all material respects to the rules
and regulations promulgated under the Exchange Act or the Mexican Securities
Markets Law, as applicable and (ii) at the time of their respective filing (or,
if amended on or prior to five (5) Business Days prior to this Agreement and a
copy of any such amendment has been delivered to Bidder, at the time of the
filing of any such amendment thereof), the Company's SEC Filings as they may
have been so amended shall not have contained untrue statements of material
facts or omitted to state material facts required to be stated therein in order
to make the statements therein, in light of the circumstances in which they were
made, not misleading;

            (b) No change, event or development shall have occurred which would
reasonably be expected to cause a Material Adverse Change;

                                       5

            (c) All the representations and warranties of PepsiCo under this
Agreement shall be true and correct in all material respects as of the date
Bidder commences the Offers;

            (d) The Company shall, as of the date of the commencement of the
Offers, directly or indirectly through any of its Subsidiaries, own all of the
capital stock of each of its Subsidiaries;

            (e) Molina and Bidder shall have executed and delivered the Molina
Agreement to Tender;

            (f) Molina, Bidder and The Bank of New York, as the escrow agent,
shall have executed and delivered the Escrow Agreement;

            (g) The properties listed on Schedule 2.2(g) attached hereto shall
have been transferred, by conveyance of title to such real property or equity
ownership of any Person which owns such real property, to the Company;

            (h) The Company shall have published notice of an ordinary
shareholders meeting to replace and elect new members for the Board of Directors
of the Company to be held as soon as practicable following the Expiration Date;

            (i) The uniform supply agreement dated March 30, 2000 between
Uniform Design, S.A. de C.V. and the Company shall have been amended in a manner
acceptable to Bidder in its sole discretion or such agreement shall have been
terminated without payment of any penalty, liquidated damage or termination
charge;

            (j) The Affiliates of Molina described in Exhibit E attached to the
Molina Agreement to Tender shall have released, discharged and forever
quitclaimed the Company and its Affiliates from any and all claims, liabilities
or obligations, of any kind or nature whatsoever in law or in equity, known or
unknown, that they ever had, now have, or may have in the future against the
Company or its Affiliates for, upon or by reason of any matter, cause or thing
whatsoever from the beginning of time, other than the obligations described in
such Exhibit E; and

            (k) Guadalupe Basteris shall have executed, before a notary public
in Mexico, a consent in the form attached as Exhibit C to the Molina Agreement
to Tender.

            Section 2.3 CONDITIONS TO THE OFFERS. The Offers documents shall
contain those conditions identified on Exhibit B hereto as conditions to
Bidder's obligation to consummate the Offers (the "Offer Conditions"). The
obligation of Bidder to consummate the Offers and accept for payment, and pay
for, Securities tendered and not withdrawn shall be subject only to the Offer
Conditions. Bidder reserves the right to waive any such conditions.

            Section 2.4 MODIFICATIONS AND EXTENSIONS OF THE OFFERS.

            (a) Bidder may, subject to compliance with the Exchange Act and the
Mexican Securities Markets Law, modify the terms of the Offers or waive any
Offer Conditions, except that without the express written consent of PepsiCo
(which shall not be unreasonably withheld),


                                       6

Bidder shall not reduce the number of Securities sought in the Offers, reduce
the Offer Price (except as permitted by Section 2.1), extend the Offers (except
as provided in this Section 2.4), change the form of consideration payable in
the Offers or otherwise amend or modify any material term of the Offers in any
manner materially adverse to PepsiCo.

            (b) If on the initial Expiration Date the Offer Conditions have been
satisfied, Bidder reserves the right, in its sole discretion, to extend the
Offers to a date that is not later than five (5) Business Days after the initial
Expiration Date, solely to increase the number of Securities tendered in the
Offers.

            (c) If on the initial Expiration Date the Offer Conditions have not
been satisfied or waived, Bidder shall extend the Offers until all the Offer
Conditions have been satisfied or waived, provided that Bidder shall not be
required to extend the Offers to a date that is later than ten (10) Business
Days after the initial Expiration Date. Bidder shall have the right, at its own
election, to further extend the Offers for additional ten (10) Business Days to
a date up to twenty (20) Business Days after the initial Expiration Date.

                                  ARTICLE III

                        RIGHTS AND OBLIGATIONS OF PEPSICO

            Section 3.1 AGREEMENT TO TENDER. PepsiCo agrees, pursuant to the
terms and conditions set forth herein, to tender (and to cause the other PepsiCo
Shareholders to tender) in the Offers and to not withdraw (except as permitted
in Section 3.2) all the Owned Securities and all other Securities directly or
indirectly owned by PepsiCo no later than the third Business Day after the
commencement of the Offers, except for Owned Securities in the Molina/PepsiCo
Gemex Shares Trust and Securities acquired by PepsiCo after the date of this
Agreement, which in each case PepsiCo agrees to tender and to cause to be
tendered not less than two (2) Business Days before the initial Expiration Date.
The securities described in the preceding sentence are collectively defined as
the "PepsiCo Securities." PepsiCo further agrees to elect (and to cause the
other PepsiCo Shareholders to elect) to receive the purchase price for the
PepsiCo Securities they tender in the Offers in Pesos.

            Section 3.2 RIGHT TO RECEIVE MORE COMPETITIVE OFFERS. Nothing in
this Agreement is intended in any way to restrict the PepsiCo Shareholders'
ability to accept more competitive offers and no penalty will be imposed on any
PepsiCo Shareholder that accepts a more competitive offer. Notwithstanding the
provisions of Section 3.1, each of the PepsiCo Shareholders shall have the right
to accept more competitive offers received any time prior to or during the
period that the Mexican Offer and/or the U.S. Offer remain outstanding. In the
event any of the PepsiCo Shareholders has tendered any or all of its Securities,
it shall have the right to withdraw any or all of such Securities at any time
during the period that the Mexican Offer and/or the U.S. Offer remain
outstanding in order to accept more competitive offers.

            Section 3.3 ALTERNATIVE TRANSACTIONS. PepsiCo agrees to advise
Bidder orally and in writing of any proposal or request for information it
receives, or becomes aware of, in connection with or relating to an Alternative
Transaction (as defined below), the material terms and conditions of such
request, proposal or Alternative Transaction and the


                                       7

identity of the Person making such request or proposal within one (1) U.S.
Business Day of the receipt of such request, and shall within such period
deliver to Bidder a copy of any such request, proposal or Alternative
Transaction received from such Person in writing. PepsiCo will keep Bidder
informed of the status and details (including amendments or proposed amendments)
of any such request or proposal on a current basis. For purposes of this
Agreement, "Alternative Transaction" means either (i) a transaction or series of
transactions pursuant to which any Person or group of Persons (including PepsiCo
and its Affiliates and excluding any transfers between the Persons Controlling,
under common Control with, or Controlled by PepsiCo) other than the Company, any
of its wholly-owned Subsidiaries, Bidder and any of Bidder's Subsidiaries (a
"Third Party") acquires or would acquire, directly or indirectly, beneficial
ownership (as defined in Rule l3d-3 under the Exchange Act) of any or all of the
Securities, whether from PepsiCo, the Company or otherwise; or (ii) any other
transaction pursuant to which any Third Party acquires or would acquire,
directly or indirectly, assets of the Company (other than in the ordinary course
of business) or control of assets of the Company or its Subsidiaries, in any
case having a book value of ten percent or more of the Company's total
consolidated assets, or for consideration equal to ten percent or more of the
fair market value of all Securities on the date of this Agreement. Nothing in
this Section 3.3 shall be interpreted to prohibit PepsiCo or any of its
officers, directors or employees from complying with their fiduciary duties to
the Company or require them to breach any confidentiality obligations to which
they may be subject under applicable law.

            Section 3.4 INFORMATION.

            (a) PepsiCo agrees to advise and to cause each of its Affiliates or
employees to advise Bidder, within one (1) U.S. Business Day, orally and in
writing of any request for information or comments from any governmental agency
which could impact Bidder's ability to consummate the Offers. PepsiCo agrees to
provide Bidder with the opportunity to review and comment on any of PepsiCo's
filings with or correspondence to the Securities Authorities relating to the
Offers or this Agreement and Bidder will have the right to comment on those
filings or correspondence no later than 24 hours after receipt of such filing or
correspondence. PepsiCo shall not be under any obligation to accept or in any
manner address such comments. Bidder shall have the right to approve (such
approval not to be unreasonably withheld) any references to it contained in such
filing or correspondence, provided that any failure to provide specific proposed
changes within 24 hours of receipt of such filing or correspondence shall be
deemed to be approval.

            (b) Bidder agrees to advise PepsiCo, within one (1) U.S. Business
Day, orally and in writing of any request for information or comments from any
governmental agency which could impact Bidder's ability to consummate the
Offers. Bidder agrees to provide PepsiCo with the opportunity to review and
comment on any of Bidder's filings with or correspondence to the Securities
Authorities relating to the Offers or this Agreement and PepsiCo will have the
right to comment on those filings or correspondence no later than 24 hours after
receipt of such filing or correspondence. Bidder shall not be under any
obligation to accept or in any manner address such comments. PepsiCo shall have
the right to approve (such approval not to be unreasonably withheld) any
references to it contained in any such filing or correspondence, provided that
any failure of PepsiCo to provide to Bidder specific proposed changes in writing
within 24 hours of receipt of such filing or correspondence shall be deemed to
be approval.

                                       8

            (c) Each of PepsiCo and Bidder will make reasonable efforts to
include each other in any oral communications they have with the Securities
Authorities relating to the Offers or this Agreement.

            Section 3.5 PAYMENT TO BIDDER. As it is strategically important that
PBG Hispano, a subsidiary of The Pepsi Bottling Group, Inc., one of PepsiCo's
anchor bottlers, purchase the Company, PepsiCo has agreed to pay Ps. 172,708,000
to PBG Hispano in order to facilitate such purchase and ensure a smooth
ownership transition of the Company. Such payment shall be made before the
completion of the Offers.

                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF PEPSICO

            PepsiCo hereby represents and warrants to Bidder as follows:

            Section 4.1 ORGANIZATION AND QUALIFICATION. PepsiCo is a corporation
duly organized, validly existing and in good standing under the laws of the
State of North Carolina with full corporate power and authority to own, lease
and operate its assets and to carry on its business as now being and as
heretofore conducted.

            Section 4.2 AUTHORITY. PepsiCo has all requisite power and authority
to enter into, execute and deliver this Agreement, to perform fully its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement has been duly
authorized by PepsiCo. This Agreement has been duly executed and delivered by
PepsiCo and constitutes the valid and binding obligation of PepsiCo, enforceable
against PepsiCo in accordance with its terms.

            Section 4.3 NO CONFLICT. Neither the execution, delivery or
performance of this Agreement nor the consummation by PepsiCo of the
transactions contemplated hereby, subject to compliance with filing and other
requirements under applicable law, will, directly or indirectly (with or without
notice or lapse of time): (i) contravene, conflict with, or result in a
violation of any federal, state, local, municipal, foreign, international,
multinational or other administrative order, constitution, Law, ordinance,
principle of common or civil law, regulation, statute or treaty ("Legal
Requirements") applicable to it or the Molina/PepsiCo Gemex Shares Trust, or any
award, decision, injunction, judgment, order, ruling, subpoena or verdict
entered, made or rendered by any court, administrative agency or other
governmental authority or by any arbitrator ("Orders") applicable to it or the
Molina/PepsiCo Gemex Shares Trust; or (ii) contravene, conflict with, or result
in a violation or breach of any provision of, or give any person the right to
declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify any agreement, contract,
obligation, promise or understanding (whether written or oral and whether
express or implied) applicable to PepsiCo, any of its Affiliates or the
Molina/PepsiCo Gemex Shares Trust, or by which any of PepsiCo's or its
Affiliates' properties or other assets (including the PepsiCo Securities) are
legally bound, except in each case, for any contravention, conflict, violation,
breach or right which would not materially impair the ability of PepsiCo to
perform PepsiCo's obligations hereunder. No governmental authority has
commenced, or threatened in writing to commence, any proceeding


                                       9

or action against PepsiCo or the Molina/PepsiCo Gemex Shares Trust with respect
to the Offers, this Agreement or the transactions contemplated hereby and no
other Person has commenced any action, proceeding, application or claim against
PepsiCo or the Molina/PepsiCo Gemex Shares Trust with respect to the Offers,
this Agreement or the transactions contemplated hereby, before any court,
governmental, regulatory or administrative agency or commission, authority or
tribunal, domestic, foreign or supranational, in each case, which would
materially impair PepsiCo's ability to perform its obligations under this
Agreement.

            Section 4.4 TITLE TO THE PEPSICO SECURITIES. As of the date hereof,
PepsiCo is the indirect beneficial owner of the Owned Securities set forth on
Schedule 4.4 attached hereto. The holder of record of such Securities as of the
date hereof is identified on Schedule 4.4. The PepsiCo Securities have been duly
issued, are fully paid and, except for the Securities in the Molina/PepsiCo
Gemex Shares Trust, (i) the PepsiCo Securities are free and clear of any lien,
claim, charge, restriction on transfer, other encumbrance or rights of third
parties and (ii) there are no shareholder agreements, voting trusts, proxies or
other agreements or understandings with respect to the PepsiCo Securities or the
share capital of the Company which will prohibit, restrict or adversely affect
the performance of PepsiCo's obligations under this Agreement. Upon the purchase
of the PepsiCo Securities pursuant to the Offers, Bidder will own the PepsiCo
Securities free and clear of any lien, claim, charge, restriction on transfer,
other encumbrance or rights of third parties.

                                   ARTICLE V

                    REPRESENTATIONS AND WARRANTIES OF BIDDER

            PBG Hispano and BG represent and warrant to PepsiCo, jointly and
severally, as follows:

            Section 5.1 ORGANIZATION AND QUALIFICATION.

            (a) PBG Hispano is a Spanish limited liability company duly
organized, validly existing and in good standing under the laws of Spain with
full limited liability company power and authority to own, lease and operate its
assets and to carry on its business as now being and as heretofore conducted.

            (b) BG is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware with full
limited liability company power and authority to own, lease and operate its
assets and to carry on its business as now being and as heretofore conducted.

            Section 5.2 AUTHORITY. Each Bidder has all requisite power and
authority to enter into, execute and deliver this Agreement, to perform fully
its obligations hereunder and to consummate the Offers and the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
has been duly authorized by each of PBG Hispano and BG. This Agreement has been
duly executed and delivered by each Bidder and constitutes the valid and binding
obligation of each Bidder, enforceable against each Bidder in accordance with
its terms.

                                       10


            Section 5.3 NO CONFLICT. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transactions
contemplated hereby, including the commencement of the Offers, except as
provided in Schedule 5.3, will, directly or indirectly (with or without notice
or lapse of time): (i) require Bidder to obtain any regulatory approval, action,
waiver or consent; (ii) contravene, conflict with, or result in a violation of,
or give any governmental authority or other person the right to challenge any of
the transactions contemplated by this Agreement or to exercise any remedy or
obtain any relief under, any Legal Requirements or any Orders; or (iii)
contravene, conflict with, or result in a violation or breach of any provision
of, or give any person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify any agreement, contract, obligation, promise or understanding (whether
written or oral and whether express or implied) applicable to each Bidder or any
of their Subsidiaries or by which any of their properties or other assets are
legally bound. No governmental authority has commenced, or threatened in writing
to commence, any proceeding or action against Bidder or its Affiliates with
respect to the Offers, this Agreement or the transactions contemplated hereby
and no other Person has commenced any action, proceeding, application or claim
against Bidder or its Affiliates with respect to the Offers, this Agreement or
the transactions contemplated hereby, before any court, governmental, regulatory
or administrative agency or commission, authority or tribunal, domestic, foreign
or supranational, in each case, which would materially impair Bidder's ability
to perform its obligations under this Agreement.

                                   ARTICLE VI

                                   TERMINATION

            Section 6.1 TERMINATION. This Agreement may be terminated at any
time:

            (a) by mutual written consent of PepsiCo and Bidder;

            (b) by PepsiCo, if Bidder has not commenced the Offers the first
Business Day following the execution of this Agreement, unless Bidder has not
commenced the Offers within the above time-period as a result of a breach by
PepsiCo of any of its material obligations or agreements under this Agreement;

            (c) by Bidder, by giving written notice of such termination to
PepsiCo, if PepsiCo shall have breached any of its material representations,
warranties, covenants or agreements under this Agreement, and such breach shall
be incapable of cure or has not been cured within ten (10) Business Days
following the giving of written notice of such breach to PepsiCo;

            (d) by either PepsiCo or Bidder, by giving written notice of such
termination to the other party, if there shall be in effect any Law that
prohibits the consummation of the Offers or any transactions contemplated hereby
or if consummation of the Offers or any the transactions contemplated hereby
would violate any non-appealable final order, decree or judgment of any court or
governmental entity having competent jurisdiction;

            (e) by PepsiCo, by giving written notice of such termination to
Bidder, if Bidder shall have breached any of its material representations,
warranties, covenants or agreements


                                       11



under this Agreement and such breach shall be incapable of cure or has not been
cured within ten (10) Business Days following the giving of written notice of
such breach to Bidder;

            (f) by PepsiCo or Bidder, if the Offers expire or terminate in
accordance with their terms without the purchase of Securities in the Offers; or

            (g) by Bidder, following the purchase of the PepsiCo Securities
pursuant to the Offers.

            Section 6.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement in accordance with Section 6.1 hereof, this Agreement shall
thereafter become void and have no effect, and neither party shall have any
liability to the other or its respective Affiliates, directors, officers or
employees, provided that nothing herein will relieve any party from liability
for any breach prior to such termination of any of its representations,
warranties or covenants under this Agreement.

                                  ARTICLE VII

                                  MISCELLANEOUS

            Section 7.1 CONFIDENTIALITY. Bidder and PepsiCo will maintain in
confidence, and will cause their respective Subsidiaries, Affiliates, directors,
officers, employees, advisors, agents and representatives to maintain in
confidence, any written, oral or other information obtained in confidence from
the other party in connection with this Agreement or the transactions
contemplated hereby (including any proposed offers by Bidder to acquire capital
stock of the Company), unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the transactions
contemplated by this Agreement or (c) the furnishing or use of such information
is required by legal proceedings or applicable law. Whether or not the
transactions contemplated by this Agreement are consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.

            Section 7.2 FURTHER ASSURANCES. The parties each agree (a) to
furnish upon request to each other such further information, (b) to execute and
deliver to each other such other documents and (c) to do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement.

            Section 7.3 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.

            Section 7.4 FORUM. This Agreement shall be subject to the exclusive
jurisdiction of the Federal Courts for the Southern District of New York and
State courts of New York County in the State of New York. The parties
irrevocably waive, to the fullest extent permitted by law, any objection or
immunities to jurisdiction which they may now or hereafter have (including
sovereign immunity, immunity to pre-judgment attachment, post-judgment


                                       12

attachment and execution) to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, or any judgment entered by any court in respect hereof
brought in the State of New York, and further irrevocably waive any claim that
any suit, action or proceeding in the Borough of Manhattan, New York has been
brought in an inconvenient forum.

            Section 7.5 REMEDIES CUMULATIVE. The rights and remedies of the
parties to this Agreement are cumulative and not alternative. Neither any
failure nor any delay by either party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. Except as
provided in Section 7.16, nothing in this Agreement shall convey any rights upon
any person or entity which is not a party to this Agreement.

            Section 7.6 ENTIRE AGREEMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof. This Agreement supersedes all prior agreements and
understandings, written or oral, between the parties with respect to such
subject matter.

            Section 7.7 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.

            Section 7.8 AMENDMENT. This Agreement may not be amended except by a
written instrument signed by each party hereto.

            Section 7.9 WAIVER. At any time any party hereto may (a) extend the
time for the performance of any of the obligations or other acts of any other
party hereto or (b) waive compliance with any of the agreements of any other
party or any conditions to its own obligations, in each case, only to the extent
such obligations, agreements and conditions are intended for its benefit;
PROVIDED, HOWEVER, that any such extension or waiver is set forth in a writing
executed by such party.

            Section 7.10 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement and either party's rights or
obligations hereunder may not be assigned or delegated, without the prior
written consent of the other party hereto, except that Bidder may assign in
whole or in part, the right (but not the Bidder's obligation) to purchase the
Securities to one or more of its Affiliates.

            Section 7.11 EXPENSES. Whether or not the purchase and sale of the
Securities is consummated, each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement and consummation of the transactions contemplated hereby.

                                       13

            Section 7.12 COUNTERPARTS; HEADINGS. This Agreement may be executed
in two counterparts, each of which shall be an original, but which together
shall constitute one and the same instrument. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.

            Section 7.13 NOTICES. Any and all notices or other communications or
deliveries required or permitted to be given under any of the provisions of this
Agreement shall be in writing and shall be deemed to have been duly given (i)
five days after the mailing thereof by registered mail, return receipt
requested, (ii) on the day following mailing when sent by overnight express mail
or courier, signature required, and (iii) at the actual time of receipt when
delivered personally, addressed to PepsiCo or Bidder at the addresses set forth
below (or at such other address as any party may specify by notice to the other
parties hereto given as aforesaid):

            If to PepsiCo, to:

            PepsiCo, Inc.
            700 Anderson Hill Road
            Purchase, New York 10577

            Attn:     Vice President & General Counsel, Pepsi-Cola
            Phone:  (914)253-2610
            Fax:      (914)249-8339


            If to Bidder, to:

            c/o The Pepsi Bottling Group, Inc.
            1 Pepsi Way
            Somers, NY 10589
            Attn:    Senior Deputy General Counsel
            Phone: (914) 767-7971
            Fax:     (914) 767-7944

            With a copy to:

            Proskauer Rose LLP
            1585 Broadway
            New York, NY 10036

            Attn:  Carlos E. Martinez, Esq.
            Phone:212-969-3000
            Fax:212-969-2900


            Section 7.14 SPECIFIC PERFORMANCE. Without limiting the rights of
each party hereto to pursue other legal and equitable rights available to such
party for any other party's failure to perform its obligations under this
Agreement, the parties hereto acknowledge and agree


                                       14

that the remedy at law for any failure to perform their obligations hereunder
would be inadequate and that each of them shall be entitled to specific
performance, injunctive relief or other equitable remedies in the event of any
such failure. To the extent any party may be entitled to the benefit of any
provision of law requiring any party in any suit, action or proceeding arising
out of or in connection with this Agreement or any of the transactions
contemplated hereby to post security for litigation costs or otherwise post a
performance bond or guaranty or to take any similar action, each party hereby
irrevocably waives such benefit in each case to the fullest extent now or
hereafter permitted under the laws of any such other jurisdiction.

            Section 7.15 THIRD PARTY BENEFICIARIES. The parties hereto expressly
agree that Molina is a third party beneficiary of this Agreement.

            Section 7.16 MONTERREY REAL PROPERTY. PepsiCo agrees that it will
permit the Company to continue its current use of certain real property (the
"Property") (namely, the Lot No. 26, block No. 26 and the facilities constructed
thereon located at Parque Industrial Monterrey, Carretera a Miguel Aleman,
Apodac, Nuevo Leon) on a rent-free basis for up to five years following the
purchase of the Securities. At any time during that period, the Company may
elect to have PepsiCo transfer the Property to the Company at its book value. At
the end of the five year period, if the Company has not elected to have PepsiCo
transfer the property to the Company, PepsiCo shall have the right to do so, at
book value, on its own initiative. In any event, the Company shall be required
to reimburse PepsiCo for any and all costs of ownership, maintenance, repair and
remediation and shall bear all costs and taxes associated with any transfer.

                                       15

            IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.

                                   PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO, S.L.


                                   By: /s/ Inigo Madariaga
                                       -------------------
                                   Name: Inigo Madariaga
                                   Title: Managing Director

                                   BOTTLING GROUP, LLC


                                   By: /s/ Alfred H. Drewes
                                       -------------------
                                   Name: Alfred H. Drewes
                                   Title: Principal Financial Officer


                                   PEPSICO, INC.


                                   By: /s/ Matthew M. McKenna
                                       ----------------------
                                   Name: Matthew M. McKenna
                                   Title: Senior Vice President of Finance


                                       16


                      EXHIBIT A TO THE AGREEMENT TO TENDER

                     FORM OF THE MOLINA AGREEMENT TO TENDER

                              (See Exhibit (d)(2))

                      EXHIBIT B TO THE AGREEMENT TO TENDER

                CONDITIONS OF THE CONSUMMATION OF BIDDER'S OFFERS



            Bidder will not be required to consummate the Offers if:

            (i) less than 90% of all of the outstanding shares of capital stock
of the Company (including shares represented by CPOs and GDSs) on the Expiration
Date are tendered into the Offers on or prior to the Expiration Date and not
withdrawn,

            (ii) less than all of the PepsiCo Securities owned by PepsiCo and
the other PepsiCo Shareholders are tendered into the Offers and not withdrawn,

            (iii) less than all of the Securities owned by Molina and the other
Molina Shareholders are tendered into the Offers and not withdrawn,

            (iv) the conditions to the [Mexican Offer] [U.S. Offer] have not
been satisfied or waived on or before the Expiration Date of the [Mexican Offer]
[U.S. Offer] or the [Mexican Offer] [U.S. Offer] has been terminated without the
purchase of any Securities, or

            (v) at any time before the acceptance of the Securities for payment,
any of the following events occurs:

         1.       a material breach by Molina of any of the material provisions
                  of the Molina Agreement to Tender, including, without
                  limitation, a breach by Molina of the representations and
                  warranties in Sections 5.4 and 5.5 thereof;

         2.       a material breach by PepsiCo of any of the material provisions
                  of this Agreement;

         3.       any regulatory approval, action, waiver or consent required to
                  consummate the Offers, including any approval of the CNBV, the
                  SEC or any securities exchange, (a) shall not have been
                  obtained, or shall have been obtained under conditions or
                  restrictions that would adversely affect the Mexican Offer,
                  the U.S. Offer or the Company or its Subsidiaries; (b) shall
                  have been modified in any material way that would adversely
                  affect the Mexican Offer, the U.S. Offer or the Company or (c)
                  has been revoked;

         4.       (a) there shall be pending any action, suit, proceeding or
                  claim by any person, domestic or foreign, which has a
                  reasonable likelihood of success, or by any government,
                  governmental authority or other regulatory or administrative
                  agency or commission, domestic, foreign or supranational,
                  before any court, governmental, regulatory or administrative
                  agency or commission, authority or tribunal, domestic, foreign
                  or supranational, or there shall be any statute, rule,
                  regulation, order, judgment, decree or injunction applicable
                  to the Mexican Offer or the U.S. Offer, by such governmental
                  or administrative bodies, prohibiting, materially restricting
                  or

                  substantially delaying, or seeking to prohibit, materially
                  restrict or substantially delay the consummation of the
                  Mexican Offer or the U.S. Offer, or materially modifying or
                  affecting the Mexican Offer or the U.S. Offer, or (b) any
                  change, event, condition or development which has had or would
                  reasonably be expected to result in a Material Adverse Change;

         5.       any filings of the Company with the SEC, the CNBV or any
                  securities exchange shall have contained, at the time of their
                  respective filings, untrue statements of material facts or
                  omitted to state material facts necessary to make the
                  statements made therein, in light of the circumstances in
                  which they were made, not misleading, and such untrue
                  statements or omissions would reasonably be expected to cause
                  a Material Adverse Change;

         6.       any material adverse change in the financial markets,
                  including without limitation, (a) any general suspension of
                  trading in any of the Securities on the NYSE or the Mexican
                  Stock Exchange (except for daily suspensions in accordance
                  with their respective rules or policies), (b) a declaration of
                  a banking moratorium or imposition of limitations on the
                  extension of credit generally in the United States or any
                  adverse change in exchange controls in the U.S. or Mexico, or
                  (c) any material limitations on the markets for currency in
                  Mexico;

         7.       commencement of a war, armed hostilities, military coup
                  d'etat, acts of terrorism, collapse of the government or other
                  national or international crisis in each case involving the
                  United States or Mexico which would reasonably be expected to
                  result in a Material Adverse Change;

         8.       the Company or any of its Subsidiaries shall have, at any time
                  after June 30, 2002, effected any change to their respective
                  capital structure which would reasonably be expected to result
                  in a Material Adverse Change, including, without limitation,
                  (a) issued, sold or otherwise transferred, or proposed to do
                  any of the foregoing, to any person, any shares of capital
                  stock or other securities (including options to purchase
                  shares of capital stock and any debt securities), (b)
                  declared, paid or proposed to declare or pay any dividend or
                  distribution on the Securities, (c) altered, or proposed to
                  alter, any material term of any outstanding security of the
                  Company or any of its Subsidiaries other than employee stock
                  options consistent with the provisions of this Agreement, (d)
                  split, combined or otherwise changed, or authorized or
                  proposed the split, combination or other change of, the
                  Securities or the Company's or any of its Subsidiaries'
                  capitalization, and (e) authorized, recommended, proposed or
                  entered into any merger, consolidation, liquidation,
                  dissolution, business combination, joint venture, strategic
                  alliance or similar arrangement involving any material assets,
                  acquisition or disposition of a material amount of assets or
                  securities, other than pursuant to the Offers;

         9.       the Company or any of its Subsidiaries shall have at any time
                  after June 30, 2002 operated its business otherwise than in
                  the ordinary course consistent with past practice, including,
                  without limitation, (a) entered into or invested in a line of
                  business different from those in which the Company or any of
                  its Subsidiaries was


                  engaged as of June 30, 2002, (b) effected any material change
                  to its corporate structure, including, without limitation, the
                  transfer or division of all or a significant portion of its
                  assets, (c) disposed of, or created liens on, other than
                  pursuant to credit facilities existing as of June 30, 2002,
                  any material assets of the Company or any of its Subsidiaries,
                  (d) voluntarily or involuntarily terminated or modified, in
                  any material adverse manner, any material agreements, (g) made
                  a material change in its accounting practices (other than as
                  required by U.S. or Mexican GAAP) or regulatory compliance
                  procedures, (e) waived, released, assigned, settled or
                  compromised any claims or litigation involving amounts or
                  other rights or assets in excess of $2,000,000, or (f) amended
                  or authorized or proposed any amendments to the Company's
                  Bylaws or any other organizational documents;

         10.      the Company and its Subsidiaries have Consolidated Adjusted
                  Net Debt in excess of Ps.2,648,353,587 or the Company and
                  its Subsidiaries do not have Consolidated Adjusted Working
                  Capital of at least Ps.190,750,000; and

         11.      any default by the Company or any of its Subsidiaries under
                  any indebtedness which would reasonably be expected to result
                  in a Material Adverse Change, or which would, following the
                  purchase of Securities in the Offers, result in a
                  cross-default under any indebtedness of PBG or BG.

                      SCHEDULE 5.3 TO AGREEMENT TO TENDER

          REGULATORY APPROVALS REQUIRED FOR THE EXECUTION, DELIVERY OR
            PERFORMANCE OF THIS AGREEMENT OR THE CONSUMMATION OF THE
                  TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT

ACTIONS AND APPROVALS BY:

     1. THE SEC;
     2. THE COMISION NACIONAL BANCARIA Y DE VALORES OF MEXICO;
     3. THE MEXICAN STOCK EXCHANGE; AND
     4. THE MEXICAN FEDERAL COMPETITION COMMISSION.

EX-99.D.2

                                                                  Exhibit (d)(2)

                               AGREEMENT TO TENDER


         AGREEMENT TO TENDER (this "Agreement"), dated as of October 4, 2002,
among PBG Grupo Embotellador Hispano-Mexicano S.L., a Spanish limited liability
company ("PBG Hispano"), Bottling Group, LLC, a Delaware limited liability
company ("BG" and together with PBG Hispano, the "Bidder") and Enrique C. Molina
Sobrino ("Molina").

                              W I T N E S S E T H


         WHEREAS, Bidder is interested in acquiring for cash all of the issued
and outstanding series B shares, without par value (the "Shares"), certificates
of participation, ("CPOs") and Global Depositary Shares ("GDSs"), together, in
each case, with any coupon representing unpaid dividends as of the day of
commencement of the Offers (as defined below), of Pepsi-Gemex, S.A. de C.V. (the
"Company"), a corporation organized under the laws of Mexico, pursuant to one or
more concurrent tender offers in Mexico and the United States (each an "Offer"
and collectively, the "Offers");

         WHEREAS, as of the date hereof Molina and the Molina Shareholders (as
defined below) own, directly or indirectly, 73,750 GDSs, 200,438,030 CPOs and
331,000 Shares, representing approximately 40.0% of the total capital stock of
the Company, which CPO amount and ownership percentage shall be increased by the
number of CPOs which Molina purchases upon the exercise of any of his vested
options, as provided herein (collectively, the "Owned Securities");

         WHEREAS, in order to induce Bidder to commence the Offers, Bidder has
requested and Molina has agreed to enter into this Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the premises and
the mutual representations, warranties, covenants and agreements contained
herein, and on the terms and subject to the conditions set forth herein, and
intending to be legally bound the parties agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth or referred to below:

         "Affiliate" of a specified Person means any entity which such Person
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with the specified Person or, in the
case of individuals, persons related by blood or marriage including former
marriage. For purposes of this Agreement, neither the Company nor any of its
Subsidiaries shall be considered to be an Affiliate of Molina or the
Molina/PepsiCo

Gemex Shares Trust. The Molina/PepsiCo Gemex Shares Trust (as defined below)
shall not be considered an Affiliate of PepsiCo.

         "Alternative Transaction" has the meaning set forth in Section 3.3(a).

         "Area" has the meaning set forth in Section 3.3(b)(i).

         "Business" has the meaning set forth in Section 3.3(c)(i).

         "Business Day" means a day that is a "business day" as defined under
Regulation 14D under the Exchange Act and that is not a legal holiday in Mexico.

         "CNBV" means the Comision Nacional Bancaria y de Valores of Mexico.

         "Competitive Activities" has the meaning set forth in Section
3.3(b)(i).

         "Confidential Information" has the meaning set forth in Section 3.3(d).

         "Consolidated Adjusted Net Debt" as of any date shall mean all
short-term and long-term indebtedness, including obligations under capital
leases, but not including accrued interest, of the Company and its Subsidiaries
on a consolidated basis as of such date, reduced by the sum of (i) the
consolidated cash and cash equivalents of the Company and its Subsidiaries as of
such date, (ii) an amount equal to Ps.172,708,000 and (iii) the aggregate amount
not yet received as cash as of such date by the Company from the employees of
the Company and/or its Subsidiaries representing the aggregate unpaid strike
price of their vested options to acquire securities of the Company (assuming all
of such vested options whether exercised or not are included in calculating the
Offer Price). For purposes of this calculation, all dollar denominated
indebtedness of the Company and its Subsidiaries shall be converted to Pesos
calculated at the average of the exchange rates reported on each of the five (5)
consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the
commencement of the Offers by Reuters and Bloomberg on their FXBENCH page as the
closing rate for the exchange of Pesos and dollars.

         "Consolidated Adjusted Working Capital" as of any date shall mean (A)
the consolidated current assets of the Company and its Subsidiaries as of such
date, other than the consolidated cash and cash equivalents of the Company and
its Subsidiaries used to compute Consolidated Adjusted Net Debt (as described
above) as of such date, less (B) the consolidated current liabilities of the
Company and its Subsidiaries as of such date, other than (i) the principal
amount of short-term indebtedness and the principal amount of the current
portion of long-term indebtedness as of such date and (ii) dividends payable as
of such date.

         "Control" (including, with correlative meaning, the terms
"Controlling," "Controlled by" and "under common Control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.


                                        2

         "CPO" means an ordinary certificate of participation of the Company,
issued by Banco Nacional de Mexico, S.A. as trustee, which represents one series
B share, one series D share and one series L share, each without par value, of
the Company.

         "Escrow Agent" means The Bank of New York, as escrow agent under the
Escrow Agreement.

         "Escrow Agreement" shall mean the escrow agreement entered concurrently
herewith among Bidder, Molina and the Escrow Agent, substantially in the form
attached hereto as Exhibit A.

         "Escrow Amount" has the meaning set forth in Section 4.1.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Expiration Date" means the date that the Mexican Offer and/or the U.S.
Offer, as the case may be, expires.

         "GDS" or "Global Depository Shares" means each Global Depositary Share
issued pursuant to the Amended and Restated Deposit Agreement dated as of
September 15, 1998 between the Company and The Bank of New York, as Depositary,
each of which in turn represents six CPOs.

         "Indemnified Parties" has the meaning set forth in Section 8.1(a).

         "Law" means any law, rule, regulation or order of any competent
governmental or regulatory authority, court or securities exchange, including
the Mexican Securities Markets Law, and any other regulations or rules or
applicable decrees issued thereunder, as amended from time to time.

         "Legal Requirements" has the meaning set forth in Section 5.2.

         "Material Adverse Change" shall mean any material adverse effect on the
financial condition, business, properties, franchises, licenses, assets,
liabilities or results of operation of the Company and its Subsidiaries, taken
as a whole.

         "Mexican Securities Markets Law" means the Mexican Ley del Mercado de
Valores.

         "Mexico" shall mean The United Mexican States.

         "Mexican Offer" means the portion of the Offers that will be conducted
in, and in accordance with the securities regulations of, Mexico through the
Bolsa Mexicana de Valores, S.A. de C.V.


                                        3

         "Molina/PepsiCo Gemex Shares Trust" shall mean the Delaware statutory
business trust formed by Molina, PepsiCo and other parties pursuant to a trust
agreement, dated October 6, 1995.

         "Molina Securities" has the meaning set forth in Section 3.1.

         "Molina Shareholders" are Molina and the other Persons listed on
Schedule 5.3.

         "Offer" has the meaning set forth in the recitals.

         "Offers" has the meaning set forth in the recitals.

         "Offer Conditions" has the meaning set forth in Section 2.3.

         "Offer Price" has the meaning set forth in Section 2.1.

         "Orders" has the meaning set forth in Section 5.2.

         "Owned Securities" has the meaning set forth in the recitals.

         "Pension Plan" has the meaning set forth in Section 3.6.

         "PepsiCo" shall mean PepsiCo, Inc.

         "PepsiCo Agreement to Tender" shall mean the agreement between Bidder
and PepsiCo (of which Molina is an express third-party beneficiary), dated as of
October 4, 2002, substantially in the form attached hereto as Exhibit B,
pursuant to which all of the Securities of the Company owned, directly or
indirectly, or which may be acquired on or before the Expiration Date, by
PepsiCo and the other PepsiCo Shareholders (as defined therein) are to be
tendered in the Offers.

         "Person" means any individual, corporation (including any non-profit
corporation), association, general or limited partnership, organization,
business, limited liability company, firm, governmental entity, joint venture,
estate, trust, unincorporated organization or any other entity, association or
organization.

         "Purchase Date" has the meaning set forth in Section 3.3(b).

         "SEC" means the United States Securities and Exchange Commission.

         "SEC Filings" means filings made by the Company with the SEC pursuant
to the periodic reporting requirements contained in Sections 13(a), 13(c) or
15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

         "Securities" shall mean collectively the Shares, CPOs and GDSs.


                                        4

         "Securities Authorities" shall mean all relevant federal, provincial
and state securities commissions and stock exchange authorities and similar
entities and authorities in the United States and Mexico, including the SEC and
the CNBV.

         "Shares" shall have the meaning set forth in the recitals.

         "Subsidiary" means any corporation or entity with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
(or equity securities) or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors (or similar Persons)
or any other corporation or entity which consolidates with such Person.

         "Tendering Shareholder" means any record or beneficial holder of
Securities who tenders Securities into the Offers.

         "Third Party" has the meaning set forth in Section 3.3(a).

         "Third Party Claim" has the meaning set forth in Section 8.1(b).

         "U.S. Business Day" means a day that is a "business day" as defined
under Regulation 14D under the Exchange Act.

         "U.S. Offer" means the portion of the Offers that will be conducted in,
and in accordance with the securities regulations of, the United States of
America.

         Section 1.2 OTHER DEFINITIONAL PROVISIONS.

         (a) The words "Hereof," "Herein," and "Hereunder" and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement.

         (b) Terms defined in the singular have a comparable meaning when used
in the plural, and vice versa.

         (c) The terms "dollars" and "$" mean United States dollars. The terms
"Ps." and "Pesos" mean Mexican Pesos.

                                   ARTICLE II

                                  TENDER OFFER

         Section 2.1 AGREEMENT TO COMMENCE OFFERS. Subject to the provisions of
Section 2.2, Bidder shall commence, on the first Business Day after the date of
this Agreement, Offers to acquire up to 100% of the Securities at a price equal
to (i) in the Mexican Offer and at the election of the offerees, Ps.5.91 per
Share (or Ps.17.73 per CPO) or the dollar equivalent of such Peso amount
calculated as the average of the exchange rates reported on each of the five (5)
consecutive U.S. Business Days ending two (2) U.S. Business Days prior to the


                                        5

Expiration Date of the U.S. Offer by Reuters and Bloomberg on their FXBENCH page
as the closing rate for the exchange of Pesos and dollars, and (ii) in the U.S.
Offer, the dollar equivalent of Ps.5.91 per Share (or Ps.106.38 per GDS and
Ps.17.73 per CPO), calculated in the same manner as described in (i), in cash
to each Tendering Shareholder. The Bidder may, in its sole discretion, increase
the per Security price for any reason or decrease it by the amount of all
dividends for which a payment day is announced or published on or before the
Expiration Date and which is payable at any time after the date hereof prior to
the Purchase Date. The price per Security, or any higher or lower amount per
Security as may be paid in the Offers in accordance with the foregoing, is
hereinafter referred to as the "Offer Price." If the Offers are consummated,
Bidder agrees to pay the Offer Price promptly, but in no event later than four
(4) U.S. Business Days after the Expiration Date.

         Section 2.2 CONDITIONS TO COMMENCEMENT OF THE OFFERS. Bidder's
obligation to commence the Offers is contingent upon the following conditions:

         (a) As of the date of this Agreement, (i) the Company shall have timely
filed all reports required to be filed by it since January 1, 1999 pursuant to
the Exchange Act and the Mexican Securities Markets Law, and each such report
shall have complied as to form in all material respects to the rules and
regulations promulgated under the Exchange Act or the Mexican Securities Markets
Law, as applicable and (ii) at the time of their respective filing (or, if
amended on or prior to five (5) Business Days prior to this Agreement and a copy
of any such amendment has been delivered to Bidder, at the time of the filing of
any such amendment thereof), the Company's SEC Filings as they may have been so
amended shall not have contained untrue statements of material facts or omitted
to state material facts required to be stated therein in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading;

         (b) No change, event or development shall have occurred which would
reasonably be expected to cause a Material Adverse Change;

         (c) All the representations and warranties of Molina under this
Agreement shall be true and correct in all material respects as of the date
Bidder commences the Offers;

         (d) The Company shall, as of the date of the commencement of the
Offers, directly or indirectly through any of its Subsidiaries, own all of the
capital stock of each of its Subsidiaries;

         (e) PepsiCo and Bidder shall have executed and delivered the PepsiCo
Agreement to Tender;

         (f) Molina, Bidder and the Escrow Agent shall have executed and
delivered the Escrow Agreement;

         (g) The properties listed on Schedule 2.2(g) attached hereto shall have
been transferred, by conveyance of title to such real property or equity
ownership of any Person which owns such real property, to the Company;


                                        6

         (h) The uniform supply agreement dated March 30, 2000 between Uniform
Design, S.A. de C.V. and the Company shall have been amended in a manner
acceptable to Bidder in its sole discretion or such agreement shall have been
terminated without payment of any penalty, liquidated damage or termination
charge;

         (i) The Affiliates of Molina described in Exhibit E attached hereto
shall have released, discharged and forever quitclaimed the Company and its
Affiliates from any and all claims, liabilities or obligations, of any kind or
nature whatsoever in law or in equity, known or unknown, that they ever had, now
have, or may have in the future against the Company or its Affiliates for, upon
or by reason of any matter, cause or thing whatsoever from the beginning of
time, other than the obligations described in Exhibit E;

         (j) Molina shall have entered into arrangements, reasonably
satisfactory to Bidder, for the delivery of the Escrow Amount to the Escrow
Agent from the aggregate Offer Price due to Molina and the other Molina
Shareholders for Securities tendered by the Molina Shareholders in the Offers;
and

         (k) Guadalupe Basteris shall have executed, before a notary public in
Mexico, a consent in the form attached hereto as Exhibit C.


         Section 2.3 CONDITIONS TO THE OFFERS. The Offers documents shall
contain those conditions identified on Exhibit D hereto as conditions to
Bidder's obligation to consummate the Offers (the "Offer Conditions"). The
obligation of Bidder to consummate the Offers and accept for payment, and pay
for, Securities tendered and not withdrawn shall be subject only to the Offer
Conditions. Bidder reserves the right to waive any such conditions.

         Section 2.4 MODIFICATIONS AND EXTENSIONS OF THE OFFERS.

         (a) Bidder may, subject to compliance with the Exchange Act and the
Mexican Securities Markets Law, modify the terms of the Offers or waive any
Offer Conditions, except that without the express written consent of Molina
(which shall not be unreasonably withheld), Bidder shall not reduce the number
of Securities sought in the Offers, reduce the Offer Price (except as permitted
by Section 2.1), extend the Offers (except as provided in this Section 2.4),
change the form of consideration payable in the Offers or otherwise amend or
modify any material term of the Offers in any manner materially adverse to
Molina.

         (b) If on the initial Expiration Date the Offer Conditions have been
satisfied, Bidder reserves the right, in its sole discretion, to extend the
Offers to a date that is not later than five (5) Business Days after the initial
Expiration Date, solely to increase the number of Securities tendered in the
Offers.

         (c) If on the initial Expiration Date the Offer Conditions have not
been satisfied or waived, Bidder shall extend the Offers until all the Offer
Conditions have been satisfied or waived, provided that Bidder shall not be
required to extend the Offers to a date that is later than ten (10) Business
Days after the initial Expiration Date. Bidder shall have the right, at its own
election, to further extend the Offers for additional ten (10) Business Days to
a date up to twenty (20) Business Days after the initial Expiration Date.

                                   ARTICLE III

                        RIGHTS AND OBLIGATIONS OF MOLINA


                                        7

         Section 3.1 AGREEMENT TO TENDER. In order to induce Bidder to commence
the Offers, Molina agrees, pursuant to the terms and conditions set forth
herein, to tender (and to cause the other Molina Shareholders to tender) in the
Offers and to not withdraw (except as permitted in Section 3.2) all the Owned
Securities and all other Securities directly or indirectly owned by Molina and
the other Molina Shareholders no later than the third Business Day after the
commencement of the Offers, except for Owned Securities in the Molina/PepsiCo
Gemex Shares Trust, Securities which have been pledged as described in Schedule
5.3 and Securities acquired by any of the Molina Shareholders after the date of
this Agreement, which in each case Molina agrees to tender and to cause to be
tendered not less than two (2) Business Days before the initial Expiration Date.
The securities described in the preceding sentence are collectively defined as
the "Molina Securities." Molina further agrees to elect (and to cause the other
Molina Shareholders to elect) to receive the purchase price for the Molina
Securities they tender in the Offers in dollars calculated at the Exchange Rate.

         Section 3.2 RIGHT TO RECEIVE MORE COMPETITIVE OFFERS. Nothing in this
Agreement is intended in any way to restrict the Molina Shareholders' ability to
accept more competitive offers and no penalty will be imposed on any Molina
Shareholder that accepts a more competitive offer. Notwithstanding the
provisions of Section 3.1, each of the Molina Shareholders shall have the right
to accept more competitive offers received any time prior to or during the
period that the Mexican Offer and/or the U.S. Offer remain outstanding. In the
event any of the Molina Shareholders has tendered any or all of its Securities,
such Molina Shareholder shall have the right to withdraw any or all of such
Securities at any time during the period that the Mexican Offer and/or the U.S.
Offer remain outstanding in order to accept more competitive offers.

         Section 3.3 ALTERNATIVE TRANSACTIONS; CONFIDENTIALITY; NO COMPETITION.

         (a) Molina agrees to advise Bidder orally and in writing of any
proposal or request for information he receives, or becomes aware of, in
connection with or relating to an Alternative Transaction (as defined below),
the material terms and conditions of such request, proposal or Alternative
Transaction and the identity of the Person making such request or proposal
within one (1) U.S. Business Day of the receipt of such request, and shall
within such period deliver to Bidder a copy of any such request, proposal or
Alternative Transaction received from such Person in writing. Molina will keep
Bidder informed of the status and details (including amendments or proposed
amendments) of any such request or proposal on a current basis. For purposes of
this Agreement, "Alternative Transaction" means either (i) a transaction or
series of transactions pursuant to which any Person or group of Persons
(including Molina and his Affiliates and excluding any transfers between the
Persons Controlling, under common Control with, or Controlled by Molina) other
than the Company, any of its wholly-owned Subsidiaries, Bidder and any of
Bidder's Subsidiaries (a "Third Party") acquires or would acquire, directly or
indirectly, beneficial ownership (as defined in Rule l3d-3 under the Exchange
Act) of any or all of the Securities, whether from Molina, the Company or
otherwise; or (ii) any other transaction pursuant to which any Third Party
acquires or would acquire, directly or indirectly, assets of the Company (other
than in the ordinary course of business) or control of assets of the Company or
its Subsidiaries, in any case having a book value of ten percent or more

                                        8

of the Company's total consolidated assets, or for consideration equal to ten
percent or more of the fair market value of all Securities on the date of this
Agreement. Nothing in this Section 3.3(a) shall be interpreted to prohibit
Molina from complying with his fiduciary duties to the Company or require him to
breach any confidentiality obligations to which he may be subject under
applicable law.

         (b) Molina undertakes and covenants to Bidder that, from the date of
the purchase of the Molina Securities by Bidder pursuant to the Offers (the
"Purchase Date"), in accordance with the terms of this Agreement, until the
fifth anniversary of the Purchase Date, he will not, for any reason whatsoever,
either individually or as an officer director, stockholder, member, partner,
agent, employee, consultant, principal, advisor, independent contractor,
affiliate or similarly interested party of another business firm, without the
prior written consent of Bidder, directly or indirectly:

         (i)      Own, lease, manage, operate, control, advise, engage in, or
                  own stock or otherwise own an equity or economic interest in,
                  any Person engaged in the manufacture, marketing or wholesale
                  sales or distribution of beverages which are competitive with
                  the products manufactured, marketed, sold or distributed by
                  the Company and its Subsidiaries as of the date hereof
                  ("Competitive Activities") in Mexico (the "Area"); provided
                  that, notwithstanding the foregoing, nothing in this Section
                  3.3(b)(i) will restrict or prevent in any manner Molina from
                  maintaining a purely passive investment in any Person whose
                  securities are listed on a national securities exchange or the
                  NASDAQ National Market System and who is engaged in any
                  Competitive Activities so long as the aggregate interest
                  represented by such investments does not exceed 4% of any
                  class of the outstanding debt or equity securities of any such
                  Person;

         (ii)     Divert or attempt to divert from the Company or its
                  Subsidiaries Persons who are customers or suppliers of the
                  Company and its Subsidiaries as of either the date hereof or
                  the Purchase Date; or

         (iii)    Use (A) in the Area, the name of the Company or any of its
                  Subsidiaries or any trade names, licenses, labels, customers'
                  lists, logos or trademarks previously or currently used or
                  owned by the Company or any of its Subsidiaries in connection
                  with the products of the Company or any of its Subsidiaries,
                  or any other logos or trademarks substantially similar to any
                  of the aforementioned logos or trademarks and (B) anywhere in
                  the world, any of the trade secrets of the Company or any of
                  its Subsidiaries related to prospective marketing, sales and
                  product packaging plans; provided, however, that this clause
                  (iii)(B) shall no longer be applicable after the first
                  anniversary of the Purchase Date.

         (c) Molina undertakes and covenants to Bidder that he will not, for any
reason whatsoever, either individually or as an officer, director, stockholder,
member, partner, agent,


                                        9

employee, consultant, principal, advisor, independent contractor, affiliate or
similarly interested party of another business firm, without the prior written
consent of Bidder, directly or indirectly:

         (i)      From the Purchase Date until the third anniversary of the
                  Purchase Date, solicit for employment, hire or do any act
                  intended to divert any of the employees listed in Schedule
                  3.3(c)(i) attached hereto from the business of the Company,
                  its Subsidiaries, Bidder or any Affiliates of any of them (the
                  "Business"); provided however, that Molina may hire Mr. Luis
                  Alejandro Bustos Olivares if Mr. Bustos employment is
                  terminated or constructively terminated by the Company; or

         (ii)     From the date hereof until the nine month anniversary of the
                  Purchase Date, disparage, demean, criticize or do any other
                  act in each case reasonably likely to cause material injury to
                  the Business or the reputation of the Business.

         (d) Molina acknowledges that he and certain of his Affiliates had
access to operating, financial and other information of the Company, its
Subsidiaries and their respective customers including, without limitation,
procedures, business strategies, and prospects and opportunities, techniques,
methods and information about, or received by them, from their customers and
that divulgence will irreparably harm the Company and its Subsidiaries
("Confidential Information"). Molina also acknowledges such Confidential
Information provides the Company and its Subsidiaries with a competitive
advantage (or that it could be used to the disadvantage of the Company or its
Subsidiaries by a competitor). Molina also acknowledges the interest of the
Company and its Subsidiaries in maintaining the confidentiality of such
Confidential Information. Molina shall not, and shall not authorize any Person
acting on his behalf to, divulge, disclose or make known in any way or use for
the individual benefit of any of them or others any of such Confidential
Information. The foregoing is not applicable to such of the Confidential
Information (i) that is in the public domain otherwise than as a result of its
unauthorized disclosure by Molina, his Affiliates or any other person; (ii) that
is necessary or appropriate to be disclosed in making any filing, or in
connection with obtaining any consent or approval, required for the consummation
of the transactions contemplated by this Agreement; or (iii) that is required to
be disclosed in connection with any legal proceedings or applicable law.

         Section 3.4 INFORMATION.

         (a) Molina agrees to advise and to cause each of his Affiliates or
employees to advise Bidder, within one (1) U.S. Business Day, orally and in
writing of any request for information or comments from any governmental agency
which could impact Bidder's ability to consummate the Offers. Molina agrees to
provide Bidder with the opportunity to review and comment on any of Molina's or
the Company's filings with or correspondence to the Securities Authorities
relating to the Offers or this Agreement and Bidder will have the right to
comment on those filings or correspondence no later than 24 hours after receipt
of such filing or correspondence. Molina shall not be under any obligation to
accept or in any manner address such comments. Bidder shall have the right to
approve (such approval not to be unreasonably withheld) any references to it
contained in such filing or correspondence, provided that any


                                       10

failure to provide specific proposed changes within 24 hours of receipt of such
filing or correspondence shall be deemed to be approval. Molina will make
reasonably efforts to cause the Company to cooperate with Bidder in connection
with the Company's filings and correspondence described in this Section 3.4(a).

         (b) Bidder agrees to advise Molina, within one (1) U.S. Business Day,
orally and in writing of any request for information or comments from any
governmental agency which could impact Bidder's ability to consummate the
Offers. Bidder agrees to provide Molina with the opportunity to review and
comment on any of Bidder's filings with or correspondence to the Securities
Authorities relating to the Offers or this Agreement and Molina will have the
right to comment on those filings or correspondence no later than 24 hours after
receipt of such filing or correspondence. Bidder shall not be under any
obligation to accept or in any manner address such comments. Molina shall have
the right to approve (such approval not to be unreasonably withheld) any
references to him contained in any such filing or correspondence, provided that
any failure of Molina to provide to Bidder specific proposed changes in writing
within 24 hours of receipt of such filing or correspondence shall be deemed to
be approval.

         (c) Each of Molina and Bidder will make reasonable efforts to include
each other in any oral communications they have with the Securities Authorities
relating to the Offers or this Agreement.

         Section 3.5 OPTIONS.

         (a) Effective upon the Purchase Date, Molina hereby (i) surrenders to
the Company all his unvested options to acquire securities of the Company and
(ii) releases and forever discharges the Company, Bidder and Affiliates of each
of them from any and all claims, liabilities, losses, demands, rights and/or
causes of action of any kind or nature whatsoever he ever had or he has against
the Company, Bidder and Affiliates of each of them, whether at law or in equity,
direct or indirect, fixed or contingent, whether known or unknown arising out of
his unvested options.

         (b) Molina agrees that he will not, at any time after the date hereof,
commence, maintain, prosecute, participate in as a party, or permit to be filed
by any other person on his behalf, any action or proceeding of any kind,
judicial or administrative, in any court or agency against the Company, Bidder
or Affiliates of any of them, with respect to any of his rights to his unvested
options to acquire securities of the Company.

         (c) Except with the consent of Bidder, Molina shall not and shall not
authorize, instruct, or take any other action to cause or encourage the Company,
its Board of Directors or its officers or other officials to modify, or consent
to the modification of, any of the terms or conditions of the unvested options
to acquire securities of the Company held by employees of the Company or its
Subsidiaries.

         (d) Molina shall exercise all of his vested options to purchase
securities of the Company and tender such securities in the Offers no less than
two (2) Business Days before the initial Expiration Date pursuant to the
provisions of Article III. Molina will make reasonable


                                       11

efforts to cause the Company to advise its employees of their opportunity to
exercise their vested options to acquire securities of the Company and to tender
such securities into the Offers.

         Section 3.6 PAYMENT OF BENEFITS.

         (a) Molina agrees to accept in full satisfaction of his rights under
the Pension Plan for Executives of Servicios Administrativos Suma, S.A. de C.V.,
a Subsidiary of the Company, (the "Pension Plan") and all other statutory and
severance benefits to which he may become entitled at the time of his voluntary
termination and/or retirement, payment from the Pension Plan in the amount of
Ps.141,150,000. Bidder hereby acknowledges that Molina is entitled to receive
such sum under the Pension Plan and, following the Purchase Date, shall cause
the Pension Plan to promptly remit such sum to Molina after his voluntary
termination or retirement from employment with the Company and its Subsidiaries,
in accordance with the terms of the Pension Plan, but in no event later than
fifteen (15) Business Days after such termination or retirement.

         (b) Molina acknowledges that his employment with the Company and/or its
Subsidiaries and all agreements, arrangements and understandings relating
thereto shall terminate on the Purchase Date and upon such termination, Molina
hereby remises, releases, discharges and forever quitclaims, the Company and its
Affiliates from any and all claims, liabilities or obligations, of any kind or
nature whatsoever in law or in equity, known or unknown, that Molina ever had,
now has, or may have in the future against the Company or its Affiliates for,
upon or by reason of any matter, arising from Molina's employment with the
Company and/or its Subsidiaries and all agreements, arrangements and
understandings relating thereto, other than obligations arising under or
contemplated by this Agreement.

         (c) Molina agrees that he will not, at any time after the date hereof,
commence, maintain, prosecute, participate in as a party, or permit to be filed
by any other person on his behalf, any action or proceeding of any kind,
judicial or administrative, in any court or agency against the Company, Bidder
or Affiliates of any of them, with respect to any of his rights under the
Pension Plan or any other statutory and severance benefits to which he may
become entitled at the time of his voluntary termination and/or retirement,
unless the payments have not been made timely in accordance with Section 3.6(a)
or Bidder is otherwise in breach of its obligation to pay Molina for the
Securities in the Offers.

         Section 3.7 PAYMENT OF DIVIDENDS. If (i) the Offers are consummated,
(ii) Bidder purchases the Molina Securities pursuant to the Offers, and (iii)
the Company either pays, or announces or publishes a day for the payment of, any
dividend or distribution with respect to the Securities prior to the Purchase
Date, Molina shall pay Bidder, within five (5) Business Days after the
Expiration Date, the aggregate amount of all such dividends or distributions
paid or announced to be paid to security holders of the Company (other than
dividends or distributions paid or announced to be paid to The Pepsi Bottling
Group, Inc. or any of its subsidiaries, including Bidder), unless Bidder has
already reduced the per Security price by the aggregate amount of dividends or
distributions paid or announced to be paid with respect to the Securities as
described in Section 2.1. Molina shall enter into arrangements, reasonably
satisfactory to Bidder, for the payment of the aggregate amount of all such
dividends or distributions paid or announced to be paid to security holders of
the Company (other than dividends or distributions paid or announced to be paid
to The Pepsi Bottling Group, Inc. or any of its subsidiaries, including Bidder)
from the aggregate Offer Price due to Molina and the other Molina Shareholders
for Securities tendered by any of the Molina Shareholders in the Offers.

                                       12


         Section 3.8 SHAREHOLDERS MEETING.

         (a) Molina undertakes and covenants to Bidder that he will recommend to
the Board of Directors of the Company to set the date selected by Bidder (and
communicated by Bidder to Molina in writing), as the date for an ordinary
shareholders meeting to replace and elect new members for such Board of
Directors, subject to the provisions of applicable Laws, the organizational
documents of the Company, any depositary agreements to which the Company is a
party and the CPO Trust Agreement among Banco Nacional de Mexico, S.A., as CPO
Trustee, the Company and the holders and beneficial owners from time to time of
the CPOs.

         (b) Molina undertakes and covenants to Bidder to use his reasonable
efforts to cause the Company to publish a notice calling such shareholders
meeting on the date selected by Bidder, subject to the provisions of applicable
Laws, the organizational documents of the Company, any depositary agreements to
which the Company is a party and the CPO Trust Agreement among Banco Nacional de
Mexico, S.A., as CPO Trustee, the Company and the holders and beneficial owners
from time to time of the CPOs.

                                   ARTICLE IV

                      DELIVERY OF PAYMENTS TO ESCROW AGENT

         Section 4.1 DELIVERY OF PAYMENTS TO ESCROW AGENT. If the Offers are
consummated and Bidder purchases the Molina Securities pursuant to the Offers,
the payment of the aggregate Offer Price due to Molina and the other Molina
Shareholders (net of any amount to be delivered pursuant to Section 3.7 hereof)
shall be delivered to Molina and the other Molina Shareholders except for the
dollar equivalent of the sum of Ps.141,150,000 calculated at the exchange rate
set forth in Section 2.1 (the "Escrow Amount") that Molina agrees to cause to be
delivered to the Escrow Agent to be held, pursuant to the terms and conditions
of the Escrow Agreement.

         Section 4.2 RELEASE OF PAYMENTS FROM ESCROW AGREEMENT. The Escrow Agent
shall retain the Escrow Amount as security for Molina's indemnification
obligations under Section 8.1 and thereafter release it only pursuant to the
terms of the Escrow Agreement.

                                    ARTICLE V

                    REPRESENTATIONS AND WARRANTIES OF MOLINA

         Molina hereby represents and warrants to Bidder, as follows:

         Section 5.1 AUTHORITY. This Agreement constitutes the valid and binding
obligation of Molina, enforceable against him in accordance with its terms.

         Section 5.2 NO CONFLICT. Neither the execution, delivery or performance
of this Agreement nor the consummation by him of the transactions contemplated
hereby, subject to compliance with filing and other requirements under
applicable law, will, directly or indirectly


                                       13

(with or without notice or lapse of time): (i) contravene, conflict with, or
result in a violation of any federal, state, local, municipal, foreign,
international, multinational or other administrative order, constitution, Law,
ordinance, principle of common or civil law, regulation, statute or treaty
("Legal Requirements") applicable to him or any other Molina Shareholder, or any
award, decision, injunction, judgment, order, ruling, subpoena or verdict
entered, made or rendered by any court, administrative agency or other
governmental authority or by any arbitrator ("Orders") applicable to him or any
other Molina Shareholder; or (ii) contravene, conflict with, or result in a
violation or breach of any provision of, or give any person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify any agreement, contract,
obligation, promise or understanding (whether written or oral and whether
express or implied) applicable to Molina, any other Molina Shareholder or any of
their Affiliates or by which any of their properties or other assets are legally
bound, except in each case, for any contravention, conflict, violation, breach
or right which would not materially impair the ability of Molina to perform his
obligations hereunder. No governmental authority has commenced, or threatened in
writing to commence, any proceeding or action against Molina or any other Molina
Shareholder with respect to the Offers, this Agreement or the transactions
contemplated hereby and no other Person has commenced any action, proceeding,
application or claim against Molina or any other Molina Shareholder with respect
to the Offers, this Agreement or the transactions contemplated hereby, before
any court, governmental, regulatory or administrative agency or commission,
authority or tribunal, domestic, foreign or supranational, in each case, which
would materially impair Molina's ability to perform his obligations under this
Agreement.

         Section 5.3 TITLE TO THE MOLINA SECURITIES. As of the date hereof, each
of the Molina Shareholders is the legal and beneficial owner of the type and
number of Securities set forth opposite its name on Schedule 5.3 attached
hereto. The holders of record of such Securities as of the date hereof are also
identified on such Schedule. The Molina Securities have been duly issued, are
fully paid and, except for the Securities in the Molina/PepsiCo Gemex Shares
Trust and the Securities which have been pledged as described in Schedule 5.3,
(i) the Molina Securities are free and clear of any lien, claim, charge,
restriction on transfer, other encumbrance or rights of third parties, and (ii)
there are no shareholder agreements, voting trusts, proxies or other agreements
or understandings with respect to the Molina Securities or the share capital of
the Company which will prohibit, restrict or adversely affect the performance of
Molina's obligations under this Agreement. Upon the purchase of the Molina
Securities pursuant to the Offers, Bidder will own the Molina Securities free
and clear of any lien, claim, charge, restriction on transfer, other encumbrance
or rights of third parties.

         Section 5.4 AFFILIATE RELATIONSHIPS. Except for obligations arising
under or contemplated by this Agreement or as set forth in Exhibit E, (i) the
Company and its Affiliates do not have any liabilities or obligations of any
nature (whether accrued, absolute, contingent, unasserted or otherwise), known
or unknown, to Molina or any of his Affiliates and (ii) neither Molina nor any
of his Affiliates has any claim of any kind against the Company or any of its
Subsidiaries or shareholders, members, owners, officers, directors, employees,
any investment banker, financial advisor, attorney, accountant or other
representative of any of them arising under any agreement, arrangement,
understanding or otherwise (either directly or by virtue of an interest in an
entity which has such claim) relating to the Company or any of its

                                       14

Subsidiaries. Exhibit E presents a complete and accurate list of all agreements,
arrangements and understandings between, on the one hand, Molina and/or any of
his Affiliates, and, on the other hand, the Company and/or any of its
Affiliates.

         Section 5.5 TERMINATION OF AFFILIATE RELATIONSHIPS. Molina represents
that the Company and its Subsidiaries can terminate each of the agreements,
arrangements and understandings listed on Exhibit E as well as any other
agreement, arrangement and understanding between, on the one hand, Molina and/or
any of his Affiliates, and, on the other hand, the Company and/or any of its
Subsidiaries, without payment of any penalty, liquidated damage or termination
charge.

                                   ARTICLE VI

                    REPRESENTATIONS AND WARRANTIES OF BIDDER

         PBG Hispano and BG represent and warrant to Molina, jointly and
severally, as follows:

         Section 6.1 ORGANIZATION AND QUALIFICATION.

         (a) PBG Hispano is a Spanish limited liability company duly organized,
validly existing and in good standing under the laws of Spain with full limited
liability company power and authority to own, lease and operate its assets and
to carry on its business as now being and as heretofore conducted.

         (b) BG is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware with full limited
liability company power and authority to own, lease and operate its assets and
to carry on its business as now being and as heretofore conducted.

         Section 6.2 AUTHORITY. Each Bidder has all requisite power and
authority to enter into, execute and deliver this Agreement, to perform fully
its obligations hereunder and to consummate the Offers and the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
has been duly authorized by each of PBG Hispano and BG. This Agreement has been
duly executed and delivered by each Bidder and constitutes the valid and binding
obligation of each Bidder, enforceable against each Bidder in accordance with
its terms.

         Section 6.3 NO CONFLICT. Neither the execution, delivery or performance
of this Agreement nor the consummation of the transactions contemplated hereby,
including the commencement of the Offers, except as provided in Schedule 6.3,
will, directly or indirectly (with or without notice or lapse of time): (i)
require Bidder to obtain any regulatory approval, action, waiver or consent;
(ii) contravene, conflict with, or result in a violation of, or give any
governmental authority or other person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirements or any Orders; or (iii) contravene,
conflict with, or result in a violation or breach of any provision of, or give
any person the right to declare a default or exercise any remedy

                                       15

under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify any agreement, contract, obligation, promise or understanding (whether
written or oral and whether express or implied) applicable to each Bidder or any
of their Subsidiaries or by which any of their properties or other assets are
legally bound. No governmental authority has commenced, or threatened in writing
to commence, any proceeding or action against Bidder or its Affiliates with
respect to the Offers, this Agreement or the transactions contemplated hereby
and no other Person has commenced any action, proceeding, application or claim
against Bidder or its Affiliates with respect to the Offers, this Agreement or
the transactions contemplated hereby, before any court, governmental, regulatory
or administrative agency or commission, authority or tribunal, domestic, foreign
or supranational, in each case, which would materially impair Bidder's ability
to perform its obligations under this Agreement.

         Section 6.4 NO KNOWLEDGE OF BREACH. Bidder has no actual knowledge on
the date hereof of any facts or circumstances that cause the representations and
warranties of Molina under Sections 5.4 and 5.5 hereof to be incorrect in any
respect which would entitle Bidder to indemnification pursuant to Section 8.1
for any claims in an aggregate amount in excess of $50,000.

                                   ARTICLE VII

                                   TERMINATION

         Section 7.1 TERMINATION. This Agreement may be terminated at any time:

         (a) by mutual written consent of Molina and Bidder;

         (b) by Molina, if Bidder has not commenced the Offers the first
Business Day following the execution of this Agreement, unless Bidder has not
commenced the Offers within the above time-period as a result of a breach by
Molina of any of his material obligations or agreements under this Agreement;

         (c) by Bidder, by giving written notice of such termination to Molina,
if Molina shall have breached any of his material representations, warranties,
covenants or agreements under this Agreement, and such breach shall be incapable
of cure or has not been cured within ten (10) Business Days following the giving
of written notice of such breach to Molina;

         (d) by either Molina or Bidder, by giving written notice of such
termination to the other party, if there shall be in effect any Law that
prohibits the consummation of the Offers or any transactions contemplated hereby
or if consummation of the Offers or any the transactions contemplated hereby
would violate any non-appealable final order, decree or judgment of any court or
governmental entity having competent jurisdiction;

         (e) by Molina, by giving written notice of such termination to Bidder,
if Bidder shall have breached any of its material representations, warranties,
covenants or agreements under this Agreement and such breach shall be incapable
of cure or has not been cured within ten (10) Business Days following the giving
of written notice of such breach to Bidder;


                                       16

         (f) by Molina or Bidder, if the Offers expire or terminate in
accordance with their terms without the purchase of Securities in the Offers; or

         (g) by Bidder, following the purchase of the Molina Securities pursuant
to the Offers.

         Section 7.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement in accordance with Section 7.1 hereof, this Agreement shall
thereafter become void and have no effect, and neither party shall have any
liability to the other or its respective Affiliates, directors, officers or
employees, provided that nothing herein will relieve any party from liability
for any breach prior to such termination of any of its representations,
warranties or covenants under this Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.1 INDEMNIFICATION.

         (a) As the sole and exclusive remedy for any breach of any warranty or
representation made by Molina under Sections 5.4 and 5.5 hereof, Molina agrees
to indemnify Bidder, its Affiliates and the officers, directors, employees,
agents, partners and shareholders of each of them (collectively, the
"Indemnified Parties") for, and hold each Indemnified Party harmless from and
against: (i) any and all damages, losses, claims and other liabilities of any
and every kind, including, without limitation, judgments and costs of
settlement, and (ii) any and all out-of- pocket costs and expenses of any and
every kind, including, without limitation, reasonable fees and disbursements of
counsel for such Indemnified Parties (all of which expenses periodically shall
be reimbursed as incurred), in each case, arising out of or suffered or incurred
in connection with any breach of any warranty or representation made by Molina
under Sections 5.4 and 5.5 hereof only and for no other provisions of this
Agreement or for any other reason; provided, however, that Molina shall not be
liable to Bidder under any circumstances pursuant to this Section 8.1 in an
amount in excess of the sum of Ps.188,200,000.

         (b) Bidder shall, with respect to (i) claims asserted in writing
against any Indemnified Party by any third party ("Third Party Claims") and (ii)
any other claims which would entitle Bidder to claim indemnification under this
Section 8.1, give prompt written notice to Molina describing in reasonable
detail any liabilities which might give rise to any such claims for indemnity
under this Section 8.1, provided, however, that any failure to give such notice
will not waive any rights of Bidder to indemnification hereunder, except to the
extent that Molina is actually and materially prejudiced by the failure to so
notify and then only to the extent of damages caused by the failure to notify.

         (c) Molina shall be entitled, at his own expense (i) to participate in
the defense of any Third Party Claim, or (ii) to undertake the defense of a
Third Party Claim that is for an amount not in excess of the then existing
Escrow Amount (reduced by the amount of any other outstanding and unresolved or
unpaid claims pursuant to this Section 8.1) and involves solely the

                                       17

payment of money. Molina shall have fifteen (15) Business Days after receipt of
the above-mentioned notice to undertake to conduct and control through counsel
of his own choosing (subject to the written consent of Bidder, which consent
shall not be unreasonably withheld) and at his sole risk and expense, the good
faith settlement which cannot be effected without the written consent of Bidder
in its sole discretion unless such settlement is for an amount not in excess of
the then existing Escrow Amount (reduced by the amount of any other outstanding
and unresolved or unpaid claims pursuant to this Section 8.1 and involves solely
the payment of money) or defense of such claim, and Bidder shall cooperate with
Molina in connection therewith; provided, that Bidder shall be entitled to
participate in such settlement or defense through counsel chosen by it, the fees
and expenses of such counsel shall be borne by Bidder.

         (d) Notwithstanding the foregoing, Molina shall not be entitled to
assume the defense of any Third Party Claim if Molina does not give Bidder the
timely written notice of the undertaking referred to in Section 8.1(c)(ii).

         (e) So long as Molina is participating in the defense of a Third Party
Claim in good faith or is reasonably defending any Third Party Claim in good
faith with continuity and diligence, Bidder will cooperate with Molina by
providing records and information which are reasonably relevant to such Third
Party Claim, at Molina's expense.

         Section 8.2 CONFIDENTIALITY. Bidder and Molina will maintain in
confidence, and will cause their respective Subsidiaries, Affiliates, directors,
officers, employees, advisors, agents and representatives to maintain in
confidence, any written, oral or other information obtained in confidence from
the other party in connection with this Agreement or the transactions
contemplated hereby (including any proposed offers by Bidder to acquire capital
stock of the Company), unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the transactions
contemplated by this Agreement or (c) the furnishing or use of such information
is required by legal proceedings or applicable law. Whether or not the
transactions contemplated by this Agreement are consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.

         Section 8.3 FURTHER ASSURANCES. The parties each agree (a) to furnish
upon request to each other such further information, (b) to execute and deliver
to each other such other documents and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement.

         Section 8.4 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.

         Section 8.5 FORUM. This Agreement shall be subject to the exclusive
jurisdiction of the Federal Courts for the Southern District of New York and
State courts of New York County in the State of New York. The parties
irrevocably waive, to the fullest extent

                                       18

permitted by law, any objection or immunities to jurisdiction which they may now
or hereafter have (including sovereign immunity, immunity to pre-judgment
attachment, post-judgment attachment and execution) to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby, or any judgment entered by any court in
respect hereof brought in the State of New York, and further irrevocably waive
any claim that any suit, action or proceeding in the Borough of Manhattan, New
York has been brought in an inconvenient forum. For the purpose of proceedings
in the courts described in this Section 8.5, Molina hereby irrevocably
designates CT Corporation as his agent, and in the event that such agent or any
successor shall cease to represent him, Molina shall promptly and irrevocably
designate a successor and notify Bidder thereof, to accept on his behalf service
of any and all process or other documents which may be served in any action or
proceeding in any of such courts. Molina further agrees that (i) service upon
such agent shall constitute valid and effective service upon Molina and that
failure of such agent to give any notice of such service to Molina shall not
affect the validity of such service or any judgment rendered in any action or
proceeding based thereon and (ii) that service of any and all such process or
other documents of Molina may also be effected by registered mail to his address
as set forth in Section 8.14 hereof.

         Section 8.6 REMEDIES CUMULATIVE. Except for the indemnity provided
under Section 8.1 in connection with a breach of any warranty or representation
made by Molina under Sections 5.4 and 5.5 hereof, the rights and remedies of the
parties to this Agreement are cumulative and not alternative. Neither any
failure nor any delay by either party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. Except as
provided in Sections 8.1 and 8.17, nothing in this Agreement shall convey any
rights upon any person or entity which is not a party to this Agreement. Bidder
shall not have the right to withhold the release or payment to Molina of the
Escrow Amount except in accordance with the Escrow Agreement for claims made
under Section 8.1 herein.

         Section 8.7 ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof. This Agreement supersedes all prior agreements and
understandings, written or oral, between the parties with respect to such
subject matter.

         Section 8.8 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.

         Section 8.9 AMENDMENT. This Agreement may not be amended except by a
written instrument signed by each party hereto.

         Section 8.10 WAIVER. At any time any party hereto may (a) extend the
time for the performance of any of the obligations or other acts of any other
party hereto or (b) waive compliance with any of the agreements of any other
party or any conditions to his or its own

                                       19

obligations, in each case, only to the extent such obligations, agreements and
conditions are intended for its benefit; PROVIDED, HOWEVER, that any such
extension or waiver is set forth in a writing executed by such party.

         Section 8.11 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement and either party's rights or
obligations hereunder may not be assigned or delegated without the prior written
consent of the other party hereto, except that Bidder may assign in whole or in
part, the right (but not the Bidder's obligation) to purchase the Securities to
one or more of its Affiliates.

         Section 8.12 EXPENSES. Whether or not the purchase and sale of the
Securities is consummated, each party shall pay all costs and expenses that he
or it incurs with respect to the negotiation, execution, delivery and
performance of the Agreement and consummation of the transactions contemplated
hereby.

         Section 8.13 COUNTERPARTS; HEADINGS. This Agreement may be executed in
two counterparts, each of which shall be an original, but which together shall
constitute one and the same instrument. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.

         Section 8.14 NOTICES. Any and all notices or other communications or
deliveries required or permitted to be given under any of the provisions of this
Agreement shall be in writing and shall be deemed to have been duly given (i)
five days after the mailing thereof by registered mail, return receipt
requested, (ii) on the day following mailing when sent by overnight express mail
or courier, signature required, and (iii) at the actual time of receipt when
delivered personally, addressed to Molina or Bidder at the addresses set forth
below (or at such other address as any party may specify by notice to the other
parties hereto given as aforesaid):

         If to Molina, to:

         Campos Eliseos No. 345
         Col. Polanco
         11550 Mexico, D.F.
         Mexico
         Phone: (011-5255) 5280-8111
         Fax: (011-5255) 5280-5116

         With a copy to:

         Fried, Frank, Harris, Shriver & Jacobson
         One New York Plaza,
         New York, NY 10004
         Attn: Lee S. Parks, Esq.
         Phone: (212) 859-8000


                                       20

         Fax: (212) 859-4000

         If to Bidder, to:

         c/o The Pepsi Bottling Group, Inc.
         1 Pepsi Way
         Somers, NY 10589
         Attn: Senior Deputy General Counsel
         Phone: (914) 767-7971
         Fax: (914) 767-7944

         With a copy to:

         Proskauer Rose LLP
         1585 Broadway
         New York, NY 10036
         Attn: Carlos E. Martinez, Esq.
         Phone:212-969-3000
         Fax:212-969-2900

         Section 8.15 SPECIFIC PERFORMANCE. Except for the indemnity provided
under Section 8.1 in connection with a breach of any warranty or representation
made by Molina under Sections 5.4 and 5.5 hereof, without limiting the rights of
each party hereto to pursue other legal and equitable rights available to such
party for any other party's failure to perform its obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them shall be entitled to specific performance, injunctive relief or
other equitable remedies in the event of any such failure. To the extent any
party may be entitled to the benefit of any provision of law requiring any party
in any suit, action or proceeding arising out of or in connection with this
Agreement or any of the transactions contemplated hereby to post security for
litigation costs or otherwise post a performance bond or guaranty or to take any
similar action, each party hereby irrevocably waives such benefit in each case
to the fullest extent now or hereafter permitted under the laws of any such
other jurisdiction.

         Section 8.16 SURVIVAL. Except for (a) the representations of Molina set
forth in Section 5.3 with respect to title to the Molina Securities which shall
survive indefinitely in the event Bidder purchases the Molina Securities
pursuant to the Offers and (b) the provisions of this Article 8 which shall
survive indefinitely whether or not Bidder purchases the Molina Securities
pursuant to the Offers; the representations, warranties and covenants in this
Agreement shall survive for three (3) years after the latest of the consummation
of the Offers or the termination of this Agreement.

         Section 8.17 THIRD PARTY BENEFICIARIES. The parties hereto expressly
agree that the Company is a third party beneficiary of Sections 3.5 and 3.6
hereof and that PepsiCo is a third party beneficiary of this Agreement.


                                       21

IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be
executed as of the date first written above.


                                  PBG GRUPO EMBOTELLADOR HISPANO-MEXICANO S.L.


                                  By: /s/ Inigo Madariaga
                                  ----------------------------------------------
                                  Name: Inigo Madariaga
                                  Title: Managing Director


                                  BOTTLING GROUP, LLC

                                  By: /s/ Alfred H. Drewes
                                  ----------------------------------------------
                                  Name: Alfred H. Drewes
                                  Title: Principal Financial Officer


                                  /s/ Enrique C. Molina Sobrino
                                  ----------------------------------------------
                                  ENRIQUE C. MOLINA SOBRINO


                      EXHIBIT A TO THE AGREEMENT TO TENDER

                            FORM OF ESCROW AGREEMENT

                              (See Exhibit (d)(3))

                      EXHIBIT B TO THE AGREEMENT TO TENDER

                       FORM OF PEPSICO AGREEMENT TO TENDER

                              (See Exhibit (d)(1))


                      EXHIBIT C TO THE AGREEMENT TO TENDER

                         CONSENT FROM GUADALUPE BASTERIS

                                       3

                      EXHIBIT D TO THE AGREEMENT TO TENDER

                CONDITIONS OF THE CONSUMMATION OF BIDDER'S OFFERS


                  Bidder will not be required to consummate the Offers if:

                  (i) less than 90% of all of the outstanding shares of capital
stock of the Company (including shares represented by CPOs and GDSs) on the
Expiration Date are tendered into the Offers on or prior to the Expiration Date
and not withdrawn,

                  (ii) less than all of the Securities owned by PepsiCo and the
other PepsiCo Shareholders are tendered into the Offers and not withdrawn,

                  (iii) less than all of the Securities owned by Molina and the
other Molina Shareholders are tendered into the Offers and not withdrawn,

                  (iv) the conditions to the [Mexican Offer] [U.S. Offer] have
not been satisfied or waived on or before the Expiration Date of the [Mexican
Offer] [U.S. Offer]or the [Mexican Offer] [U.S. Offer ] has been terminated
without the purchase of any Securities, or

                  (v) at any time before the acceptance of the Securities for
payment, any of the following events occurs:

         1.   a material breach by Molina of any of the material provisions of
              this Agreement, including, without limitation, a breach by Molina
              of the representations and warranties in Sections 5.4 and 5.5
              hereof;

         2.   a material breach by PepsiCo of any of the material provisions of
              the PepsiCo Agreement to Tender;

         3.   any regulatory approval, action, waiver or consent required to
              consummate the Offers, including any approval of the CNBV, the SEC
              or any securities exchange, (a) shall not have been obtained, or
              shall have been obtained under conditions or restrictions that
              would adversely affect the Mexican Offer, the U.S. Offer or the
              Company or its Subsidiaries; (b) shall have been modified in any
              material way that would adversely affect the Mexican Offer, the
              U.S. Offer or the Company or (c) has been revoked;

         4.   (a) there shall be pending any action, suit, proceeding or claim
              by any person, domestic or foreign, which has a reasonable
              likelihood of success, or by any government, governmental
              authority or other regulatory or administrative agency or
              commission, domestic, foreign or supranational, before any court,
              governmental, regulatory or administrative agency or commission,
              authority or tribunal, domestic, foreign or supranational, or
              there shall be any statute, rule, regulation, order, judgment,
              decree or injunction applicable to the Mexican Offer or the U.S.
              Offer, by such governmental or administrative bodies, prohibiting,
              materially restricting or


                                       4

              substantially delaying, or seeking to prohibit, materially
              restrict or substantially delay the consummation of the Mexican
              Offer or the U.S. Offer, or materially modifying or affecting the
              Mexican Offer or the U.S. Offer, or (b) any change, event,
              condition or development which has had or would reasonably be
              expected to result in a Material Adverse Change;

         5.   any filings of the Company with the SEC, the CNBV or any
              securities exchange shall have contained, at the time of their
              respective filings, untrue statements of material facts or omitted
              to state material facts necessary to make the statements made
              therein, in light of the circumstances in which they were made,
              not misleading, and such untrue statements or omissions would
              reasonably be expected to cause a Material Adverse Change;

         6.   any material adverse change in the financial markets, including
              without limitation, (a) any general suspension of trading in any
              of the Securities on the NYSE or the Mexican Stock Exchange
              (except for daily suspensions in accordance with their respective
              rules or policies), (b) a declaration of a banking moratorium or
              imposition of limitations on the extension of credit generally in
              the United States or any adverse change in exchange controls in
              the U.S. or Mexico, or (c) any material limitations on the markets
              for currency in Mexico;

         7.   commencement of a war, armed hostilities, military coup d'etat,
              acts of terrorism, collapse of the government or other national or
              international crisis in each case involving the United States or
              Mexico which would reasonably be expected to result in a Material
              Adverse Change;

         8.   the Company or any of its Subsidiaries shall have, at any time
              after June 30, 2002, effected any change to their respective
              capital structure which would reasonably be expected to result in
              a Material Adverse Change, including, without limitation, (a)
              issued, sold or otherwise transferred, or proposed to do any of
              the foregoing, to any person, any shares of capital stock or other
              securities (including options to purchase shares of capital stock
              and any debt securities), (b) declared, paid or proposed to
              declare or pay any dividend or distribution on the Securities, (c)
              altered, or proposed to alter, any material term of any
              outstanding security of the Company or any of its Subsidiaries
              other than employee stock options consistent with the provisions
              of this Agreement, (d) split, combined or otherwise changed, or
              authorized or proposed the split, combination or other change of,
              the Securities or the Company's or any of its Subsidiaries'
              capitalization, and (e) authorized, recommended, proposed or
              entered into any merger, consolidation, liquidation, dissolution,
              business combination, joint venture, strategic alliance or similar
              arrangement involving any material assets, acquisition or
              disposition of a material amount of assets or securities, other
              than pursuant to the Offers;

         9.   the Company or any of its Subsidiaries shall have at any time
              after June 30, 2002 operated its business otherwise than in the
              ordinary course consistent with past practice, including, without
              limitation, (a) entered into or invested in a line of


                                       5

              business different from those in which the Company or any of its
              Subsidiaries was engaged as of June 30, 2002, (b) effected any
              material change to its corporate structure, including, without
              limitation, the transfer or division of all or a significant
              portion of its assets, (c) disposed of, or created liens on, other
              than pursuant to credit facilities existing as of June 30, 2002,
              any material assets of the Company or any of its Subsidiaries, (d)
              voluntarily or involuntarily terminated or modified, in any
              material adverse manner, any material agreements, (g) made a
              material change in its accounting practices (other than as
              required by U.S. or Mexican GAAP) or regulatory compliance
              procedures, (e) waived, released, assigned, settled or compromised
              any claims or litigation involving amounts or other rights or
              assets in excess of $2,000,000, or (f) amended or authorized or
              proposed any amendments to the Company's Bylaws or any other
              organizational documents;

         10.  the Company and its Subsidiaries have Consolidated Adjusted Net
              Debt in excess of Ps.2,648,353,587 or the Company and its
              Subsidiaries do not have Consolidated Adjusted Working Capital of
              at least Ps.190,750,000; and

         11.  any default by the Company or any of its Subsidiaries under any
              indebtedness which would reasonably be expected to result in a
              Material Adverse Change, or which would, following the purchase of
              Securities in the Offers, result in a cross-default under any
              indebtedness of PBG or BG.


                                       6

                      EXHIBIT E TO THE AGREEMENT TO TENDER


                  (i) List of claims of Molina and/or any of his Affiliates
against the Company or any of its Affiliates or shareholders, members, owners,
officers, directors, employees, any investment banker, financial advisor,
attorney, accountant or other representative of any of them.

                  (ii) List of all agreements, arrangements and understandings
between, on the one hand, Molina and/or any of his Affiliates, and, on the other
hand, the Company and/or any of its Affiliates.



                                                                                        MAXIMUM POSSIBLE
                                                                                        CLAIM OR LIABILITY
        NAME OF AFFILIATE OF        PRODUCT / SERVICE                                   (IN THOUSAND OF
        MOLINA                      PROVIDED                   WRITTEN CONTRACT         MEXICAN PESOS)
        ------                      --------                   ----------------         --------------
                                                                            
1.      Chevrolet Mexicana, S.A.    Fleet (Vehicles and        No                                 195
        de C.V.                     Spare Parts)

2.      Immobiliaria Troika         Real Estate                No                                  0

3.      Ingenio Nueva               Sugar Mill                 No                                  0
        Esperanza de Pujiltic,
        S.A. de C.V.

4.      Carrocerias Suma, S.A. de   Fleet - Trailers (Truck    No                                 416
        C.V.                        bodies and Racks)

5.      Granja Buen Agua            Real Estate - Garci        No                                 620
                                    Crespo

6.      Camiones Del Valle de       Fleet                      No                                2,055
        Mexico, S.A. de C.V.
        (Mercedes Benz)

7.      Molienda                    Sugar Distributor          No                                  0
        Azucarera Industrial,
        S.A. de C.V./Consorcio
        Azucarero CAZE,
        S.A. de C.V.

8.      Comercializadora            Sugar Distributor          No                                  0
        Industrial

9.      Transportes de Carga        Interplant Shipments -     No                                2,415
        Especializada, S.A.         - Freight (sugar)
        de C.V.

10.     Corporacion Comercial y     Rental of Two Machines     Agreement dated March               0
        de Servicios S.A. de C.V.   used in production of      18, 2002 between
                                    jugs                       Corporacion Comercial
                                                               y de Servicios S.A. de
                                                               C.V and Procesos
                                                               Plasticos, S.A. de




                                                                                        MAXIMUM POSSIBLE
                                                                                        CLAIM OR LIABILITY
        NAME OF AFFILIATE OF        PRODUCT / SERVICE                                   (IN THOUSAND OF
        MOLINA                      PROVIDED                   WRITTEN CONTRACT         MEXICAN PESOS)
        ------                      --------                   ----------------         --------------
                                                                            
                                                               C.V.

11.     Uniform Design, S.A. de     Uniforms                   Agreement dated March               0
        C.V.                                                   30, 2000 between
                                                               Uniform Design, S.A.
                                                               de C.V. and the
                                                               Company

12.     Tecnorafia, S.A. de C.V.    Plastics, Labels,          No                                9,429
                                    Shrinkfilm

13.     Servicios Corporativos      Administrative Services    Agreement dated                     0
        Escorpion, S.A. de C.V./                               January 1, 2002 between
        Grupo Turistico                                        Servicios Corporativos
        Escorpion, S.A. de C.V.                                Escorpion, S.A. de C.V.and
                                                               Servicios Administrativos
                                                               Suma, S.A. de C.V.


14.     Desarrrollos Corporativos                                                                  0
        ENMO, S.A. de C.V.

15.     Enrique Molina Sobrino                                 Yes                                 0

16.     Enrique Molina Basteris     Former CEO of Gemex        No                                  0

17.     Patricia Molina Basteris    Represents Uniform Design  No                                  0

18.     Claudia Molina Basteris     Represents Tecnorafia      No                                  0

19.     Fernando Molina Sobrino     Worked for many years      No                                  0
                                    for different entities
                                    (Emsa, Bepura and
                                    Gemex)

20.     La Peninsular Seguros S.A.  Insurance                  1) Policy for the                   0
                                                               Company and its
                                                               Subsidiaries to
                                                               cover the plants
                                                               dated May 8, 2002
                                                               2) Policy for the
                                                               Company and its
                                                               Subsidiaries to
                                                               cover



                                       2



                                                                                        MAXIMUM POSSIBLE
                                                                                        CLAIM OR LIABILITY
        NAME OF AFFILIATE OF        PRODUCT / SERVICE                                   (IN THOUSAND OF
        MOLINA                      PROVIDED                   WRITTEN CONTRACT         MEXICAN PESOS)
        ------                      --------                   ----------------         --------------
                                                                            
                                                               Employee Group
                                                               Insurance dated
                                                               January 1, 2002.

21.     AeroCorp                                                                                   0

22.     Aerotransportes Privados                                                                   0

23.     Patricia Molina Basteris    Owner of portion of        No                                  0
                                    Acapulco Property



                                       3

                     SCHEDULE 2.2(g) TO AGREEMENT TO TENDER

               PROPERTIES THAT SHALL HAVE BEEN TRANSFERRED TO THE
         COMPANY AS A CONDITION OF BIDDER'S OBLIGATION TO COMMENCE THE
                                     OFFERS

                  (i) Property located at the Federal Highway Mexico-Tehuacan Km
117.5, on Tehuacan, Puebla, Mexico; and

                  (ii) Lot 15 "C" resulting from the subdivision of the vacant
plot identified as lot 15 "B" located in Cumbres del Llano Largo of the City and
Port of Acapulco, State of Guerrero.


                                       4

                    SCHEDULE 3.3(c)(i) TO AGREEMENT TO TENDER

               LIST OF EMPLOYEES THAT MOLINA SHALL NOT SOLICIT FOR
        EMPLOYMENT, HIRE OR DO ANY ACT INTENDED TO DIVERT THEM FROM THE
                                    BUSINESS



                     Title                                           Name of Employee
                     -----                                           ----------------
                                                           
Director Electropura                                          Bernardo Trueba Murillo
Director Corporativo Nuevos Proyectos                         Gilberto Terrones Sasso
Director Regional Metropolitana                               Jose Bustamante Barragan
Director Regional Centro                                      Emilio Sabbatini Rios
Director Corporative Mercadotecnia                            Oscar Munoz Vidales
Director Regional Noreste                                     Rafael Miyar Luna
Director Corporativo Recursos Humanos                         Jose Antonio Fernandez Negrete
Director Corporativo Manufactura y Logistica                  Dionisio Martin Garcia
Director Corporativo Juridico                                 Luis Alejandro Bustos Olivares
Director Corporativo Tecnologias de Informacion               Fernando Flores Gutierrez
Director Regional Sureste                                     Roger H. Evia Urbina
Director Regional Sur                                         Ursus Leeg Esquivel
Director Corporativo Administracion y Finanzas                Juan Manuel Munoz Martinez
Gerente General Proplasa                                      Luis Rodriguez Longo
Gerente Zona de Administracion y Finanzas                     Roberto Padron Moncada
Gerente Zona de Manufactura y Logistica                       Ramon Calvillo Esparza
Gerente Zona de Manufactura y Logistica                       Juan Antonio Andrade Guzman
Gerente Zona de Ventas Coahuila                               Eduardo Issac Rosales Munoz
Gerente Corporativo de Proyectos Especiales                   Domingo Canizo Cosio
Gerente Corporativo de Cuentas Nacionales                     Humberto Leal Flores
Gerente Zona de Administracion y Finanzas                     Benjamin Martinez Abrego
Gerente Zona Recursos Humanos Electropura                     Lorenzo Sierra Ramos
Gerente Corporativo de Contraloria                            Eduardo Jesus Sayavedra Herrerias
Gerente Zona de Ventas Region Hidalgo                         Alberto Cesar Perez Ramos
Gerente Zona de Recursos Humanos                              Bernardo Cabrera Najera
Gerente Zona de Ventas Region II                              Mario Alberto Dehesa Villafuerta
Gerente Zona de Ventas Region I                               Raul Estrada Carranza
Gerente Zona Mercados Modernos                                Arturo Sierra Fojo
Gerente General Epecsa                                        Rafael Covarrubias Lopez
Gerente Zona de Distribucion                                  Eduardo Lopez Portillo Loaiza
Gerente Zona de Ventas Region Izcalli                         Joel Alfredo Martinez Quintero
Gerente Zona Administracion y Finanzas                        Alberto Jorge Ramos Burguete
Gerente Zona de Ventas Chihuahua                              Alejandro Castellanos Luna
Gerente zona de Ventas Refresco                               Alfredo Solis Rubio
Gerente Zona de Ventas La Laguna                              Alfredo Torres Ramirez
Gerente Zona de Ventas Refresco Centro                        Antonio Riveroll Esperon
Gerente Zona de Recursos Humanos                              Antonio Sarmiento Esquinca
Gerente Zona Logistica y Flota                                Apolonia Sanchez Sosa
Gerente Zona de Ventas Agua Centro                            Armando Alvarez Perez



                                       5



                     Title                                           Name of Employee
                     -----                                           ----------------
                                                           
Gerente Zona Operaciones Foraneas                             Armando Frigollet Gomez
Gerente Corporativo de Gastos Cooperativos                    Arturo Castillo Guzman
Gerente Zona Operaciones Metropolitana                        Arturo Langle Vazquez
Gerente Zona de Desarrollo de Mercados                        Carlos David Fernandez Perez
Gerente Zona Manufactura                                      Carlos Lerma Bonilla
Gerente Corporativo de Sueldos y Organizacion                 Carlos Manuel Mendoza Lugo
Gerente Zona Administracion y Finanzas                        Carlos Mar Mar
Gerente Corporativo de Ingenieria y Proyectos                 David Pang Castillo
Gerente Zona Administracion y Finanzas                        Denny Ayala Castillo
Gerente Corporativo de Auditoria Interna                      Eduardo Gerardo Rios Monroy
Gerente Zona de Ventas Refresco Toluca-Morelos                Fernando Luis Remes Tostado
Gerente Zona de Recursos Humanos                              Francisco Cervera Contreras
Gerente Zona de mercados Modernos                             Francisco Javier Tatto Garcia
Gerente Zona de Recursos Humanos                              Francisco Olivaraes Uribe
Gerente Corporativo de Relaciones con Inversionistas          Irma Montemayor Schivy
Gerente Zona de Ventas Monterrey                              Isaias Rosales Munoz
Gerente Zona de Ventas Golfo                                  Jaime Martin de la Torre
Gerente Zona de Ventas Frontera                               Jesus Manuel Hernandez Aguilar
Gerente Corporativo de Tesoreria                              Jesus Romo Rocha
Gerente Corporativo de Mercadotecnia                          Joel Rizo Gutierrez
Gerente Zona de Recursos Humanos                              Jorge Pulido Cruz
Gerente Coporativo de Planeacion                              Jose Antonio Morales Bernal
Gerente Corporativo de Compras                                Jose Luis Almaraz Kladiano
Gerente Zona Desarrollo de Mercado                            Juan Jose Cabello Wallace
Gerente Corporativo de Logistica                              Miguel Angel Rodriguez Parra
Gerente Corporativo de Capacitacion y Desarrollo              Miriam Piso Reiter
Gerente Zona Manufactura y Logistica                          Pablo Ibarra Gonzalez
Gerente Zona de Ventas Refresco Guerrero                      Roberto Anorve Guillen
Gerente Zona de Manufactura y Logistica                       Roman Baqueiro Ramos
Gerente Zona de Ventas Electropura                            Ruben Mota Acosta
Gerente Zona de Administracion y Finanzas                     Samuel Fuentes Perez
Gerente Zona Desarrollo de Mercado                            Sanchez Munoz Alejandro
Gerente Zona Manufactura y Logistica                          Sergio Ortiz Flores
Gerente Zona de Distribucion                                  Sergio Sanchez Velasco
Gerente Zona de Ventas Agua Sur                               Mario Lopez Tinoco
Gerente Zona de Desarrollo de Mercados                        Alfonso Noriega Ortiz
Gerente Zona de  Ventas Refresco Bajio                        Artemio Rodriguez Larios
Gerente Corporativo de Relaciones Laborales                   Gabriel Cuevas Estrada
Gerente Corporativo de Cuentas por Cobrar                     Lusi Antonio Correa Noyola
Gerente General Garci Crespo                                  Jose Kuri Pastjane
Gerente Corporativo                                           Edgar Shaadi Shaadi
Sub-Gerente Corporativo                                       Tomas Ramos



                                       6

                      SCHEDULE 6.3 TO AGREEMENT TO TENDER

          REGULATORY APPROVALS REQUIRED FOR THE EXECUTION, DELIVERY OR
            PERFORMANCE OF THIS AGREEMENT OR THE CONSUMMATION OF THE
                  TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT

ACTIONS AND APPROVALS BY:

     1.   THE SEC;
     2.   THE COMISION NACIONAL BANCARIA Y DE VALORES OF MEXICO;
     3.   THE MEXICAN STOCK EXCHANGE; AND
     4.   THE MEXICAN FEDERAL COMPETITION COMMISSION.

EX-99.D.3

                                                                  Exhibit (d)(3)

                                ESCROW AGREEMENT

      This Escrow Agreement (the "Agreement") is made as of the 4th day of
October 2002 by and among PBG Grupo Embotellador Hispano-Mexicano, S.L., a
Spanish limited liability company ("PBG Hispano"), Bottling Group, LLC, a
Delaware limited liability company ("BG" and together with PBG Hispano, the
"Bidder"), Enrique C. Molina Sobrino ("Molina") and The Bank of New York, a New
York banking corporation (the "Escrow Agent").

      WHEREAS, Molina and Bidder have entered on the date hereof into an
Agreement to Tender (the "Agreement to Tender") pursuant to which Molina agreed
to tender and not withdraw (except as permitted in section 3.2 of the Agreement
to Tender) the Molina Securities (as such term is defined in the Agreement to
Tender) in the Offers (as such term is defined in the Agreement to Tender);

      WHEREAS, pursuant to the Agreement to Tender, Molina has certain
indemnification obligations to Bidder (the "Obligations");

      WHEREAS, pursuant to the Agreement to Tender, the parties agreed that from
the purchase price for the Molina Securities, a sum equal to the U.S. dollar
equivalent of Ps.141,150,000 calculated at the exchange rate set forth in
Section 2.1 of the Agreement to Tender (the "Indemnity Amount") shall be
delivered to the Escrow Agent to be held as provided herein; and

      WHEREAS, capitalized terms used herein but not defined shall have the
meanings ascribed to them in the Agreement to Tender.

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, the parties hereto agree as follows:

      1. Delivery of Escrow Amount.

      (a) Prior or on the date hereof, Molina shall have entered into
arrangements, reasonably satisfactory to Bidder for the delivery of the
Indemnity Amount to the Escrow Agent from the aggregate Offer Prices due to
Molina and the other Molina Shareholders if, in accordance with the terms of the
Agreement to Tender, Molina tenders and causes to be tendered the Molina
Securities in the Offers and Bidder accepts the tender of the Molina Securities.

      (b) The Escrow Agent shall, upon receipt of the Indemnity Amount deposit
such amount (such amount plus any interest accrued or other income earned
thereon, the "Escrow Amount") in an escrow account that it shall create (the
"Escrow Account"), and will hold the Escrow Amount in accordance with the terms
and conditions of this Agreement.


                                       1

      2. Escrow Fund Income.

      (a) The Escrow Agent shall invest any monies held in the Escrow Account in
any of the following investments (collectively, "Permitted Investments") as
directed in writing by Molina from time to time: (i) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having maturities not exceeding one year; (ii)
certificates of deposit and eurodollar time deposits, in each case with
maturities not exceeding one year, and overnight bank deposits with any domestic
commercial bank having capital and surplus in excess of $500,000,000; (iii)
commercial paper rated A-1 or the equivalent thereof by Standard & Poor's
Corporation or P-1 or the equivalent thereof by Moody's Investors Service, Inc.;
and (iv) any other investment to which both Molina and Bidder may agree, and in
each case maturing within six months after the date of the delivery of the
Indemnity Amount to the Escrow Agent; provided, however, if the amount of monies
held in the Escrow Account is insufficient to make an investment in any
Permitted Investment, the Escrow Agent shall invest such monies in a money
market account of the Escrow Agent or a New York money center bank designated by
Molina.

      (b) Any interest accruing from time to time in the Escrow Account shall be
paid to Molina, monthly, unless otherwise directed by Molina; provided that to
the extent the Escrow Account has incurred any losses as a result of the
liquidation of investments made by the Escrow Agent, the Escrow Agent shall
withhold in the Escrow Account from such interest payments to be made to Molina
an amount equal to the lesser of (i) the total amount of interest to be paid to
Molina and (ii) the aggregate amount of such losses. Molina acknowledges that
payment of any interest earned on the monies held in the Escrow Account will be
subject to backup withholding penalties unless a properly completed Internal
Revenue Service Form W-8 certification is submitted to Escrow Agent. For tax
purposes, the monies held in the Escrow Account shall be the property of Molina
and all interest and other income earned on such monies shall be the income of
Molina. Molina shall, if necessary, file tax returns and, if necessary, the
Escrow Agent shall file a Form 1099 consistent with such treatment.

      3. Assurances.

      Molina and Bidder each shall at the request of the other execute and
deliver all other documents and take all such further action as the parties may
reasonably request in order to effect the purposes and provisions of this
Agreement.

      4. Default. Remedies.

      (a) In the event that, at any time, Bidder shall, reasonably and in good
faith, assert a claim for indemnification pursuant to Section 8.1 of the
Agreement to Tender (a "Claim"), Bidder shall deliver to Molina and the Escrow
Agent a written notice (the "Indemnification Notice"), which Indemnification
Notice shall specify, in reasonable detail, (i) the basis for the Claim and (ii)
the estimated amount of such Claim together with fees and costs related to such
Claim determined in good faith by the Bidder (the "Indemnity Estimate"). If the
actual damages are determined to be greater than the


                                       2

Indemnity Estimate, Bidder shall not be limited in its remedies to the Indemnity
Estimate. If the actual damages are determined to be less than the Indemnity
Estimate, any amount previously paid to Bidder with respect to such Claim which
is in excess of the actual damages shall be returned promptly to the Escrow
Account and disbursed only in accordance with its terms. Molina shall have a
period of fifteen (15) Business Days following receipt of the Indemnity Notice
within which to deliver to Bidder and Escrow Agent a written notice (the
"Response Notice"), which Response Notice shall advise Bidder either (A) that
Molina agrees that Bidder is entitled to indemnification pursuant to Section 8.1
of the Agreement to Tender with respect to the Claim and that Molina agrees with
the Indemnity Estimate set forth in the Indemnity Notice, or (B) that Molina
does not agree that Bidder is entitled to indemnification pursuant to Section
8.1 of the Agreement to Tender with respect to the Claim or that Molina does not
agree with the Indemnity Estimate set forth in the Indemnity Notice. If (i)
Molina shall advise Bidder, in the Response Notice as provided in clause (A) of
this Section 4(a) or (ii) Molina fails to send to Bidder a Response Notice
within the fifteen (15) Business Day period described above, then no dispute
shall exist and the Escrow Agent shall, if so instructed by Bidder, deliver to
Bidder the Indemnity Estimate from the Escrow Amount. If, on the other hand,
Molina shall advise Bidder in the Response Notice as provided in clause (B)
above (specifying in reasonable detail Molina's disagreement), a dispute (the
"Dispute") shall be deemed to exist between Bidder and Molina.

      (b) Bidder and Molina shall endeavor in good faith to resolve the Dispute
by direct consultation and negotiation with each other. In the event Bidder and
Molina are unable to resolve the Dispute within ten (10) Business Days after
receipt of the Response Notice, the Dispute shall be finally settled by
arbitration in New York City under the international arbitration rules of the
American Arbitration Association ("AAA"), before a panel of three arbitrators
selected in accordance with said rules; provided however, that a Dispute arising
from a Third Party Claim shall not be submitted to arbitration until ten (10)
Business Days after such Third Party Claim has been reduced to a final judgment
not subject to further appeal or has otherwise been settled in accordance with
the procedures of Section 8 of the Agreement to Tender. The arbitral tribunal
and the AAA in administering the dispute shall also give effect to the Expedited
Procedures of the commercial arbitration rules of the AAA. The official language
of the arbitration shall be English. Each party shall bear the expenses of its
own counsel and witnesses. The costs of the arbitration proceeding shall be
borne by the non-prevailing party. The arbitral tribunal shall not have the
power to add to, modify or change any provisions of this Agreement. If the
arbitral tribunal determines the amount of Molina's indemnification obligation
with respect to the related Claim, the Escrow Agent shall, upon receipt from
Bidder of a copy of such determination and an instruction from Bidder to pay
Bidder the amount of such determination, pay to Bidder the amount of such
determination from the Escrow Amount.

      5. Rights, Duties and Immunities of the Escrow Agent.

      (a) Acceptance by the Escrow Agent of its duties under this Agreement is
subject to the following terms and conditions, which all parties to this
Agreement hereby agree shall govern and control the rights, duties and
immunities of the Escrow Agent:


                                       3

            (i) The duties and obligations of the Escrow Agent are purely
ministerial in nature and are determined solely by the express provisions of
this Agreement.

            (ii) The Escrow Agent shall not be responsible in any manner
whatsoever for any failure or inability of the parties to this Agreement, or of
anyone else, to honor any of the provisions of this Agreement.

            (iii) The parties hereto will reimburse and indemnify the Escrow
Agent for, and hold it harmless against, any loss, liability, damage or expense,
including but not limited to counsel fees and expenses arising out of or in
connection with its acceptance of, or the performance of its duties and
obligations under, this Agreement, except for losses, liabilities, damages and
expenses caused by the willful misconduct or gross negligence of the Escrow
Agent. In no event will the Escrow Agent be liable for any loss of asset value
or consequential, indirect or special damages. The obligations set forth in this
Section 5(a)(iii) shall survive the termination of this Agreement.

            (iv) The Escrow Agent may act in reliance upon any signature
believed by it to be genuine and may assume that any person who has been
designated by Bidder or Molina to give written instructions, notice of receipt
or make any statements in connection with the provisions hereof is authorized to
do so. The Escrow Agent shall have no duty to make inquiry as to the
genuineness, accuracy or validity of any statements or instruments or any
signatures on any statements or instructions. Bidder and Molina agree that, for
the purposes of this Agreement, the names and true signatures of each individual
authorized to act on behalf of each of them will be set forth on a separate
writing as drafted by the parties if either of them elects to have another
person or entity to act on their behalf. Subject to the provisions of this
Agreement, in the event that the Escrow Agent is uncertain as to its duties or
the manner in which any of its duties shall be performed, the Escrow Agent shall
notify Bidder and Molina, and the Escrow Agent need not take any action or
perform any act until the uncertainty is resolved to the satisfaction of the
Escrow Agent.

            (v) The Escrow Agent shall not be liable for any error of judgment,
or for any act done or step taken or omitted by it, or for anything which it may
do or refrain from doing in connection herewith, except its own fraud, willful
misconduct or gross negligence.

            (vi) The Escrow Agent may seek the advice of such legal counsel as
it deems necessary in the event of any dispute or question as to the
construction of any of the provisions of this Agreement or its duties hereunder,
and it shall incur no liability and shall be fully protected in respect of any
action taken, omitted or suffered by it in accordance with the opinion of such
counsel.

            (vii) The Escrow Agent makes no representation as to the validity,
value, genuineness or collectibility of any security, document or instrument
held by or delivered to it.


                                       4

      (b) If the Escrow Agent has any doubts as to whether or not it should
release all or any part of the Escrow Amount, the Escrow Agent may, at the
Escrow Agent's option, deposit such Escrow Amount with the clerk of the United
States District Court for the Southern District of New York or the Supreme Court
of the State of New York, County of New York upon commencement of an action in
the nature of an interpleader and the Escrow Agent shall thereupon be released
and discharged from any and all further obligations arising in connection with
this Agreement.

      (c) The parties agree that in the event that the Escrow Agent becomes
unable to perform its duties under this Agreement, Bidder and Molina, shall
jointly designate a new Escrow Agent to perform the obligations under this
Agreement.

      (d) If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects the Escrow Amount (including,
but not limited to, orders of attachment or garnishment or other forms of levies
or injunctions or stays relating to the Escrow Amount), the Escrow Agent shall
provide written notice thereof to Bidder and Molina within three Business Days
in accordance with the notice provisions in Section 7(f) of this Agreement.

      6. Termination; Distribution of Escrow Amount.

      (a) This Escrow Agreement shall terminate on the third year anniversary of
the Purchase Date; provided, however, that in the event that a Dispute(s) exists
on such date, this Agreement shall remain in effect until the resolution of such
Dispute(s). Notwithstanding anything to the contrary, this Agreement shall
terminate upon distribution of all of the property held in the Escrow Account
from the Escrow Account pursuant to the terms and conditions of this Agreement.

      (b) The Escrow Agent shall deliver to Molina, on every six-month
anniversary of the Purchase Date until the third year anniversary of the
Purchase Date (each such six month anniversary, a "Release Date"), an amount
equal to the lesser of (i) one sixth of the U.S. dollar equivalent of
Ps.141,150,000 calculated at the exchange rate set forth in Section 2.1 of the
Agreement to Tender or (ii) the excess, if any, of any remaining Escrow Amount
before giving effect to any amount to be released on such Release Date over the
aggregate Indemnity Estimate of all unpaid Claim(s) and of all Claim(s) that are
the subject of a Dispute(s) as of such date.

      (c) If, on the third year anniversary of the Purchase Date, there are no
unpaid Claim(s) or existing Dispute(s), the then remaining Escrow Amount shall
be promptly released to Molina, but in no event shall such release be made more
than five (5) Business Days after such third year anniversary. If an unpaid
Claim(s) or a Dispute(s) exists on the sixth Release Date, Section 6(b) hereof
shall continue to be applicable and the then remaining Escrow Amount shall be
held by the Escrow Agent until such Claim(s) is paid or Dispute(s) is resolved,
at which time the then remaining Escrow Amount shall be promptly released to
Molina, but in no event shall such release be made


                                       5

more than five (5) Business Days after the date on which all such Claim(s) is
paid or such Dispute(s) is resolved.

      (d) A Dispute shall be resolved upon the earlier of (i) an agreement, duly
executed between Bidder and Molina, specifying the resolution of such Dispute or
(ii) the entry of a final judgment not subject to further appeal by a court as
provided in Section 7(b) hereof.

      (e) Molina and the Bidder may remove the Escrow Agent at any time by
giving the Escrow Agent a thirty (30) calendar day prior written notice signed
by both Molina and the Bidder. The Escrow Agent may resign by giving Molina and
the Bidder a thirty (30) calendar day prior written notice thereof.

      7. Miscellaneous.

      (a) Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, and the rights to the parties shall be governed by,
the laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.

      (b) Forum. This Agreement shall be subject to the exclusive jurisdiction
of the Federal Courts for the Southern District of New York and State courts of
New York County in the State of New York. The parties irrevocably waive, to the
fullest extent permitted by law, any objection or immunities to jurisdiction
which they may now or hereafter have (including sovereign immunity, immunity to
pre-judgment attachment, post-judgment attachment and execution) to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, or any judgment entered by
any court in respect hereof brought in the State of New York, and further
irrevocably waive any claim that any suit, action or proceeding in the Borough
of Manhattan, New York has been brought in an inconvenient forum. For the
purpose of proceedings in the courts described in this Section 7(b), Molina
hereby irrevocably designates CT Corporation as his agent, and in the event that
such agent or any successor shall cease to represent him, Molina shall promptly
and irrevocably designate a successor and notify Bidder thereof, to accept on
his behalf service of any and all process or other documents which may be served
in any action or proceeding in any of such courts. Molina further agrees that
(i) service upon such agent shall constitute valid and effective service upon
Molina and that failure of such agent to give any notice of such service to
Molina shall not affect the validity of such service or any judgment rendered in
any action or proceeding based thereon and (ii) that service of any and all such
process or other documents of Molina may also be effected by registered mail to
his address as set forth in Section 7(f) hereof.

      (c) Remedies Cumulative; No Third Party Beneficiaries. The rights and
remedies of the parties to this Agreement are cumulative and not alternative.
Neither any failure nor any delay by any party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further


                                       6

exercise of such right, power or privilege or the exercise of any other right,
power or privilege. Nothing in this Agreement shall convey any rights upon any
person or entity that is not a party to this Agreement.

      (d) Entire Agreement. This Agreement and the Agreement to Tender
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof. This Agreement supersedes all prior
agreements and understandings, written or oral, between the parties with respect
to such subject matter.

      (e) Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

      (f) Notices. Any and all notices or other communications or deliveries
required or permitted to be given under any of the provisions of this Agreement
shall be in writing and shall be deemed to have been duly given (i) five days
after the mailing thereof by registered mail, return receipt requested, (ii) on
the day following mailing when sent by overnight express mail or courier,
signature required, and (iii) at the actual time of receipt when delivered
personally, addressed to Molina, Bidder or the Escrow Agent at the addresses set
forth below (or at such other address as any party may specify by notice to the
other parties hereto given as aforesaid):

      If to Molina, to:

      Campos Eliseos No. 345
      Col. Polanco
      11550 Mexico, D.F., Mexico
      Phone: (011-5255) 5280-8111
      Fax:  (011-5255) 5280-5116

      With a copy to:

      Fried, Frank, Harris, Shriver & Jacobson
      One New York Plaza,
      New York, NY 10004
      Attn: Lee S. Parks, Esq.
      Phone: (212) 859-8000
      Fax: (212) 859-4000

      If to Bidder, to:

      c/o The Pepsi Bottling Group
      1 Pepsi Way
      Somers, NY 10589


                                       7

      Attn: Senior Deputy General Counsel
      Phone: (914) 767-7971
      Fax: (914) 767-7944

      With a copy to:

      Proskauer Rose LLP
      1585 Broadway
      New York, NY 10036
      Attn:  Carlos E. Martinez, Esq.
      Phone: (212) 969-3000
      Fax: (212) 969-2900

      If to the Escrow Agent, to:

      The Bank of New York
      Insurance/Escrow Unit, 8th Floor West
      101 Barclay Street
      New York, New York 10286
      Attn: Carlos R. Luciano, Assistant Vice President
      Phone: (212) 815-3195
      Fax: (212) 815-5877

      (g) Amendment. This Agreement may not be amended except by a written
instrument signed by each party hereto.

      (h) Escrow Agent Fees. The fees of the Escrow Agent for acting as such
under this Agreement shall be paid by Bidder.

      (i) Binding Effect; No Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement and each party's rights hereunder may not be
assigned without the prior written consent of the other parties hereto, except
that Bidder may assign, in whole or in part, its rights hereunder to one or more
of its Affiliates; provided that, Bidder has given Molina prior written notice
of any such assignment.

      (j) Counterparts; Headings. This Agreement may be executed in two
counterparts, each of which shall be an original, but which together shall
constitute one and the same instrument. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.


                                       8

IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be
executed as of the date first written above.

                              PBG GRUPO EMBOTELLADOR
                              HISPANO-MEXICANO, S.L.


                              By: /s/ Inigo Madariaga
                                  _______________________
                              Name: Inigo Madariaga
                              Title: Managing Director


                              BOTTLING GROUP, LLC

                              By: /s/ Alfred H. Drewes
                                  _______________________
                              Name: Alfred H. Drewes
                              Title: Principal Financial Officer

                              /s/ Enrique C. Molina Sobrino
                              --------------------------
                              ENRIQUE C. MOLINA SOBRINO


                              THE BANK OF NEW YORK, as Escrow Agent


                              By: /s/ Carlos R. Luciano
                                 _______________________
                              Name: Carlos R. Luciano
                              Title: Assistant Vice President


                                       9