PEPSI COLA PUERTO RICO BOTTLING CO, DEF 14A, 1999-09-07

PEPSI COLA PUERTO RICO BOTTLING CO
DEF 14A, 1999-09-07
BOTTLED & CANNED SOFT DRINKS & CARBONATED WATERS

Previous: PROFESSIONAL VETERINARY PRODUCTS LTD /MO/, S-1, 1999-09-07

Next: SMART CHOICE AUTOMOTIVE GROUP INC, SC 13G, 1999-09-07

<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

PEPSI-COLA PUERTO RICO BOTTLING COMPANY

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ ] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):

4) Proposed maximum aggregate value of transaction: 5) Total fee paid:

[X] Fee paid previously with preliminary materials: $69,951

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:
3) Filing Party:

4) Date Filed:
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY
(to be renamed PepsiAmericas, Inc.)
Carretera 865, Km. 0.4
Barrio Candelaria Arenas
Toa Baja, Puerto Rico 00949

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

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON OCTOBER 1, 1999

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

TO THE SHAREHOLDERS OF PEPSI-COLA PUERTO RICO BOTTLING COMPANY:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Pepsi-Cola
Puerto Rico Bottling Company ("PPR") will be held at the Marquette Hotel, 710
Marquette Avenue, Minneapolis, Minnesota, on Friday, October 1, 1999, at 9:30
a.m. local time for the following purposes:

1. To approve the issuance of 65,070,006 shares of PPR Class B Common Stock
in connection with the proposed acquisition of Delta Beverage Group,
Inc. and Dakota Beverage Company, Inc. pursuant to exchange agreements,
effective June 28, 1999.

2. To approve an amendment to PPR's Certificate of Incorporation to
increase the number of authorized shares of PPR capital stock to
150,000,000 from 40,000,000 and to increase the number of authorized
shares of PPR Class B Common Stock to 145,000,000 from 35,000,000.

3. To approve an amendment to PPR's Certificate of Incorporation to change
PPR's name to PepsiAmericas, Inc.

4. To approve PPR's 1999 Stock Option Plan.

The close of business on September 7, 1999 has been fixed as the record date
for the determination of all PPR shareholders entitled to receive notice of
the Special Meeting and to vote at the Special Meeting or any adjournment or
postponement thereof.

Please sign, date and return the enclosed proxy promptly in the enclosed
addressed envelope, even if you plan to attend the Special Meeting. If you
attend the Special Meeting and vote in person, the proxy will not be used.

BY ORDER OF THE BOARD OF DIRECTORS

Brian D. Wenger
Secretary

September 9, 1999

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION............................................................... 1
General.................................................................. 1
Record Date.............................................................. 2
Outstanding Common Stock................................................. 2
Voting and Solicitation.................................................. 2
Revocability of Proxies.................................................. 2
Quorum; Abstentions; Broker Non-Votes.................................... 3
QUESTIONS AND ANSWERS...................................................... 4
SUMMARY.................................................................... 6
Pepsi-Cola Puerto Rico Bottling Company.................................. 6
Delta Beverage Group, Inc. .............................................. 6
Dakota Beverage Company, Inc. ........................................... 6
The Acquisitions......................................................... 7
Record Date and Votes Required to Approve the Proposals.................. 10
Indemnification Letter................................................... 10
Voting Agreement......................................................... 10
Opinion and Analysis of Financial Advisor to the Special Committee....... 10
Conditions to the Acquisitions........................................... 10
Accounting Treatment..................................................... 11
Material Federal Income Tax Consequences................................. 11
Markets and Market Prices................................................ 11
Interests of Certain Persons............................................. 11
Franchise Agreements..................................................... 11
Summary Historical and Pro Forma Combined Financial and Operating Data... 13
FORWARD-LOOKING STATEMENTS................................................. 14
SECURITY OWNERSHIP......................................................... 15
MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS.................... 18
SELECTED HISTORICAL FINANCIAL AND OPERATING DATA........................... 19
Pepsi-Cola Puerto Rico Bottling Company.................................. 20
Delta Beverage Group, Inc. .............................................. 21
Dakota Beverage Company, Inc. ........................................... 22
HISTORICAL AND PRO FORMA PER SHARE DATA.................................... 23
PRO FORMA COMBINED FINANCIAL AND OPERATING DATA............................ 24
APPROVAL OF THE ACQUISITIONS............................................... 31
Reasons for the Acquisitions............................................. 31
Background to the Acquisitions........................................... 31
Approval and Recommendation of PPR's Board of Directors.................. 35
Opinion and Analysis of Financial Advisor to PPR......................... 35
Closing.................................................................. 39
Dissenters' Rights....................................................... 39
Certain Federal Income Tax Consequences.................................. 39
Accounting Treatment..................................................... 39
Interests of Certain Persons in the Acquisitions......................... 40
THE DELTA EXCHANGE AGREEMENT............................................... 42
The Agreement............................................................ 42
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
Representations and Warranties......................................... 42
Conduct of Business Pending the Exchange............................... 43
Conditions Precedent to the Exchange................................... 45
Additional Agreements Provided in the Agreement........................ 46
Termination of the Agreement........................................... 48
Amendment of the Agreement............................................. 49
Waiver under the Agreement............................................. 49
Survival and Indemnification under the Agreement....................... 49
THE DAKOTA EXCHANGE AGREEMENT............................................ 50
The Agreement.......................................................... 50
Representations and Warranties......................................... 50
Conduct of Business Pending the Exchange............................... 51
Conditions Precedent to the Exchange................................... 53
Additional Agreements Provided in the Agreement........................ 54
Termination of the Agreement........................................... 56
Amendment of the Agreement............................................. 56
Waiver under the Agreement............................................. 56
Survival and Indemnification under the Agreement....................... 57
THE FRANCHISE AGREEMENTS................................................. 58
New Agreements with PepsiCo............................................ 58
Other Bottling Agreements.............................................. 61
THE CREDIT FACILITIES.................................................... 61
Borrowers and Guarantors............................................... 62
Credit Facilities...................................................... 62
Purpose................................................................ 62
Interest Rates and Commitment Fee...................................... 62
Security............................................................... 63
Mandatory and Optional Prepayments..................................... 63
Conditions Precedent to Closing........................................ 63
Representations, Warranties and Covenants.............................. 64
Financial Covenants.................................................... 64
Events of Default...................................................... 64
THE COMPANIES............................................................ 65
PEPSI-COLA PUERTO RICO BOTTLING COMPANY................................ 65
Business............................................................. 65
Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 65
Quantitative and Qualitative Disclosures About Market Risk........... 75
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................ 75
DELTA BEVERAGE GROUP, INC.............................................. 76
Business............................................................. 76
Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 77
Quantitative and Qualitative Disclosures About Market Risk........... 84
DAKOTA BEVERAGE COMPANY, INC........................................... 85
Business............................................................. 85
Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 85
Quantitative and Qualitative Disclosures About Market Risk........... 91
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................... 92
Interests in the Acquisitions.......................................... 92
</TABLE>

ii
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
Change in Control...................................................... 92
Shareholders' Agreement................................................ 92
Franchise Arrangements................................................. 92
PPR Management Agreement............................................... 93
Accounting Services Agreement.......................................... 94
Delta Management Agreement............................................. 94
Dakota Management Agreement............................................ 95
Other Business Relationships........................................... 96
Controlling Shareholder................................................ 96
APPROVAL OF AMENDMENT TO PPR'S CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK........................ 96
APPROVAL OF AMENDMENT TO PPR'S CERTIFICATE OF INCORPORATION TO CHANGE
PPR'S NAME TO PEPSIAMERICAS, INC........................................ 97
ADOPTION OF 1999 STOCK OPTION PLAN....................................... 98
General................................................................ 98
Description of the Plan................................................ 98
Tax Information........................................................ 99
New Plan Benefits...................................................... 100
Vote Required.......................................................... 100
EXECUTIVE COMPENSATION................................................... 101
Summary Compensation Table............................................. 101
Option Grants for the Fiscal Year Ended December 31, 1998.............. 102
Aggregated Option Exercises in Fiscal Year Ended December 31, 1998 and
Fiscal Year-End Option Values......................................... 102
Employment Agreement................................................... 102
Stock Option Plans..................................................... 102
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING........................ 103
INDEPENDENT PUBLIC ACCOUNTANTS........................................... 103
EXPERTS.................................................................. 103
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA...................... F-1
APPENDIX A -- DELTA EXCHANGE AGREEMENT................................... A-1
APPENDIX B -- DAKOTA EXCHANGE AGREEMENT.................................. B-1
APPENDIX C -- FAIRNESS OPINION OF BEAR, STEARNS & CO. INC................ C-1
APPENDIX D -- PPR'S 1999 STOCK OPTION PLAN............................... D-1
</TABLE>

PPR has supplied all information contained in this document relating to PPR,
Delta has supplied all such information relating to Delta, and Dakota has
supplied all such information relating to Dakota.

iii
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY
(to be renamed PepsiAmericas, Inc.)
Carretera 865, Km. 0.4.
Barrio Candelaria Arenas
Toa Baja, Puerto Rico 00949

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

PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 1, 1999

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

INTRODUCTION

General

This document is being mailed to shareholders of Pepsi-Cola Puerto Rico
Bottling Company ("PPR") on or about September 9, 1999 in connection with the
solicitation by PPR's Board of Directors of proxies for use at a Special
Meeting of Shareholders of PPR (the "Special Meeting") to be held at the
Marquette Hotel, 710 Marquette Avenue, Minneapolis, Minnesota, on Friday,
October 1, 1999, at 9:30 a.m. local time. The Special Meeting has been called
for the following purposes:

3. To approve an amendment to PPR's Certificate of Incorporation to change
PPR's name to PepsiAmericas, Inc.

4. To approve PPR's 1999 Stock Option Plan.

PPR has entered into exchange agreements with the shareholders of Delta
Beverage Group, Inc. ("Delta") and Dakota Beverage Company, Inc. ("Dakota")
that would result in Delta and Dakota becoming subsidiaries of PPR. If
approved by PPR's shareholders, PPR will issue 65,070,006 shares of PPR Class
B Common Stock in exchange for all of the outstanding common stock of Delta
and Dakota. The shareholders of Delta and Dakota have already agreed to
exchange their various common equity interests for PPR Class B Common Stock,
subject to the satisfaction of various conditions as described in this
document.

The acquisitions cannot be completed unless approved by PPR's shareholders.
PPR's Board of Directors has scheduled the Special Meeting to vote on the
acquisitions. This document gives you detailed information about the proposed
acquisitions.

PPR's Board of Directors has, upon the recommendation of a special committee
consisting of its independent directors (the "Special Committee"), determined
that the acquisitions of Delta and Dakota through the issuance of PPR Class B
Common Stock under the exchange agreements is fair to, advisable and in the
best interests of PPR's shareholders. PPR's Board of Directors has also
approved the amendment to PPR's Certificate of Incorporation to increase the
number of authorized shares of capital stock, the amendment to PPR's
Certificate of Incorporation to change PPR's name to PepsiAmericas, Inc. and
the adoption of PPR's 1999 Stock Option Plan. PPR's Board of Directors
recommends a vote "FOR" approval of each proposal.

1
<PAGE>

Record Date

PPR's Board of Directors has fixed the close of business on September 7,
1999 as the record date for determining the holders of PPR common stock
entitled to notice of, and to vote at, the Special Meeting. Only holders of
PPR common stock at the close of business on the record date will be entitled
to notice of, and to vote at, the Special Meeting.

Outstanding Common Stock

The voting securities of PPR outstanding on the record date consisted of
5,000,000 shares of PPR Class A Common Stock, entitling the holders thereof to
six votes per share, and 16,690,000 shares of PPR Class B Common Stock,
entitling the holders thereof to one vote per share. PPR had no other class of
voting securities outstanding on the record date.

Voting and Solicitation

The enclosed proxy is being solicited by PPR's Board of Directors to provide
each shareholder with an opportunity to vote, whether or not the shareholder
attends in person. Shares cannot be voted at the Special Meeting unless the
owner of record is present to vote or is represented by a proxy executed in
writing by the shareholder or the shareholder's duly authorized attorney-in-
fact. Holders of PPR common stock will vote as a single class on all matters
submitted to a vote of shareholders at the Special Meeting, except that the
proposal to amend PPR's Certificate of Incorporation to increase the number of
authorized shares of PPR capital stock will also be voted upon separately by
the holders of PPR Class B Common Stock. Approval of all matters at the
Special Meeting requires the affirmative vote of the majority of the shares
present in person or represented by proxy at the Special Meeting and entitled
to vote.

Approval of the acquisitions does not require the vote of Delta's
shareholders or Dakota's shareholders. Each Delta shareholder has entered into
an exchange agreement relating to the acquisition of Delta (the "Delta
Exchange Agreement") and has consented to the acquisition described therein
and each Dakota shareholder has entered into an exchange agreement relating to
the acquisition of Dakota (the "Dakota Exchange Agreement") and has consented
to the acquisition described therein.

PPR will pay all expenses incurred in connection with this solicitation,
including the cost of preparing, assembling, and mailing this proxy soliciting
material. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by the directors, officers and
regular employees of PPR. Such persons will receive no additional compensation
for such services. Further, PPR has retained Georgeson Shareholder
Communications Inc. to assist it in connection with the solicitation of
proxies, which may be by mail, telephone or personal solicitation. In
connection therewith, PPR will pay fees and expenses estimated at $12,500.
Arrangements will also be made with certain brokerage firms and certain other
custodians, nominees and fiduciaries for the forwarding of solicitation
materials to the beneficial owners of PPR common stock held of record by such
persons, and such brokers, custodians, nominees and fiduciaries will be
reimbursed for their reasonable out-of-pocket expenses incurred by them in
connection therewith.

Revocability of Proxies

Any shareholder who executes and returns a proxy may revoke it at any time
before it is voted. Any shareholder who wishes to revoke a proxy can do so by
(a) executing a later-dated proxy relating to the same shares and delivering
it to the secretary of PPR prior to the vote at the Special Meeting, (b)
filing a written notice of revocation bearing a later date than the proxy with
the secretary of PPR prior to the vote at the Special Meeting, or (c)
appearing in person at the Special Meeting, filing a written notice of
revocation and voting in person the shares to which the proxy relates. Any
written notice or subsequent proxy should be delivered to Pepsi-Cola Puerto
Rico Bottling Company, Carretera 865, Km. 0.4, Barrio Candelaria Arenas, Toa
Baja, Puerto Rico 00949, Attention: Corporate Secretary, or hand-delivered to
the inspector of election at the Special Meeting, prior to the vote.

2
<PAGE>

Quorum; Abstentions; Broker Non-Votes

A majority of the shares entitled to vote must be present in person or by
proxy to constitute a quorum at the Special Meeting. A quorum must be present
at the Special Meeting for any shareholder action to be effective. After a
quorum has been established, a withdrawal of shareholders that reduces the
number of shareholders entitled to vote at the Special Meeting below the
number required for a quorum does not affect the validity of an adjournment of
the Special Meeting or any action taken at the Special Meeting prior to the
shareholders' withdrawal. Shares that are not present at the Special Meeting,
either in person or by proxy, cannot count towards a quorum. Also, shares are
not considered present for quorum purposes if a shareholder attends the
Special Meeting only to protest the legality of the Special Meeting. Treasury
shares, shares of PPR common stock owned by another corporation the majority
of the voting stock of which is owned or controlled by PPR, and shares of PPR
common stock that it holds in a fiduciary capacity may not be voted, directly
or indirectly, at any meeting, and will not be counted in determining the
total number of outstanding shares at any time. All votes will be tabulated by
the inspector of election for the Special Meeting, who will separately
tabulate affirmative and negative votes, abstentions and broker non-votes.

If a properly executed proxy is returned and the shareholder has abstained
from voting on any matter, the shares represented by such proxy will be
considered present at the Special Meeting for purposes of determining a quorum
and for purposes of calculating the vote, but will not be considered to have
been voted in favor of such matter.

If a properly executed proxy is returned by a broker holding shares in
street name which indicates that the broker does not have discretionary
authority as to certain shares to vote on one or more matters, such shares
will be considered present at the Special Meeting for purposes of determining
a quorum, but will not be considered to be represented at the Special Meeting
for purposes of calculating the vote with respect to such matter. Under the
rules of the NYSE, brokers who hold shares in street name for customers will
have the authority to vote on the matters before the Special Meeting only if
they have transmitted these proxy soliciting materials to the beneficial owner
of the shares and have received voting instructions from the beneficial
owners.

3
<PAGE>

QUESTIONS AND ANSWERS

Q. Why is PPR acquiring Delta and Dakota?

A. PPR believes the acquisitions will provide significant benefits to its
shareholders. The companies are currently independent bottlers and
distributors of primarily PepsiCo products. Combined, they are expected to
become one of the anchor bottlers of PepsiCo, Inc. As a larger entity, PPR
believes it will have enhanced operating efficiencies, improved access to
capital and increased buying power. PPR also expects to manufacture,
distribute and market PepsiCo products in exclusive franchise territories
that include Puerto Rico and portions of nine states. Based on these
assumptions, PPR's revenues would have been approximately 440% greater than
existing PPR on a pro forma basis for the fiscal year ended December 31,
1998. To review the background and reasons for the acquisitions in greater
detail, see pages 31 through 35.

Q. What am I being asked to vote on?

A. PPR shareholders are being asked to approve the following proposals at the
Special Meeting:

. The issuance of 65,070,006 shares of PPR Class B Common Stock to Delta
and Dakota shareholders pursuant to the exchange agreements. NYSE rules
require PPR to obtain such approval.

. An amendment to PPR's Certificate of Incorporation to increase the
number of authorized shares of PPR capital stock to 150,000,000 from
40,000,000 and to increase the number of authorized shares of PPR Class
B Common Stock to 145,000,000 from 35,000,000.

. An amendment to PPR's Certificate of Incorporation to change PPR's name
to PepsiAmericas, Inc.

. The adoption of PPR's 1999 Stock Option Plan.

Q. Who will receive PPR stock in the acquisitions?

A. PPR shareholders will not receive additional PPR common stock, but will be
shareholders of a substantially larger company as a result of the
acquisitions. Delta shareholders will receive 18,310,006 shares of PPR
Class B Common Stock in exchange for all the Delta common stock and Dakota
shareholders will receive 46,760,000 shares of PPR Class B Common Stock in
exchange for all the Dakota stock. PPR has agreed to register for resale
the shares of PPR Class B Common Stock to be issued under the exchange
agreements within 180 days of the completion of the acquisitions.

Q. When do you expect the acquisitions to be completed?

A. PPR is seeking to complete the acquisitions by the end of October 1999.

Q. Will the acquisitions result in a change in control of PPR?

A. No. Pohlad Companies currently holds a 33.1% economic interest in PPR and
52.8% voting power over PPR. Pohlad Companies also currently has voting
control over Dakota and Delta. Following the acquisitions, based on the
number of shares of PPR common stock outstanding on August 31, 1999, Pohlad
Companies will hold 46.6% economic interest in PPR and 51.9% voting power
over PPR.

Q. What are the tax consequences of the acquisitions for PPR shareholders?

A. None. The acquisitions will not result in a taxable event for PPR
shareholders. To review the tax consequences in greater detail, see page
39.

Q. Will shareholders have dissenters' or appraisal rights?

A. No. Neither PPR, Delta nor Dakota shareholders will have any dissenters' or
appraisal rights.

Q. Why is PPR changing its name?

A. Following the acquisitions, PPR will operate within a broader geographic
scope. PPR believes that changing its name to PepsiAmericas, Inc. will more
accurately reflect its increased scope of operations.

4
<PAGE>

Q. What do I need to do now?

A. After you have reviewed this document, indicate on your proxy card how you
want to vote, sign it and mail it in the enclosed return envelope as soon
as possible, so that your shares will be represented at the Special
Meeting.

Q. Can I change my vote?

Yes. The Special Meeting will take place on Friday, October 1, 1999, at
9:30 a.m. local time, at the Marquette Hotel, 710 Marquette Avenue,
Minneapolis, Minnesota. You may attend the Special Meeting and vote your
shares in person, rather than signing and mailing your proxy card. In
addition, you may withdraw your proxy and change your vote any time before
the vote is taken at the Special Meeting by following the directions on
page 2.

Q. If my shares are held in "street name" by my broker, will my broker vote my
shares for me?

A. No. Your broker will vote your shares only if you provide instructions on
how to vote. Without instructions, your shares will not be voted by your
broker.

Q. Do I need to send in my stock certificates?

A. No. You should retain your stock certificates because the acquisitions will
not require you to surrender them at any time. The acquisitions will not
change the number of PPR shares you hold; however, your percentage interest
in PPR will decrease as a result of the acquisitions.

Q. Who do I contact with questions?

A. If you have questions about the acquisitions, you may call Mr. John F.
Bierbaum, Chief Financial Officer of PPR, at (612) 661-3830.

5
<PAGE>

SUMMARY

This document is being furnished to shareholders of PPR in connection with
the solicitation of proxies by and on behalf of PPR's Board of Directors for
use at the Special Meeting. The Special Meeting will be held at the Marquette
Hotel, 710 Marquette Avenue, Minneapolis, Minnesota, on Friday, October 1,
1999, at 9:30 a.m. local time. This document and the related proxy card are
first being mailed to PPR's shareholders on or about September 9, 1999.

This summary highlights selected information from this document and may not
contain all of the information that is important to you. To better understand
the acquisitions, and for a more complete understanding of the legal terms of
the acquisitions, you should read this entire document carefully.

Pepsi-Cola Puerto Rico Bottling Company (see pages 65 through 76)

PPR is a holding company which, through its manufacturing and distribution
subsidiaries, produces, sells and distributes a variety of soft drink and
fruit juice products in the Commonwealth of Puerto Rico, pursuant to exclusive
franchise arrangements with PepsiCo and other soft drink franchisors. PPR also
has rights to sell PepsiCo products to distributors in the U.S. Virgin
Islands. PPR produces, sells and distributes soft drink products primarily
under the Pepsi-Cola, Slice, Wonder Kola, Teem and Mountain Dew trademarks
pursuant to exclusive franchise arrangements with PepsiCo. PPR also produces,
sells and distributes tonic water, club soda and ginger ale under the Seagram
trademark through an exclusive arrangement with Joseph E. Seagram & Sons, Inc.
and sells and distributes fruit juice products under the Welch's trademark. In
addition, PPR recently acquired the right to produce, sell and distribute 7UP,
Sunkist, Welch's and Schweppes soft drink brands in Puerto Rico. PPR Class B
Common Stock trades on the NYSE under the symbol "PPO." PPR's executive
offices are located at Carretera 865, Km. 0.4, Barrio Candelaria Arenas, Toa
Baja, Puerto Rico 00949. Pohlad Companies currently holds a 33.1% economic
interest in PPR and 52.8% voting power over PPR.

Delta Beverage Group, Inc. (see pages 76 through 84)

Delta is one of the largest soft drink manufacturers and distributors in the
U.S., selling over 27.9 million hard cases of PepsiCo products and 7.3 million
hard cases of other soft drinks in 1998. Delta is the fifth largest
independent PepsiCo bottler in the U.S. Delta's exclusive franchise
territories cover portions of Arkansas, Louisiana, Mississippi, Tennessee and
Texas and include the cities of Baton Rouge, Little Rock, Memphis, New
Orleans, Shreveport and Tupelo. Delta has the exclusive right within its
territories to manufacture or distribute the following families of products:
Pepsi-Cola, Mountain Dew, 7UP, Slice, Ocean Spray, Lipton, Squirt, Country
Time, Canada Dry, Crush, Hawaiian Punch, Mug, All Sport, Yoo-Hoo, Crystal
Light and various other product offerings. In addition, Delta is the largest
distributor of Miller beer products in the state of Louisiana and has the
exclusive right to distribute Miller and Heineken USA Incorporated beer
products in greater New Orleans, Louisiana. Delta's executive offices are
located at 2221 Democrat Road, Memphis, Tennessee 38132. Pohlad Companies
currently holds 59.3% of Delta's voting common stock.

Dakota Beverage Company, Inc. (see pages 85 through 91)

Dakota, a wholly owned subsidiary of Pohlad Companies, is a bottler and
distributor of soft drinks under exclusive franchise agreements with PepsiCo
and Cadbury Schweppes plc. Dakota has the exclusive right within its
territories to manufacture or distribute the following families of products:
Pepsi-Cola, Mountain Dew, 7UP, Dr Pepper, Slice, Ocean Spray, Lipton, Squirt,
Country Time, Canada Dry, Crush, Hawaiian Punch, Mug, All Sport, Yoo-Hoo,
Crystal Light and various other product offerings. Dakota's territories cover
portions of North Dakota, South Dakota, Minnesota and Iowa and include the
cities of Bismarck, Fargo, Grand Forks and Sioux Falls. Dakota sold over 9.2
million hard cases of PepsiCo products and 2.5 million hard cases of other
soft drinks in 1998. Dakota's executive offices are located at 901--40th
Street SW, P.O. Box 9979, Fargo, North Dakota 58106. Pohlad Companies owns
100% of Dakota's stock.

6
<PAGE>

The Acquisitions (see pages 31 through 41)

PPR will issue 18,310,006 shares of PPR Class B Common Stock to the
shareholders of Delta and 46,760,000 shares of PPR Class B Common Stock to the
shareholders of Dakota. In the aggregate, these shares will constitute
approximately 79.6% of the PPR Class B Common Stock outstanding immediately
after the acquisitions, based on the number of shares outstanding on August
31, 1999.

The principal legal documents governing the acquisitions are the Delta
Exchange Agreement and the Dakota Exchange Agreement, which are attached as
Appendix A and Appendix B to this document.

The structure of the acquisitions contemplated by the Delta Exchange
Agreement and the Dakota Exchange Agreement may be summarized as follows:

. Pohlad Companies will form a wholly owned subsidiary, DakBev, LLC, with
seven wholly owned limited liability companies. Dakota will merge into
DakBev and Dakota's wholly owned subsidiaries will merge into DakBev's
subsidiary limited liability companies (collectively these transactions
are referred to as the "DakBev Merger").

. Beverages, Foods & Service Industries, Inc. ("BFSI") and Pepsi-Cola
Metropolitan Bottling Company, Inc. ("Metropolitan), both wholly owned
subsidiaries of PepsiCo, and Pohlad Companies will form and be the sole
members of Dakota, LLC. Pohlad Companies will contribute all of its
membership interests in DakBev (the "DakBev Membership Units"), its
interest in P-PR Transfer, LLP and its Delta common stock to Dakota,
LLC. Metropolitan will contribute shares of capital stock of PepsiCo
and, subject to its rights and obligations under the Delta Exchange
Agreement, Delta common stock to Dakota, LLC in exchange for a
membership interest therein. Simultaneously, BFSI will contribute its
interest in P-PR Transfer, LLP to Dakota, LLC in exchange for a
membership interest therein.

. Simultaneously with, and as a condition to, the exchange of PPR Class B
Common Stock for all of the DakBev Membership Units, PPR will acquire
all of the issued and outstanding shares of Delta in exchange for
18,310,006 shares of PPR Class B Common Stock. As a result, Delta will
become a subsidiary of PPR.

. PPR will issue 46,760,000 shares of PPR Class B Common Stock to Dakota,
LLC in exchange for all of the DakBev Membership Units. As a result,
DakBev will become a wholly owned subsidiary of PPR.

The following diagrams show the present ownership of PPR, Delta and Dakota,
and the ownership of these companies after the proposed acquisitions are
completed. The tables following the diagrams show ownership as a percentage of
shares outstanding as of August 31, 1999 and as if the acquisitions occurred
on August 31, 1999.

7
<PAGE>

Before Acquisitions
-------------------

Pohlad Companies
\
\
PepsiCo, Inc. P-PR Transfer, LLP
(through Beverages, Foods / \
& Service Industries, Inc.) / \
\
V. Suarez & Co., Inc. - - - PPR
/
/
Other Shareholders /

Pohlad Companies \
\
\
\
\
PepsiCo, Inc. - - - - - - Delta
(through Pepsi-Cola /
Metropolitan /
Bottling Co., Inc.) /
/
Other Shareholders /

Pohlad Companies - - - - - - Dakota

After Acquisitions
------------------

<S> <C> <C> <C> <C>
PepsiCo, Inc.
(through Pepsi-Cola
Metropolitan
Bottling Co., Inc. and
Pohlad Beverages, Foods &
Companies Service Industries, Inc.)
\ /
\ /
\ / Former Delta Shareholders
V. Suares & Co., (other than Pohlad Companies Other
Dakota, LLC Inc. and PepsiCo, Inc.) Shareholders
\ \ / /
\ \ / /
\ \ / /
/
PPR
/ \ Delta Preferred Shareholders
/ \ /
/ \ /
Dakota \ /
(reorganized as \ /
DakBev, LLC) Delta /

</TABLE>

<PAGE>

PPR Beneficial Ownership Before the Transaction

<TABLE>
<CAPTION>
Ownership (Shares in Thousands)(Excludes derivative
securities listed below) (1)
--------------------------------------------------------------
Economic Voting Control
Class A Class B Ownership (2)
-------------- -------------- -------------- -----------------
Shares Percent Shares Percent Shares Percent Votes Percent
------ ------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pohlad Companies.......................................... 3,200 64.0% 3,975 23.8% 7,175 33.1% 24,675(3) 52.8%
PepsiCo................................................... 800 16.0% 994 6.0% 1,794 8.3% 5,794 12.4%
V. Suarez & Co............................................ 1,000 20.0% 1,292 7.7% 2,292 10.6% 5,792(3) 12.4%
Shapiro Capital Management Company........................ 0 0.0% 3,391 20.3% 3,391 15.6% 3,391 7.3%
Other PPR Holders......................................... 0 0.0% 7,038 42.2% 7,038 32.4% 7,038 15.1%
----- ----- ------ ----- ------ ----- ------ -----
Total..................................................... 5,000 100.0% 16,690 100.0% 21,690 100.0% 46,690 100.0%
===== ===== ====== ===== ====== ===== ====== =====
</TABLE>
- --------
(1) Pohlad Companies beneficially owns 1,088 shares of PPR Class B Common Stock
issuable pursuant to presently exercisable warrants. PepsiCo beneficially
owns 272 shares of PPR Class B Common Stock issuable pursuant to presently
exercisable warrants. V. Suarez & Co. beneficially owns 340 shares of PPR
Class B Common Stock issuable pursuant to presently exercisable warrants.
(2) PPR Class A Common Stock entitles the holder to six votes per share.
(3) Accounts for 250 shares of PPR Class A Common Stock held directly by V.
Suarez & Co. over which Pohlad Companies has voting control.

PPR Beneficial Ownership After the Transaction

<TABLE>
<CAPTION>
Ownership (Shares in Thousands)(Excludes derivative
securities listed below) (1)
----------------------------------------------------------------
Economic Voting Control
Class A Class B Ownership (2)
-------------- --------------- -------------- ------------------
Shares Percent Shares Percent Shares Percent Votes Percent
------ ------- ------- ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pohlad Companies......................................... 3,200 64.0% 37,255 45.6% 40,455 46.6% 57,955(3) 51.9%
PepsiCo.................................................. 800 16.0% 19,824 24.2% 20,624 23.8% 24,624 22.0%
V. Suarez & Co........................................... 1,000 20.0% 1,292 1.6% 2,292 2.6% 5,792(3) 5.2%
Shapiro Capital Management Company....................... 0 0.0% 3,391 4.1% 3,391 3.9% 3,391 3.0%
Other PPR Holders........................................ 0 0.0% 19,9988 24.5% 19,998 23.1% 19,998 17.9%
----- ----- ------- ----- ------ ----- ------- -----
Total.................................................... 5,000 100.0% 81,760 100.0% 86,760 100.0% 111,760 100.0%
===== ===== ======= ===== ====== ===== ======= =====
</TABLE>
- --------
(1) Pohlad Companies beneficially owns 1,088 shares of PPR Class B Common Stock
issuable pursuant to presently exercisable warrants. PepsiCo beneficially
owns 272 shares of PPR Class B Common Stock issuable pursuant to presently
exercisable warrants. V. Suarez & Co. beneficially owns 340 shares of PPR
Class B Common Stock issuable pursuant to presently exercisable warrants.
(2) PPR Class A Common Stock entitles the holder to six votes per share.
(3) Accounts for 250 shares of PPR Class A Common Stock held directly by V.
Suarez & Co. over which Pohlad Companies has voting control.

9
<PAGE>

Record Date and Votes Required to Approve the Proposals (see page 2)

All persons who owned PPR common stock as of the close of business on
September 7, 1999, are entitled to notice of, and to vote at, the Special
Meeting.

On the record date, there were 5,000,000 shares of PPR Class A Common Stock
outstanding and 16,690,000 shares of PPR Class B Common Stock outstanding.
Holders of PPR common stock will vote as a single class on all matters
submitted to a vote of shareholders at the Special Meeting, except that the
proposal to amend PPR's Certificate of Incorporation to increase the number of
authorized shares of PPR capital stock will also be voted upon separately by
the holders of PPR Class B Common Stock. Approval of all matters at the
Special Meeting requires the affirmative vote of the majority of the shares
present in person or represented by proxy at the Special Meeting and entitled
to vote.

Indemnification Letter (see page 35)

PPR has agreed to maintain, until the sixth anniversary of the acquisitions,
a directors, officers and company liability policy.

Voting Agreement (see page 35)

P-PR Transfer, LLP, through which Pohlad Companies and PepsiCo own a
majority of the voting power of the PPR common stock, has entered into a
voting agreement with PPR. Under the terms of the voting agreement, P-PR
Transfer, LLP is required to vote its shares of PPR common stock in favor of
the acquisitions. As a result, assuming that the proposal to amend PPR's
Certificate of Incorporation to increase the number of authorized shares of
PPR capital stock passes, passage of the proposal to issue 65,070,006 shares
of PPR Class B Common Stock to Delta and Dakota shareholders is assured.

Opinion and Analysis of Financial Advisor to the Special Committee (see pages
35 through 39)

In deciding whether to approve the acquisitions of Delta and Dakota, the
Special Committee and PPR's Board of Directors considered the opinion, dated
June 28, 1999, of the Special Committee's financial advisor, Bear, Stearns &
Co. Inc. ("Bear Stearns"), that, as of the date of the opinion, and based upon
and subject to the assumptions, limitations and qualifications set forth
therein, the exchange ratio provided in the exchange agreements was fair, from
a financial point of view, to the shareholders of PPR. The full text of the
opinion, which describes the procedures followed, the factors considered and
the assumptions made by Bear Stearns, is attached as Appendix C to this
document. PPR shareholders should read the opinion in its entirety carefully.

Conditions to the Acquisitions (see pages 45 through 46 and 53 through 54)

The acquisitions of Delta and Dakota each depend on a number of conditions
being satisfied, including those set forth below.

. Approval of the issuance of shares in the acquisitions by the
shareholders of PPR;

. PepsiCo's consent to the acquisitions;

. The contribution by Pohlad Companies of its DakBev Membership Units, its
Delta common stock and its interest in P-PR Transfer, LLP to Dakota,
LLC;

. The contribution by Metropolitan of common stock of PepsiCo and, subject
to its rights and obligations under the Delta Exchange Agreement, its
Delta common stock to Dakota, LLC (Metropolitan's obligation to make
such a contribution will be subject to the satisfaction of various
conditions; there can be no assurance that such contribution will be
made);

. The contribution by Beverages, Foods & Service Industries, Inc., a
wholly owned subsidiary of PepsiCo, of its interest in P-PR Transfer,
LLP to Dakota, LLC (BFSI's obligation to make such a contribution will
be subject to the satisfaction of various conditions; there can be no
assurance that such contribution will be made);

10
<PAGE>

. Both the acquisition of Delta and the acquisition of Dakota must occur;
one will not be completed without the other;

. No law or court order prohibits the acquisitions;

. The receipt of all necessary authorizations, consents, waivers, orders
and approvals;

. The PPR Class B Common Stock to be issued in the acquisitions has been
authorized for listing on the NYSE; and

. A new credit facility has been obtained.

Certain of these conditions may be waived by the party entitled to assert
the condition.

Accounting Treatment (see pages 39 through 40)

Because PPR, Delta and Dakota are each, directly or indirectly, controlled
by Pohlad Companies, the transactions will be accounted for as a combination
of entities under common control. Accordingly, the common equity interests of
Delta and Dakota owned by Pohlad Companies (representing 23.2% of Delta and
100% of Dakota) will be combined with PPR at historical cost, whereas the
other common equity interests of Delta that are acquired in the transactions
will be reported at fair value.

Material Federal Income Tax Consequences (see page 39)

PPR has structured the acquisitions so that PPR shareholders will not
recognize any gain or loss for federal income tax purposes.

Markets and Market Prices (see page 18)

PPR Class B Common Stock is listed on the NYSE under the symbol "PPO." On
June 25, 1999, the last trading date prior to the public announcement of the
proposed acquisitions, PPR Class B Common Stock closed at $4.25. There is no
established trading market for the stock of Delta or Dakota.

Interests of Certain Persons (see pages 40 through 41)

Certain members of PPR's management and PPR's Board of Directors have
interests in the acquisitions that are in addition to the interests of PPR
shareholders generally.

In addition, Pohlad Companies currently holds 52.8% voting power over PPR,
59.3% of Delta's voting common stock and 100% of Dakota's stock.

Franchise Agreements (see pages 58 through 61)

Based upon discussions with PepsiCo, Pohlad Companies believes that PepsiCo
will appoint PPR as an anchor bottler following the acquisitions. At the same
time the acquisitions are completed, PPR expects to enter into the following
bottling agreements with PepsiCo:

. a master bottling agreement and a master fountain syrup agreement for
beverages bearing the "PEPSI-COLA" and "PEPSI" trademark, including DIET
PEPSI and PEPSI ONE in the United States;

. bottling agreements and fountain syrup agreements for non-cola products
in the United States; and

. an international master bottling agreement for Puerto Rico and countries
other than the United States.

There can be no assurance that PepsiCo will appoint PPR as an anchor bottler
or that PepsiCo will enter into any of these bottling agreements with PPR. The
failure of either of these events to occur would have a material adverse
effect on PPR.

11
<PAGE>

Delta and Dakota currently have bottling agreements with other licensors of
beverage products, including Cadbury Beverages, Inc., The Seven-Up Company,
The Dr Pepper Company, the Pepsi/Lipton Tea Partnership, the North American
Coffee Partnership, Sterling Assets Corp. and Proctor & Gamble Distributing
Company.

In July 1999, PPR entered into a contract rights agreement under which
Seven-Up/RC Bottling Company of Puerto Rico, Inc. released its exclusive
rights for the production and distribution of the 7UP, Sunkist, Welch's and
Schweppes soft drink brands in Puerto Rico. PPR obtained the releases as a
precondition to its entry into new franchise agreements for these brands.

12
<PAGE>

Summary Historical and Pro Forma Combined Financial and Operating Data

The following table sets forth certain summary historical and pro forma
combined financial information of PPR. The summary pro forma combined
financial information was derived from the unaudited pro forma combined
financial and operating data appearing elsewhere in this document. The summary
historical financial information for the year ended September 30, 1998 and the
three months ended December 31, 1998 was derived from the audited consolidated
financial statements of PPR and its subsidiaries, appearing elsewhere in this
document, which statements have been audited by Arthur Andersen LLP,
independent public accountants. The summary historical financial information
for the six months ended June 30, 1999 was derived from the unaudited
consolidated financial statements of PPR, appearing elsewhere in this
document. The June 30, 1999 unaudited consolidated financial statements were
prepared on the same basis as the audited consolidated financial statements of
PPR and reflect, in the opinion of management, all adjustments (consisting of
only normal recurring adjustments) necessary for a fair presentation of such
data. Results for the three months ended December 31, 1998 and the six months
ended June 30, 1999 are not necessarily indicative of the results that may be
expected for any other interim period or for the year as a whole. The data set
forth in the table below should be read in conjunction with the unaudited pro
forma combined financial and operating data, and the consolidated financial
statements and the related notes thereto of PPR included elsewhere in this
document.

<TABLE>
<CAPTION>
Six Months Ended Three Months Ended Year Ended
June 30, 1999 December 31, 1998 September 30, 1998
------------------- ------------------- -------------------
Pro Pro Pro
Historical Forma Historical Forma Historical Forma
---------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
(U.S. dollars in thousands, except per share data)
<CAPTION>
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $50,075 $276,415 $28,328 $136,646 $99,405 $548,567
Gross profit............ 12,139 88,846 8,001 42,558 28,902 175,644
Income (loss) from
operations............. (4,580) 13,715 (614) 6,434 (9,196) 23,025
Income (loss) before
income taxes........... (5,121) 4,326 (826) 1,211 (10,588) 4,213
Net income (loss)....... (5,190) 81 (1,420) (1,585) (9,610) (1,723)
EBITDA (1).............. (2,004) 25,371 506 11,351 (3,678) 45,318
<CAPTION>
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net income (loss) (2)... $ (0.24) $ -- $ (0.07) $ (0.02) $ (0.45) $ (0.02)
Net income (loss)
(assuming dilution)
(2).................... $ (0.24) $ -- $ (0.07) $ (0.02) $ (0.45) $ (0.02)
Dividends declared per
share of common stock
(2).................... $ -- $ -- $ -- $ -- $ -- $ --
Weighted average number
of shares of common
stock outstanding...... 21,690 86,760 21,690 86,760 21,516 86,586
<CAPTION>
FINANCIAL POSITION
<S> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ 7,801 $ 12,573 $19,418 $ 23,551 $24,720 $ 28,853
Property and equipment,
net.................... 46,113 131,323 42,462 121,342 42,374 121,254
Total assets............ 86,932 466,359 92,851 446,825 97,432 452,037
Long-term debt,
including capital
leases (3)............. 21,910 260,001 23,128 251,051 23,546 251,469
Common shareholders'
equity................. 49,482 117,507 54,621 112,087 55,045 113,149
Working capital (4)..... 13,137 57,678 12,387 53,949 8,826 50,395
</TABLE>
- --------
(1) EBITDA consists of net income (loss) before income taxes, interest,
depreciation and amortization. EBITDA is included herein to provide
additional information about the company's ability to service its debt.
EBITDA should not be considered as an alternative measure of the company's
net income, operating income, cash flow from operating activities or
liquidity.
(2) Earnings per share of PPR common stock and dividends declared per share of
PPR common stock are determined by dividing net income by the weighted
average number of shares of PPR common stock

13
<PAGE>

outstanding during each period and dividends declared by the number of
shares of PPR common stock outstanding at the time of dividend declaration,
respectively.
(3) Includes current maturities of long-term debt.
(4) Working capital represents current assets (excluding cash and cash
equivalents) less current liabilities (excluding current maturities of
long-term debt and other long-term liabilities).

FORWARD-LOOKING STATEMENTS

PPR has made forward-looking statements in this document that are subject to
risks and uncertainties. Forward-looking statements include information
concerning possible or assumed future results of operations of PPR, Delta,
Dakota or the combined company. The words "believes," "expects,"
"anticipates," and similar words or expressions are intended to identify
forward-looking statements. Shareholders should note that such statements are
subject to certain risks, uncertainties and assumptions which may cause actual
results to vary. Among the factors that could cause actual performance to
differ materially are (a) difficulties in integrating the operations of PPR,
Delta and Dakota, (b) adverse effects of sales of the PPR Class B Common Stock
issued to Delta shareholders in the acquisitions after the expiration of a
six-month lock-up period, (c) competitive pressures with respect to pricing in
the combined company's markets, (d) inability to achieve cost savings due to
unexpected developments in the combined company's markets, (e) changed plans
regarding capital expenditures, (f) adverse developments with respect to
economic, climatic and political conditions in the territories in which the
combined company will operate, (g) impact of such conditions on consumer
spending, (h) possible termination of franchise agreements, (i) adverse events
affecting the popularity of PepsiCo and Cadbury Schweppes products, (j)
possible termination of the management agreements with Pohlad Companies, (k)
adverse effects of government regulations, including environmental
regulations, (l) possible failure to achieve Year 2000 compliance on a timely
basis, (m) possible product liability if any products cause injury, illness or
death, and (n) possible product recall of products that become contaminated or
are damaged or mislabeled. In the event one or more of these risks or
uncertainties materializes, or the underlying assumptions prove incorrect,
actual financial results of PPR, Delta, Dakota or the combined company could
differ materially from those expressed in the forward-looking statements.

14
<PAGE>

SECURITY OWNERSHIP

PPR common stock is currently divided into shares of PPR Class A Common
Stock, each of which is entitled to six votes per share, and PPR Class B
Common Stock, each of which is entitled to one vote per share. Information
with respect to beneficial ownership of PPR common stock is based on PPR's
records, data supplied to PPR by its shareholders and, with respect to 5% or
greater shareholders, Schedule 13D or Schedule 13G filings with the SEC.

PPR Class A Common Stock

The following table sets forth information regarding the beneficial
ownership of shares of PPR Class A Common Stock outstanding as of August 31,
1999.

<TABLE>
<CAPTION>
Percentage of
Number of shares shares of PPR
of PPR Class A Class A Common
Directors, Executive Officers and 5% Common Stock Stock Beneficially
Shareholders Beneficially Owned Owned (1)
------------------------------------ ------------------ ------------------
<S> <C> <C>
Pohlad Companies........................ 4,250,000(2) 85.0%
60 South Sixth Street
Suite 3800
Minneapolis, MN 55402
P-PR Transfer, LLP (3)(4)............... 4,000,000 80.0
60 South Sixth Street
Suite 3800
Minneapolis, MN 55402
V. Suarez & Co., Inc. (4)............... 1,000,000 20.0
P.O. Box 364588
San Juan, Puerto Rico 00936-4588
</TABLE>
- --------
(1) Based on 5,000,000 total outstanding shares of PPR Class A Common Stock on
August 31, 1999. Because the same shares may be deemed to be beneficially
owned by more than one person, the total percentages exceed 100%.
(2) Pohlad Companies has limited voting control over 4,000,000 of these shares
pursuant to the Partnership Agreement of P-PR Transfer, LLP, of which
Pohlad Companies is a general partner. Such shares are held directly by P-
PR Transfer, LLP. Pohlad Companies has voting control over 250,000 of
these shares pursuant to a Shareholders' Agreement among PPR, P-PR
Transfer, LLP and V. Suarez & Co., Inc. Such 250,000 shares are held
directly by V. Suarez & Co., Inc.
(3) P-PR Transfer, LLP is a Delaware limited liability partnership whose
general partners are Pohlad Companies and BFSI. Certain of PPR's directors
and executive officers are also affiliated with Pohlad Companies. PPR is a
franchisee of PepsiCo. See "Certain Relationships and Related
Transactions."
(4) P-PR Transfer, LLP and V. Suarez & Co., Inc. constitute a "group" for
purposes of Section 13(d) of the Securities Exchange Act and the
regulations thereunder, and have filed a joint Schedule 13D disclosing
their ownership of PPR common stock. Each disclaims beneficial ownership
of the shares of PPR common stock held by the other.

PPR Class B Common Stock

The following table sets forth information regarding the beneficial
ownership of PPR Class B Common Stock outstanding as of August 31, 1999 by (a)
each person known by PPR to be the beneficial owner of more than 5% of the
shares of PPR Class B Common Stock, (b) each director, (c) each of the
executive officers named in the summary compensation table of the "Executive
Compensation" section of this document and (d) all directors and executive
officers of PPR as a group. Unless otherwise indicated herein, each
shareholder has sole voting power and sole dispositive power with respect to
the indicated shares.

15
<PAGE>

<TABLE>
<CAPTION>
Percentage of
Number of shares shares of PPR
of PPR Class B Class B Common
Directors, Executive Officers and 5% Common Stock Stock Beneficially
Shareholders Beneficially Owned Owned (1)
------------------------------------ ------------------ ------------------
<S> <C> <C>
Pohlad Companies........................ 6,328,844(2) 35.1%
60 South Sixth Street
Suite 3800
Minneapolis, MN 55402
P-PR Transfer, LLP (3)(4)............... 6,328,344(5) 35.1
60 South Sixth Street
Suite 3800
Minneapolis, MN 55402
Shapiro Capital Management Company,
Inc.................................... 3,391,425 20.3
3060 Peachtree Rd. NW
Suite 1555
Atlanta, GA 30305
Rafael Nin.............................. 1,706,667(6) 9.4
V. Suarez & Co., Inc. (4)............... 1,631,685(7) 9.6
P.O. Box 364588
San Juan, Puerto Rico 00936-4588
Basil K. Vasiliou....................... 68,920(8) *
A. David Velez.......................... 40,000(9) *
Diego Suarez, Jr........................ 6,400(10) *
Christopher E. Clouser.................. 1,000(9) *
Philip N. Hughes........................ 1,000(9) *
John F. Woodhead........................ 1,000(9) *
Raymond W. Zehr, Jr..................... 1,000(9) *
Robert C. Pohlad........................ 500(11) *
Michael D. White........................ 0 *
All Directors and Executive Officers as
a Group (14 persons)................... 119,820(12) *
</TABLE>
- --------
* Less than 1%
(1) Based on 16,690,000 total outstanding shares of PPR Class B Common Stock
on August 31, 1999. Because the same shares may be deemed to be
beneficially owned by more than one person, the total percentages will
exceed 100%.
(2) Pohlad Companies has limited voting control over 6,328,344 of these shares
(including 1,360,000 shares issuable pursuant to presently exercisable
warrants) pursuant to the Partnership Agreement of P-PR Transfer, LLP, of
which Pohlad Companies is a general partner. Such shares are held directly
by P-PR Transfer, LLP. The remaining 500 of these shares are held directly
by Pohlad Companies.
(3) P-PR Transfer, LLP is a Delaware limited liability partnership whose
general partners are Pohlad Companies and BFSI. Certain of PPR's directors
and executive officers are also affiliated with Pohlad Companies. PPR is a
franchisee of PepsiCo.
(4) P-PR Transfer, LLP and V. Suarez & Co., Inc. constitute a "group" for
purposes of Section 13(d) of the Securities Exchange Act and the
regulations thereunder, and have filed a joint Schedule 13D disclosing
their

16
<PAGE>

ownership of PPR common stock. Each disclaims beneficial ownership of the
shares of PPR common stock held by the other.
(5) Includes 1,360,000 shares which may be purchased pursuant to a warrant.
(6) Includes 1,516,667 shares which may be purchased pursuant to stock
options.
(7) Includes 340,000 shares which may be purchased pursuant to a warrant.
(8) Includes 1,000 shares which may be purchased pursuant to stock options.
Mr. Vasiliou owns 43,500 shares of PPR Class B Common Stock through two
Investment Retirement Accounts. Mr. Vasiliou's wife, Jane T. Vasiliou,
owns 17,000 shares of PPR Class B Common Stock, of which Mr. Vasiliou has
dispositive power. Pursuant to the Jane T. Vasiliou Trust, Mr. Vasiliou
has dispositive power with respect to 4,000 shares of PPR Class B Common
Stock. Pursuant to the K&S Vasiliou Trust, Mr. Vasiliou has dispositive
power with respect to 3,000 shares of PPR Class B Common Stock. Mr.
Vasiliou also beneficially owns 420 shares of PPR Class B Common Stock as
beneficiary of the Vasiliou & Company, Inc. Retirement Plan.
(9) Consists of shares which may be purchased pursuant to stock options.
(10) Includes 1,000 shares which may be purchased pursuant to stock options.
Mr. Suarez is Chief Executive Officer and a director of V. Suarez & Co.,
Inc.
(11) Consists of shares held directly by Pohlad Companies. Does not include
the shares of PPR common stock over which Pohlad Companies exercises
voting control. Mr. Pohlad is President, a director and a one-third
equity owner of Pohlad Companies, one of the general partners of P-PR
Transfer, LLP.
(12) Includes 46,000 shares which may be purchased pursuant to stock options.
Does not include the shares of PPR common stock held directly by Pohlad
Companies or shares of PPR common stock over which Pohlad Companies
exercises voting control.

17
<PAGE>

MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS

As of August 31, 1999, PPR had (i) 5,000,000 shares of PPR Class A Common
Stock, par value $0.01 per share, issued and outstanding and held by two
shareholders of record, and (ii) 16,690,000 shares of PPR Class B Common
Stock, par value $0.01 per share, issued and outstanding and held by
approximately 2,500 shareholders of record. The principal market for PPR Class
B Common Stock is the NYSE, where it has been listed for trading since
September 20, 1995 under the symbol "PPO." PPR Class A Common Stock is not
listed for trading on any securities exchange.

The following table sets forth, for the periods indicated, the high and low
sales prices of PPR Class B Common Stock on the NYSE as reported in the
consolidated transaction reporting system.

<TABLE>
<CAPTION>
High Low
------- -------
<S> <C> <C>
Calendar Year 1997
First Quarter........................................... $5.0000 $4.0000
Second Quarter.......................................... 6.6250 4.1250
Third Quarter........................................... 8.1250 5.7500
Fourth Quarter.......................................... 7.7500 6.3125
Calendar Year 1998
First Quarter........................................... 8.0000 6.0625
Second Quarter.......................................... 7.7500 6.6250
Third Quarter........................................... 9.0625 6.0000
Fourth Quarter.......................................... 6.2500 4.4375
Calendar Year 1999
First Quarter........................................... 7.2500 4.6250
Second Quarter.......................................... 6.0625 4.1250
Third Quarter (through 8/31/99)......................... 6.0000 4.8750
</TABLE>

On June 25, 1999, the last full trading day before the public announcement
of the proposed acquisitions, the closing sale price for PPR Class B Common
Stock on the NYSE was $4.25.

Shareholders are advised to obtain a current market quotation for PPR Class
B Common Stock. No assurance can be given as to the market value of PPR Class
B Common Stock after the completion of the acquisitions. Because the market
price of PPR Class B Common Stock is subject to fluctuation, the value of the
shares of PPR Class B Common Stock that shareholders of Delta and Dakota
common stock will receive in the acquisitions may increase or decrease prior
to and following the acquisitions.

There are neither any established public trading markets nor any market
quotations for Delta and Dakota stock.

PPR's Board of Directors from time to time may declare, and PPR may pay,
dividends on outstanding shares of PPR common stock in the manner and upon the
terms and conditions provided by law. Pursuant to the terms of a credit
agreement with Banco Popular, PPR may not pay dividends without the consent of
Banco Popular if an event of default under the credit agreement (including a
violation of the financial restrictions) has occurred or would occur because
of the payment of dividends. Other than a $0.24 per share dividend paid on PPR
common stock in December 1995, PPR has not paid any cash dividends on PPR
common stock since becoming a public company in 1995. PPR expects that for the
foreseeable future it will follow a policy of retaining earnings in order to
finance the continued development of its business.

The transfer agent for PPR Class B Common Stock is Bank of New York, 101
Barclay Street, Floor 12 West, New York, New York 10286. Its telephone number
is (212) 815-2451.

18
<PAGE>

SELECTED HISTORICAL FINANCIAL AND OPERATING DATA

The following tables set forth certain selected historical consolidated
financial information for PPR, Delta and Dakota. The selected financial data
for the six-month periods ended June 30, 1999 and 1998 are derived from the
unaudited consolidated financial statements of each entity. All financial data
derived from the June 30, 1999 and 1998 unaudited financial statements have
been prepared on the same basis as the audited financial statements of each
entity and reflect, in the opinion of each entity's management, all
adjustments (consisting of only normal recurring adjustments) necessary for a
fair presentation of such data. Results for the six-month periods ended June
30, 1999 and 1998 are not necessarily indicative of the results that may be
expected for any other interim period or for the year as a whole. The data set
forth in the tables should be read in conjunction with the audited financial
statements of each entity, and the related notes thereto, included elsewhere
in this document.

19
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY

The following tables present selected historical consolidated financial
information of PPR and reflect the results of operations of PPR and its
previous equity interest in the net earnings or loss of Buenos Aires
Embotelladora S.A. ("BAESA") prior to June 17, 1998. This data has been
derived from the historical consolidated financial statements of PPR and its
subsidiaries. On June 17, 1998, PPR distributed all shares of BAESA held by it
pro-rata to holders of PPR Class B Common Stock by way of a special dividend.
The consolidated financial statements of PPR for each of the four years ended
September 30, 1997 have been audited by KPMG LLP, independent public
accountants. The consolidated financial statements of PPR as of December 31,
1998 and for the three months then ended and as of September 30, 1998 and for
the year then ended have been audited by Arthur Andersen LLP, independent
public accountants. Effective January 1, 1999, PPR changed its fiscal year to
a calendar year.
<TABLE>
<CAPTION>
Three
Six Months Months Ended
Ended June 30, December 31, Fiscal Years Ended September 30,
------------------- ------------ ------------------------------------------------------
1999 1998 1998 1998 1997 1996 1995 1994
------- ------- ------------ ------- ------- -------- -------- --------
(U.S. Dollars in thousands, except per share data)
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $50,075 $48,785 $28,328 $99,405 $99,172 $102,891 $114,301 $104,048
Gross profit............ 12,139 12,592 8,001 28,902 30,935 27,935 46,455 43,474
Income (loss) from
operations............. (4,580)(5) (4,390) (614)(5) (9,196)(5) (21,420)(5) (26,827)(5) 9,735 (437)(5)
Income (loss) before
income taxes and equity
in BAESA............... (5,121) (5,131) (826) (10,588) (22,845) (24,077) 9,118 14,065
Equity income (loss) in
BAESA, net of taxes.... -- -- -- -- -- (51,458) 5,638 9,753
Net income (loss)....... (5,190) (4,209) (1,420) (9,610) (19,503) (74,330) 15,053 17,575
EBITDA (1).............. (2,004) (1,578) 506 (3,678) (15,448) (70,841) 20,545 29,825
<CAPTION>
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before
equity in BAESA, net of
income taxes (2)....... $ (0.24) $ (0.20) $ (0.07) $ (0.45) $ (0.91) $ (1.06) $ 0.52 $ 0.43
Net income (loss) (2)... $ (0.24) $ (0.20) $ (0.07) $ (0.45) $ (0.91) $ (3.46) $ 0.83 $ 0.98
Dividends declared per
share of common stock
(2).................... $ -- $ -- $ -- $ -- $ -- $ 0.24 $ 0.27 $ 1.18
Weighted average number
of shares of common
stock outstanding...... 21,690 21,500 21,690 21,516 21,500 21,500 18,105 18,000
<CAPTION>
FINANCIAL POSITION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ 7,801 $10,958 $19,418 $24,720 $19,621 $ 18,680 $ 46,091 $ 1,347
Property and equipment,
net.................... 46,113 44,859 42,462 42,374 45,788 49,936 36,445 32,397
Total assets............ 86,932 87,224 92,851 97,432 95,910 109,981 185,666 128,878
Long-term debt,
including capital
leases (3)............. 21,910 24,105 23,128 23,546 26,064 7,575 9,967 14,071
Common shareholders'
equity................. 49,482 38,192 54,621 55,045 43,392 49,357 128,649 75,931
Working capital (4)..... 13,137 878 12,387 8,826 (813) (15,072) 2,580 5,374
<CAPTION>
OTHER DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating cash flows.... $(4,342) $(1,503) $(3,693) $(7,537) $(7,504) $ (6,542) $ 16,497 $ (7,901)
Capital expenditures.... 6,793 1,053 1,203 2,997 4,663 24,421 9,589 3,961
</TABLE>
- --------
(1) EBITDA consists of net income (loss) before income taxes, interest,
depreciation and amortization. EBITDA is included herein to provide
additional information about PPR's ability to service its debt. EBITDA
should not be considered as an alternative measure of PPR's net income,
operating income, cash flow from operating activities or liquidity.
(2) Earnings per share of PPR common stock and dividends declared per share of
PPR common stock are determined by dividing net income by the weighted
average number of shares of PPR common stock outstanding during each
period and dividends declared by the number of shares of PPR common stock
outstanding at the time of dividend declaration, respectively. Earnings
per share information for fiscal years 1994 and 1995 has been adjusted to
give effect to a stock split that occurred in fiscal year 1995.
(3) Includes current maturities of long-term debt.
(4) Working capital represents current assets (excluding cash and cash
equivalents) less current liabilities (excluding current maturities of
long-term debt).
(5) Includes special charges, net, for the six months ended June 30, 1999 and
the three months ended December 31, 1998 of $959 and ($96), respectively,
and special charges, net, for the fiscal years ended September 30, 1998,
1997, 1996 and 1994 of $1,979, $13,707, $4,811 and $18,810, respectively.

20
<PAGE>

DELTA BEVERAGE GROUP, INC.

The following table sets forth certain selected historical consolidated
financial information of Delta as of and for each of the six-month periods
ended June 30, 1999 and 1998, and as of and for each of the five years ended
December 31, 1998. This data has been derived from the historical consolidated
financial statements of Delta and its subsidiary, which statements as of and
for each of the fiscal years ended December 31, 1998 have been audited by
Arthur Andersen LLP, independent public accountants.

<TABLE>
<CAPTION>
Six Months Ended
June 30, Years Ended December 31,
------------------ ---------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(U.S. Dollars in thousands)
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $177,742 $171,778 $352,085 $323,221 $312,284 $284,709 $245,472
Gross profit............ 55,763 52,519 106,402 106,661 97,199 85,932 82,805
Operating income........ 9,344 7,327 15,735 19,669 16,652 10,554 16,464
Income (loss) before
income taxes, minority
interest and
extraordinary item..... (348) (2,088) (3,210) 1,836 938 (2,775) 4,357
Net income (loss)....... (148) (610) (3,311) (139) (2,278)(4) (3,952) 1,095
EBITDA (1).............. 16,933 14,087 29,870 30,855 26,248 20,730 25,594
<CAPTION>
FINANCIAL POSITION
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ 3,976 $ 4,995 $ 3,818 $ 4,680 $ 12,171 $ 7,933 $ 9,540
Property and equipment,
net.................... 65,566 62,090 61,539 55,256 48,224 45,913 34,313
Total assets............ 280,608 274,182 271,652 260,914 255,327 248,437 244,705
Long-term debt and other
liabilities (2):
Senior notes payable.. 120,000 120,000 120,000 120,000 120,000 117,250 106,000
Subordinated notes
payable.............. 51,244 46,041 48,573 43,640 39,209 35,227 31,650
Other................. 15,418 12,517 12,157 6,764 5,067 5,673 6,579
Preferred stock......... 31,725 29,891 30,794 29,014 27,336 25,756 24,267
Common shareholders'
equity................. 25,138 29,819 26,216 31,303 33,113 36,962 42,393
Working capital (3)..... 34,074 34,530 32,507 35,404 23,698 27,547 30,421
<CAPTION>
OTHER DATA
<S> <C> <C> <C> <C> <C> <C> <C>
Operating cash flows.... $ 8,836 $ 8,374 $ 17,046 $ 10,158 $ 21,709 $ 13,200 $ 9,786
Capital expenditures.... 8,630 10,928 14,885 14,988 8,964 10,726 7,104
</TABLE>
- --------
(1) EBITDA consists of net income (loss) before income taxes, interest,
depreciation and amortization. EBITDA also excludes extraordinary items
and accounting changes. EBITDA has also been adjusted for a minority
interest in Delta's subsidiary. EBITDA is included herein to provide
additional information about Delta's ability to service its debt. EBITDA
should not be considered as an alternative measure of Delta's net income,
operating income, cash flow from operating activities or liquidity.
(2) Includes current maturities of long-term debt.
(3) Working capital represents current assets (excluding cash and cash
equivalents) less current liabilities (excluding current maturities of
long-term debt and other long-term liabilities).
(4) Includes an extraordinary item (loss on extinguishment of debt) of
($1,519) net of an income tax benefit of $953.

21
<PAGE>

DAKOTA BEVERAGE COMPANY, INC.

The following table sets forth certain selected historical consolidated
financial information of Dakota as of and for each of the six-month periods
ended June 30, 1999 and 1998, and as of and for each of the five years ended
December 31, 1998. This data has been derived from the historical consolidated
financial statements of Dakota and its subsidiaries, which statements as of
and for each of the five years ended December 31, 1998 have been audited by
Arthur Andersen LLP, independent public accountants.

<TABLE>
<CAPTION>
Six Months
Ended June 30, Years Ended December 31,
------------------ ----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- ------- ------- ------- ------- ------- -------
(U.S. Dollars in thousands)
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $48,735 $47,571 $97,360 $94,899 $89,485 $86,550 $78,542
Gross profit............ 20,944 19,486 40,340 40,950 36,583 35,768 32,951
Operating income........ 6,328 7,345 15,404 16,544 15,313 15,219 13,688
Income before income
taxes.................. 6,048 6,863 14,853 15,749 14,509 13,952 12,155
Net income.............. 6,048 6,863 14,853 18,211(1) 8,891 8,521 7,390
Pro forma net income.... 3,448(3) 4,163(3) 9,261(3) 9,608(3) 8,891 8,521 7,390
EBITDA (2).............. 8,254 8,883 18,829 19,573 18,487 17,992 17,035
<CAPTION>
FINANCIAL POSITION
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ 646 $ 2,677 $ 315 $ 7,242 $ 6,529 $ 4,203 $ 327
Property and equipment,
net.................... 19,644 17,985 17,341 15,937 13,522 11,407 11,301
Total assets............ 49,875 47,734 44,067 48,211 44,789 40,274 36,746
Long-term debt (4):
Senior notes payable.. 27,450 9,450 28,450 10,450 12,450 14,450 16,450
Other................. 12,236 -- 9,800 1,033 -- -- 85
Common shareholder's
equity (deficit)....... 307(5) 30,535 (413)(5) 30,013 22,702 18,164 12,697
Working capital (6)..... 5,321 6,924 6,704 4,530 4,639 6,058 6,268
<CAPTION>
OTHER DATA
<S> <C> <C> <C> <C> <C> <C> <C>
Operating cash flows.... $ 8,922 $ 6,317 $15,849 $18,731 $12,706 $11,797 $ 9,766
Capital expenditures.... 4,154 3,853 4,544 5,401 4,844 2,860 4,436
</TABLE>
- --------
(1) Effective January 1, 1997, Dakota elected S corporation status, whereby
the taxable income and any "available" tax credits of Dakota are included
in the income tax returns of Dakota's shareholders. The 1997 results of
operations reflected an income tax benefit as a result of the reversal of
previously recorded deferred income tax liabilities.
(2) EBITDA consists of net income before income taxes, interest, depreciation
and amortization. EBITDA is included herein to provide additional
information about Dakota's ability to service its debt. EBITDA should not
be considered an alternative measure of Dakota's net income, operating
income, cash flow from operating activities or liquidity.
(3) Pro forma net income represents the effect "as if" Dakota had been a
taxable corporation during the six months ended June 30, 1999 and 1998 and
the years ended December 31, 1998 and 1997, using an effective tax rate of
39.0%, 39.0%, 37.6% and 39.0%, respectively.
(4) Includes current maturities of long-term debt.
(5) Includes $33,400 representing a note receivable from Pohlad Companies. It
is the intent of Pohlad Companies for Dakota to forgive the note prior to
consummation of the acquisitions.
(6) Working capital represents current assets (excluding cash and cash
equivalents) less current liabilities (excluding current maturities of
long-term debt).

22
<PAGE>

HISTORICAL AND PRO FORMA PER SHARE DATA

The following table sets forth certain selected historical per share data
for PPR, unaudited pro forma per share data for the combined company and
equivalent unaudited pro forma per share data for Delta and Dakota. The
unaudited pro forma financial data assumes that the acquisitions were
consummated at the beginning of PPR's latest full fiscal year. The unaudited
pro forma financial data is based upon an acquisition involving entities under
common control, with only the acquisition of Delta's minority interests
recognized using the "purchase" method of accounting. All other accounts are
combined at historical cost. The unaudited pro forma per share data is based
upon PPR's historical weighted average number of shares outstanding, adjusted
to include the number of PPR shares that would be issued in the transaction
based upon the share exchange ratios defined in the share exchange agreements,
included elsewhere in this document. The unaudited pro forma equivalent per
share data for Delta and Dakota is based upon the unaudited pro forma amounts
per share, multiplied by the share exchange ratios. This information should be
read in conjunction with the historical consolidated financial statements of
PPR, Delta and Dakota included elsewhere in this document and the unaudited
pro forma condensed combined financial statements included elsewhere in this
document.

<TABLE>
<CAPTION>
Year Ended
Six Months Three Months September 30,
Ended Ended ------------------------
June 30, 1999 December 31, 1998 1998 1997 1996
------------- ----------------- -------- ------ ------
PPR Historical
<S> <C> <C> <C> <C> <C>
Net loss per common
share.................. $ (0.24) $ (0.07) $ (0.45) $(0.91) $(3.46)
Net loss per common
share-assuming
dilution............... (0.24) (0.07) (0.45) (0.91) (3.46)
Cash dividends per
common share........... -- -- -- -- --
Book value per common
share (at end of
period)................ 2.28 2.52 2.56
<CAPTION>
Pro Forma Combined
Company
<S> <C> <C> <C> <C> <C>
Pro forma net loss per
common share........... $ 0.00 $ (0.02) $ (0.02)
Delta equivalent pro
forma net loss per
common share........... 0.32 (6.88) (6.88)
Dakota equivalent pro
forma net loss per
common share........... 43.66 (935.20) (935.20)
Pro forma net loss per
common share - assuming
dilution............... $ 0.00 $ (0.02) $ (0.02)
Delta equivalent pro
forma net loss per
common share - assuming
dilution............... 0.31 (6.88) (6.88)
Dakota equivalent pro
forma net loss per
common share - assuming
dilution............... 41.99 (935.20) (935.20)
Pro forma book value per
common share (at end of
period)................ $ 1.35 $ 1.29 $ 1.31
Delta equivalent pro
forma book value per
common share (at end of
period)................ 464.40 443.76 450.64
Dakota equivalent pro
forma book value per
common share (at end of
period)................ 63,126 60,320 61,256
</TABLE>

23
<PAGE>

PRO FORMA COMBINED FINANCIAL AND OPERATING DATA

The following unaudited pro forma condensed combined financial statements
give effect to the acquisitions by PPR of Delta and Dakota. The unaudited pro
forma condensed combined statement of earnings for the year ended September
30, 1998 was prepared based upon PPR's audited consolidated financial
statements for the fiscal year ended September 30, 1998, and Delta's and
Dakota's audited consolidated financial statements for the year ended December
31, 1998. The unaudited pro forma condensed combined statement of earnings for
the three months ended December 31, 1998 was prepared based upon PPR's audited
consolidated financial statements for the three months ended December 31,
1998, and Delta's and Dakota's unaudited consolidated financial statements for
the three months ended December 31, 1998. The unaudited pro forma condensed
combined statement of earnings for the six months ended June 30, 1999 was
prepared based upon the June 30, 1999 unaudited consolidated financial
statements of PPR, Delta and Dakota. The pro forma adjustments for each of the
unaudited pro forma condensed combined statements of earnings were prepared as
if the acquisitions had occurred at the beginning of PPR's latest full fiscal
year. The unaudited pro forma condensed combined balance sheet was prepared
based upon the June 30, 1999 unaudited consolidated financial statements of
PPR, Delta and Dakota, as if the acquisitions had occurred on that date. The
pro forma financial statements do not reflect any cost savings or other
synergies discussed elsewhere in this document. The pro forma adjustments are
based upon an acquisition involving entities under common control, with the
acquisition of Delta's minority interests recognized using the "purchase"
method of accounting. All other interests of Pohlad Companies in Delta and
Dakota so acquired are recorded at historical cost. The pro forma adjustments
are also based upon available information and include particular assumptions
that the managements of PPR, Delta and Dakota believe to be reasonable. The
pro forma credit facility adjustments are based upon PPR obtaining a new
credit facility (as discussed elsewhere in this document) to refinance certain
existing indebtedness of PPR, Delta and Dakota.

The unaudited pro forma condensed combined financial statements and
accompanying notes should be read in conjunction with the audited historical
consolidated financial statements of PPR, Delta and Dakota, and the related
notes thereto, that are included elsewhere in this document.

The unaudited pro forma condensed combined financial statements are provided
for informational purposes only in response to SEC requirements and do not
purport to represent what PPR's financial position or results of operations
would actually have been if the acquisitions had in fact occurred at such
dates or to project PPR's financial position or results of operations for any
future date or period.

24
<PAGE>

Pepsi-Cola Puerto Rico Bottling Company
Unaudited Pro Forma Condensed Combined Statement of Earnings
Year Ended September 30, 1998
(U.S. dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Pepsi-Cola
Puerto Rico Dakota Pro Forma
Bottling Delta Beverage Beverage Credit
Company Group, Inc. Company, Inc. Pro Forma Facility Pro Forma
(Historical) (Historical) r (Historical) r Adjustments Adjustments Combined
------------ -------------- -------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $99,405 $352,085 $97,360 $ (283)a $ $548,567
Cost of sales........... 70,503 245,683 57,020 (283)a 372,923
------- -------- ------- ------- ----- --------
Gross profit............ 28,902 106,402 40,340 -- 175,644
Selling, general and
administrative
expenses............... 35,910 87,019 24,497 (2,077)c 145,349
Amortization of
franchise costs and
other intangibles...... 209 3,648 439 995 b 5,291
Restructuring charges... 1,728 -- -- 1,728
Provision for legal and
environmental
reserves............... 760 -- -- 760
Losses on asset
impairments............ 800 -- -- 800
Insurance proceeds from
business interruption
and other losses....... (1,309) -- -- (1,309)
------- -------- ------- ------- ----- --------
Income (loss) from
operations............. (9,196) 15,735 15,404 1,082 23,025
------- -------- ------- ------- ----- --------
Other income (expense):
Interest, net........... (1,598) (18,770) (573) 853 d 1,223 f (18,865)
Other, net.............. 206 (175) 22 53
------- -------- ------- ------- ----- --------
(1,392) (18,945) (551) 853 1,223 (18,812)
------- -------- ------- ------- ----- --------
Income (loss) before
income taxes and
minority interest...... (10,588) (3,210) 14,853 1,935 1,223 4,213
Minority interest, net
of taxes............... -- 335 -- (1,068)q (733)
Income tax benefit
(expense).............. 978 (436) -- (5,256)e (489)g (5,203)
------- -------- ------- ------- ----- --------
Net income (loss)....... $(9,610) $ (3,311) $14,853 $(4,389) $ 734 $ (1,723)
======= ======== ======= ======= ===== ========
Net loss per common
share.................. $ (0.45) $ (0.02)
======= ========
Net loss per common
share- assuming
dilution............... $ (0.45) $ (0.02)
======= ========
Weighted average number
of common shares
outstanding............ 21,516 86,586
======= ========
Weighted average number
of common shares
outstanding-assuming
dilution............... 21,516 86,586
======= ========
</TABLE>

The accompanying notes are an integral part of this Unaudited Pro Forma
Condensed Combined Statement of Earnings.

25
<PAGE>

Pepsi-Cola Puerto Rico Bottling Company
Unaudited Pro Forma Condensed Combined Statement of Earnings
Three Months Ended December 31, 1998
(U.S. dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Pepsi-Cola
Puerto Rico Dakota Pro Forma
Bottling Delta Beverage Beverage Credit
Company Group, Inc. Company, Inc. Pro Forma Facility Pro Forma
(Historical) (Historical) r (Historical) r Adjustments Adjustments Combined
------------ -------------- -------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $28,328 $86,178 $23,343 $(1,203)a $ $136,646
Cost of sales........... 20,327 61,124 13,840 (1,203)a 94,088
------- ------- ------- ------- ---- --------
Gross profit............ 8,001 25,054 9,503 -- -- 42,558
Selling, general and
administrative
expenses............... 8,676 21,900 4,858 (519)c 34,915
Amortization of
franchise costs and
other intangibles...... 35 912 110 248 b 1,305
Losses on asset
impairments............ 250 -- -- 250
Insurance proceeds from
business interruption
and other losses....... (346) -- -- (346)
------- ------- ------- ------- ---- --------
Income (loss) from
operations............. (614) 2,242 4,535 271 -- 6,434
------- ------- ------- ------- ---- --------
Other expense:
Interest, net (205) (4,697) (103) 208 d 363 f (4,434)
Other, net.............. (7) (49) (733) (789)
------- ------- ------- ------- ---- --------
(212) (4,746) (836) 208 363 (5,223)
------- ------- ------- ------- ---- --------
Income (loss) before
income taxes and
minority interest...... (826) (2,504) 3,699 479 363 1,211
Minority interest, net
of taxes............... -- 119 -- (267)q (148)
Income tax benefit
(expense).............. (594) (391) (1,518)e (145)g (2,648)
------- ------- ------- ------- ---- --------
Net income (loss)....... $(1,420) $(2,776) $ 3,699 $(1,306) $218 $ (1,585)
======= ======= ======= ======= ==== ========
Net loss per common
share.................. $ (0.07) $ (0.02)
======= ========
Net loss per common
share- assuming
dilution............... $ (0.07) $ (0.02)
======= ========
Weighted average number
of common shares
outstanding............ 21,690 86,760
======= ========
Weighted average number
of common shares
outstanding-assuming
dilution............... 21,690 86,760
======= ========
</TABLE>

The accompanying notes are an integral part of this Unaudited Pro Forma
Condensed Combined Statement of Earnings.

26
<PAGE>

Pepsi-Cola Puerto Rico Bottling Company
Unaudited Pro Forma Condensed Combined Statement of Earnings
Six Months Ended June 30, 1999
(U.S. dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Pepsi-Cola
Puerto Rico Delta Dakota Pro Forma
Bottling Beverage Beverage Credit
Company Group, Inc. Company, Inc. Pro Forma Facility Pro Forma
(Historical) (Historical) (Historical) Adjustments Adjustments Combined
------------ ------------ ------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $ 50,075 $177,742 $48,735 $ (137)a $ $276,415
Cost of sales........... 37,936 121,979 27,791 (137)a 187,569
-------- -------- ------- ------- ---- --------
Gross profit............ 12,139 55,763 20,944 -- -- 88,846
Selling, general and
administrative
expenses............... 15,760 44,595 13,048 (1,079)c 72,324
Amortization of
franchise costs and
other intangibles...... -- 1,824 219 497 b 2,540
Fees related to
combination of
interests.............. 692 -- 1,349 (2,041)j -- --
Losses on asset
impairments............ 267 -- -- 267
-------- -------- ------- ------- ---- --------
Income (loss) from
operations............. (4,580) 9,344 6,328 2,623 -- 13,715
-------- -------- ------- ------- ---- --------
Other income (expense):
Interest, net........... (643) (9,618) (225) 406 d 718 f (9,362)
Other, net.............. 102 (74) (55) (27)
-------- -------- ------- ------- ---- --------
(541) (9,692) (280) 406 718 (9,389)
-------- -------- ------- ------- ---- --------
Income (loss) before
income taxes and
minority interest...... (5,121) (348) 6,048 3,029 718 4,326
Minority interest, net
of taxes............... -- 71 -- (559)q (488)
Income tax benefit
(expense).............. (69) 129 -- (3,530)e (287)g (3,757)
-------- -------- ------- ------- ---- --------
Net income (loss)....... $ (5,190) $ (148) $ 6,048 $(1,060) $431 $ 81
======== ======== ======= ======= ==== ========
Net loss per common
share.................. $ (0.24) $ 0.00
======== ========
Net loss per common
share- assuming
dilution............... $ (0.24) $ 0.00
======== ========
Weighted average number
of common shares
outstanding............ 21,690 86,760
======== ========
Weighted average number
of common shares
outstanding-assuming
dilution............... 21,690 90,200
======== ========
</TABLE>

The accompanying notes are an integral part of this Unaudited Pro Forma
Condensed Combined Statement of Earnings.

27
<PAGE>

Pepsi-Cola Puerto Rico Bottling Company
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 1999
(U.S. dollars in thousands)

<TABLE>
<CAPTION>
Pepsi-Cola
Puerto Rico Delta Dakota Pro Forma
Bottling Beverage Beverage Credit
Company Group, Inc. Company, Inc. Pro Forma Facility Pro Forma
(Historical) (Historical) (Historical) Adjustments Adjustments Combined
------------ ------------ ------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash
equivalents............ $ 7,801 $ 3,976 $ 646 $ 150 j $ $ 12,573
Accounts receivable:
Trade, net............ 13,351 27,601 9,106 (63)a 49,995
Marketing, advertising
and related parties.. 2,376 3,862 340 6,578
Other 2,412 2,650 575 (170)a 5,467
Inventories............. 3,308 19,701 3,143 26,152
Bottles, cases and
shells................. 820 6,216 401 7,437
Deferred income taxes... 32 4,628 -- 4,660
Prepaid expenses and
other assets........... 4,820 2,936 1,638 9,394
-------- -------- -------- -------- ------ ---------
Total current
assets............. 34,920 71,570 15,849 (83) 122,256
PROPERTY AND EQUIPMENT,
net.................... 46,113 65,566 19,644 131,323
LONG-LIVED ASSETS HELD
FOR SALE............... 2,615 -- -- 2,615
DEFERRED INCOME TAXES... 1,221 21,169 -- (1,605)h 20,785
INTANGIBLE ASSETS, net.. 1,112 107,169 12,819 49,183 i 2,367 k 172,650
OTHER ASSETS............ 951 15,134 1,563 (918)j 16,730
-------- -------- -------- -------- ------ ---------
Total assets........ $ 86,932 $280,608 $ 49,875 $ 46,577 $2,367 $ 466,359
======== ======== ======== ======== ====== =========
CURRENT LIABILITIES:
Current installments of
long-term debt and
other liabilities...... $ 1,087 $ 149 $ 2,500 $ $ $ 3,736
Accounts payable........ 6,411 16,087 3,398 (233)a 24,693
(970)j
Accrued expenses........ 7,571 17,433 6,484 (3,283)j (893)l 27,312
-------- -------- -------- -------- ------ ---------
Total current
liabilities.......... 15,069 33,669 12,382 (4,486) (893) 55,741
-------- -------- -------- -------- ------ ---------
LONG-TERM DEBT AND OTHER
LIABILITIES............ 20,823 186,513 37,186 1,843 o 4,600 l 256,265
5,300 j
MINORITY INTEREST....... -- 3,563 -- 31,725 p 35,288
ACCRUED PENSION COST.... 1,558 -- -- 1,558
SHAREHOLDERS' EQUITY:
Preferred stock......... -- 31,725 -- (31,725)p --
Common stock............ 217 -- 1 650 m 868
Additional paid-in
capital................ 127,516 115,765 5,011 44,088 m 292,380
Retained earnings
(deficit).............. (75,955) (90,626) 28,695 (818)n (1,340) (140,044)
Note receivable from
Pohlad Companies....... -- -- (33,400) (33,400)
Deferred compensation... (406) (1) -- (407)
Accumulated other
comprehensive loss..... (1,890) -- -- (1,890)
-------- -------- -------- -------- ------ ---------
Total shareholders'
equity............. 49,482 56,863 307 12,195 (1,340) 117,507
-------- -------- -------- -------- ------ ---------
Total liabilities
and shareholders'
equity............. $ 86,932 $280,608 $ 49,875 $ 46,577 $2,367 $ 466,359
======== ======== ======== ======== ====== =========
</TABLE>

The accompanying notes are an integral part of this Unaudited Pro Forma
Condensed Combined Balance Sheet.

28
<PAGE>

Notes to Unaudited Pro Forma Condensed
Combined Financial Statements

(a) Represents the elimination of intercompany transactions and balances
between PPR, Delta and Dakota.

(b) Represents additional amortization expense on the excess purchase price
resulting from PPR's acquisition of the non-Pohlad Companies' common
equity interests in Delta. The acquisition of the non-Pohlad Companies'
equity interests in Delta is accounted for using the "purchase" method of
accounting and will be reported at fair value.

(c) Represents a reduction in the management fees charged by Pohlad Companies
to reflect the pro forma management fees on a combined basis.

(d) Delta's senior notes, which will not be repaid by the credit facility,
will be reported at fair value using the "purchase" method of accounting.
This adjustment includes a reduction in the amortization of Delta's
existing deferred financing costs related to its senior notes and
amortization of the adjustment reflecting Delta's senior notes at fair
value.

(e) Represents the income tax effect of the combination of PPR, Delta and
Dakota, including (1) the consolidation of PPR's holding company with
Delta and Dakota for U.S. income tax purposes and (2) the tax effect of
the pro forma adjustments.

(f) Represents the net reduction in interest expense resulting from the
replacement of certain existing indebtedness of PPR, Delta and Dakota with
the new credit facility. This adjustment includes a net favorable interest
rate differential, partially offset by incremental amortization of new
deferred financing costs.

PPR intends to use the proceeds (1) to provide to Delta for the purpose of
repaying subordinated debt, (2) to lend to Dakota for the purpose of
repaying senior secured notes (including a $1.8 million prepayment
penalty), (3) to repay PPR's secured term loan, and (4) for working capital
and acquisitions. See the section describing "The Credit Facilities"
elsewhere in this document for further information. The effect on income of
a 1/8% variance in interest rates approximated $72 thousand, $20 thousand,
and $41 thousand, respectively, for the year ended September 30, 1998, the
three months ended December 31, 1998, and the six months ended June 30,
1999, net of income taxes.

(g) Represents the tax effect of the credit facility adjustments.

(h) Represents the deferred income tax effect of the consolidation of PPR's
holding company with Delta and Dakota for U.S. income tax purposes.

(i) Represents the net incremental goodwill resulting from PPR's acquisition
of the non-Pohlad Companies' equity interests in Delta. Such excess
purchase price will be amortized ratably over 40 years. The acquisition of
the non-Pohlad Companies' common equity interests in Delta is accounted
for using the "purchase" method of accounting and will be reported at fair
value.

The fair value of the consideration exchanged for the non-Pohlad Companies'
common equity interests in Delta, including $2.2 million in acquisition
costs, approximates $61.5 million. As of June 30, 1999, a preliminary
allocation of such purchase price to Delta's tangible and intangible assets
and liabilities was as follows (in millions):

<TABLE>
<CAPTION>
<S> <C>
Tangible assets...................... $147.8
Intangible assets (goodwill)......... 129.2
Liabilities and preferred stock...... (215.5)
------
Purchase price....................... $ 61.5
======
</TABLE>

(j) The companies expect acquisition-related costs to approximate $5.3
million. Of this amount, approximately $2.2 million relates to the
acquisition of Delta by PPR and has been included in the Delta purchase
price

29
<PAGE>

allocation. The remainder has been reflected in retained earnings in the
June 30, 1999 balance sheet and has been tax affected. The combined company
will charge these costs to earnings in the period in which the acquisitions
are consummated. Total expected acquisition-related costs will be funded by
the new credit facility and therefore are reflected as a long-term
obligation.

Through June 30, 1999, approximately $3.0 million of acquisition costs had
been incurred, of which approximately $2.1 million had been expensed and
$0.9 million related to the Delta acquisition had been capitalized.

(k) Represents the net incremental deferred financing costs resulting from the
replacement of certain existing indebtedness of PPR, Delta and Dakota with
the new credit facility.

(l) Represents the accrual of estimated financing costs relating to the new
credit facility and a prepayment penalty relating to the early
extinguishment of Dakota's existing senior notes.

(m) Represents the balance sheet effect of the exchange of shares of PPR Class
B Common Stock for all of the outstanding common shares of Delta and
Dakota. The acquisition of the non-Pohlad Companies' common equity
interests in Delta is accounted for using the "purchase" method of
accounting and will be reported at fair value.

(n) Represents the effects of acquisition-related costs, net of taxes, and the
adjustment to deferred income taxes.

(o) Represents the step-up to fair value of Delta's senior notes, related to
the proportionate percentage of Delta represented by the non-Pohlad
Companies common equity interest in Delta being acquired.

(p) Represents the reclassification of Delta's preferred stock as a minority
interest of the combined company.

(q) Represents dividends declared on Delta's preferred stock, net of taxes.

(r) Delta and Dakota have a calendar year-end for accounting purposes. The
unaudited pro-forma condensed combined statement of earnings for the year
ended September 30, 1998 includes PPR's statement of earnings for their
fiscal year ended September 30, 1998 and Delta's and Dakota's statements
of earnings for their calendar years ended December 31, 1998. Effective
January 1, 1999, PPR changed its fiscal year-end from September 30 to
December 31. Delta's and Dakota's results for the three months ended
December 31, 1998 are included again in the unaudited pro forma statement
of earnings for the three months ended December 31, 1998.

30
<PAGE>

APPROVAL OF THE ACQUISITIONS

Reasons for the Acquisitions

The Special Committee and PPR's Board of Directors believe that PPR and its
shareholders will benefit from the greater size and strength of PPR resulting
from the acquisitions of Delta and Dakota. If the acquisitions are completed,
PPR believes it will have enhanced operating efficiencies, improved access to
capital and increased buying power. PPR also expects to manufacture,
distribute and market PepsiCo products in exclusive franchise territories that
include Puerto Rico and portions of Arkansas, Iowa, Louisiana, Minnesota,
Mississippi, North Dakota, South Dakota, Tennessee and Texas. At the same time
the acquisitions are completed, based on discussions with PepsiCo, PPR and
PepsiCo are expected to enter into new bottling agreements and PPR is expected
to become a PepsiCo anchor bottler.

In recommending the acquisitions, PPR's Special Committee considered and
evaluated the following factors:

. The advantages to PPR of participating in PepsiCo's previously announced
strategy of consolidating its relationships with a small group of
franchisees to serve as anchor bottlers.

. As one of a small group of PepsiCo anchor bottlers, PPR will enhance its
opportunities for growth and future acquisitions.

. If the acquisitions are completed, PPR expects to manufacture,
distribute and market PepsiCo products in exclusive franchise
territories that include Puerto Rico and portions of nine states.

. Other strategic alternatives such as remaining the same size, growing
through acquisitions, exploring diversification opportunities, and the
advantages and risks of these alternatives.

. The intended federal income tax consequences of the acquisitions.

. The terms and conditions of the exchange agreements, including the
number of shares to be issued in the acquisitions and the
representations, warranties and covenants of the parties.

. The recommendation of the acquisitions by PPR's management.

. The new bottling appointments expected to be entered into with PepsiCo.

. The opinion of Bear Stearns, dated June 28, 1999, that, as of that date,
and based upon and subject to the assumptions, limitations and
qualifications set forth therein, the exchange ratio provided in the
exchange agreements was fair, from a financial point of view, to the
shareholders of PPR. The full text of the Bear Stearns opinion, which
describes the procedures followed, the factors considered and the
assumptions made by Bear Stearns, is attached as Appendix C to this
document. PPR shareholders should read the opinion in its entirety
carefully.

. The results of the due diligence review of Delta and Dakota conducted by
PPR's management and financial advisors.

In analyzing the acquisitions, the Special Committee and PPR's Board of
Directors evaluated the factors described above and consulted with its
financial and legal advisors and with PPR's management. The Special Committee
and PPR's Board of Directors concluded that the various factors discussed
above supported its determination that the acquisitions were advisable and in
the best interests of PPR and its shareholders. In reaching this conclusion,
the Special Committee and PPR's Board of Directors did not assign any relative
or specific values to the considerations and factors described above. Instead,
the Special Committee and PPR's Board of Directors based their recommendations
on the totality of the information and factors presented to and considered by
them.

Background to the Acquisitions

At a meeting on February 17, 1999, in response to PepsiCo's announced
strategy of consolidating its relationships with a small group of franchisees
to serve as anchor bottlers and to provide other possible benefits, PPR's
Board of Directors discussed the possibility of a combination of PPR, Delta
and Dakota.

31
<PAGE>

On April 9, 1999, PPR's Board of Directors adopted a resolution creating the
Special Committee of independent directors of PPR to assess whether it would
be in the best interests of PPR to pursue an acquisition of Delta and Dakota
and to make a recommendation to PPR's Board of Directors regarding such an
acquisition. Messrs. Basil K. Vasiliou and Diego Suarez, Jr. were appointed to
serve as independent directors on the Special Committee. PPR's Board of
Directors authorized the Special Committee to retain, at the expense of PPR,
any advisors, including attorneys, investment bankers, accountants,
appraisers, or other experts as the Special Committee deemed necessary to
assist the Special Committee in carrying out its duties and responsibilities.

Thereafter, the Special Committee discussed the qualifications, experience
and independence of several law firms. The Special Committee engaged Willkie
Farr & Gallagher as independent legal counsel to the Special Committee.
Representatives from Willkie Farr & Gallagher began a legal due diligence
examination of Delta and Dakota.

The Special Committee considered the qualifications, experience and
independence of several financial advisors. On April 14, 1999, the Special
Committee interviewed representatives from two financial advisors to serve as
the independent financial advisor to the Special Committee. The Special
Committee held a telephonic meeting with its legal counsel during which they
discussed these interviews. Moreover, legal counsel updated the Special
Committee on the status of the negotiations of the exchange agreements. On
April 15, 1999, the Special Committee met and discussed the relative
advantages and disadvantages of the candidates for independent financial
advisor to the Special Committee. At this meeting, it was decided that the
Special Committee would retain Bear Stearns as its independent financial
advisor. The Special Committee retained Bear Stearns pursuant to an engagement
letter dated April 28, 1999.

Briggs and Morgan, counsel to Pohlad Companies and Dakota, distributed
drafts, dated April 9, 1999, of the exchange agreements to the Special
Committee and its legal advisors. On April 23, 1999, legal counsel to the
Special Committee distributed to the members of the Special Committee a draft
of the exchange agreements (including comments from legal counsel) and a
memorandum detailing the unresolved issues, including the exchange ratio, open
due diligence items and indemnification from the shareholders of Delta and
Dakota for any breaches of the representations and warranties contained in the
exchange agreements.

In response to negotiations with counsel to the Special Committee, Briggs
and Morgan distributed revised drafts of the exchange agreements to the
Special Committee and its legal advisors.

From April 16, 1999 to May 4, 1999, representatives from Bear Stearns
consulted with senior management ("Management") of PPR, Delta and Dakota, all
of whom are the same individuals, on several occasions in order to conduct
financial due diligence on the companies. Bear Stearns engaged in extensive
discussions with senior management regarding financial results, assumptions,
competition, operations and acquisition opportunities.

On April 26, 1999 and April 27, 1999, representatives from Bear Stearns held
discussions with Arthur Andersen LLP, PPR's independent public accountant, to
discuss tax considerations, accounting treatment and structure of the proposed
acquisitions. Representatives from Bear Stearns also held several discussions
with representatives from NationsBanc Montgomery Securities, financial advisor
to Dakota and Pohlad Companies, regarding the proposed acquisitions.

On May 4, 1999, the Special Committee held a meeting at the offices of Bear
Stearns. Representatives from Bear Stearns distributed draft discussion
materials at this meeting regarding the proposed acquisitions of Delta and
Dakota which included Bear Stearns' preliminary analysis of the combination of
the companies based upon relative contribution, discounted cash flow and
accretion/dilution analyses. At this meeting, the members of the Special
Committee questioned the representatives from Bear Stearns extensively about
the determination of appropriate exchange ratio in the exchange agreements and
the validity of the underlying assumptions for each of the companies used in
the analysis. The members of the Special Committee requested that
representatives from Bear Stearns discuss some of these questions and issues
with NationsBanc. The Special Committee discussed the advantages and
disadvantages to PPR and its shareholders of the proposed acquisitions.

32
<PAGE>

At this meeting on May 4, 1999, legal counsel to the Special Committee
updated the Special Committee on the status of the due diligence examination
and the negotiation of the exchange agreements. Legal counsel informed the
Special Committee that many of the issues from the prior drafts of the
exchange agreements had been resolved satisfactorily, but that there were
remaining unresolved issues, including the exchange ratios and the inclusion
of covenants requiring two independent directors and the approval of
independent directors of certain affiliated transactions.

On May 5, 1999, the Special Committee held another meeting at the offices of
Bear Stearns. The representatives from Bear Stearns informed the Special
Committee that the current proposal provided PPR with 23.3% of the pro forma
combined entity after the acquisitions. The representatives from Bear Stearns
distributed discussion materials to the members of the Special Committee
containing their preliminary analysis of the proposal. The Special Committee
questioned its legal and financial advisors extensively about the preliminary
analysis, the fairness of the 23.3% exchange ratio and the proposed
acquisitions of Delta and Dakota. The Special Committee expressed concern
about the proposed exchange ratio and determined that the exchange ratio
required further assessment.

On May 6, 1999, the Special Committee had a telephonic meeting with the
legal and financial advisors to discuss further the preliminary financial
analysis and their concerns about the contribution of PPR and the proposed
exchange ratio. The members of the Special Committee requested that
representatives from Bear Stearns communicate these concerns to NationsBanc
and Mr. Bierbaum on their behalf.

From May 10, 1999 to May 27, 1999, representatives from Bear Stearns held
numerous follow-up discussions with Management regarding the due diligence
findings, including the business conditions and projected operating results.
Bear Stearns also had conversations with Management about financing capacity
and recent performance of the companies. Moreover, representatives from Bear
Stearns and Mr. Vasiliou had discussions with Mr. Bierbaum regarding the
exchange ratio.

On May 11, 1999, the Special Committee held a telephonic meeting with its
legal and financial advisors to discuss the status of the negotiations. The
Special Committee determined that negotiations should continue and requested
that representatives from Bear Stearns continue discussions with Mr. Bierbaum
regarding the proposed acquisitions and the methodologies used to evaluate the
exchange ratio.

In response to negotiation with counsel to the Special Committee, on May 19,
1999 and May 26, 1999, Briggs and Morgan distributed revised drafts of the
exchange agreements to the Special Committee and its legal counsel.

On May 26, 1999, the Special Committee and its legal and financial advisors
held a meeting at the offices of Bear Stearns. The Special Committee discussed
with its legal and financial advisors the strategic rationale for the proposed
acquisitions. Bear Stearns informed the Special Committee that, based upon the
analysis to date, as currently proposed the exchange ratio was not within
range of fairness from a financial point of view to the shareholders of PPR.
At this same meeting, legal counsel discussed with the members of the Special
Committee their fiduciary duties and responsibilities as directors on the
Special Committee. The Special Committee determined that it could not
recommend the acquisitions on the currently proposed terms and contacted Mr.
Robert Pohlad and Mr. John Bierbaum to propose that the parties meet to engage
in negotiations to try to reach an agreement on acceptable terms.

On June 3, 1999, the Special Committee, along with its legal and financial
advisors, held a lengthy meeting with Mr. Pohlad, Mr. Bierbaum,
representatives from NationsBanc and Briggs and Morgan at the offices of
Willkie Farr & Gallagher. The Special Committee engaged in extensive
questioning with regard to the background and business strategies for the
proposed acquisitions, including the factors listed under the caption "Reasons
for the Acquisitions." The parties engaged in a lengthy discussion about these
reasons for the acquisitions and the assumptions underlying the proposed
exchange ratio. Mr. Pohlad and Mr. Bierbaum also provided to the Special
Committee and Bear Stearns updated financial information for each of PPR,
Delta and Dakota. The Special Committee agreed to consider this information in
its further analysis of the proposed acquisitions.

33
<PAGE>

On June 7, 1999, representatives from Bear Stearns discussed with Arthur
Andersen LLP the tax treatment of certain net operating losses and tax credits
of PPR.

On June 8, 1999, the Special Committee held a telephonic conference call
with its legal and financial advisors. Bear Stearns reported to the Special
Committee that after conducting further analysis, an allocation to PPR in
excess of the then proposed 23.3% of the pro forma entity would be required
for the acquisitions to be fair from a financial point of view to the
shareholders of PPR. On June 9, 1999, representatives from Bear Stearns held a
conference call with Mr. Bierbaum to discuss the financing capacity of the pro
forma entity and the status of PPR's acquisition strategy. On June 10, 1999,
the Special Committee held another telephonic meeting with its legal and
financial advisors to discuss the terms and conditions of the proposed
financing from NationsBanc, N.A. and Banc of America Securities LLC for the
pro forma entity and Bear Stearns' analysis. After deliberation, the Special
Committee determined not to recommend the acquisitions as then proposed to
PPR's Board of Directors. The Special Committee notified Mr. Pohlad of this
decision.

On June 11, 1999, Bear Stearns held a conversation with NationsBanc to
discuss the acquisition analysis, methodology, and financial information of
the companies.

On June 15, 1999, PPR's Board of Directors met in Minneapolis, Minnesota, to
consider the report of the Special Committee. The legal and financial advisors
to the Special Committee attended the meeting at the invitation of PPR's Board
of Directors. Mr. Bierbaum presented to PPR's Board of Directors updated
financial results for each of PPR, Delta and Dakota. Mr. Bierbaum also
reviewed the terms of the proposed Bank of America debt facilities for the pro
forma entity, including the acquisition capacity available under these
facilities. After a lengthy discussion about the strategic reasons for
pursuing the proposed acquisitions, PPR's Board of Directors requested that
further negotiations of the proposed acquisitions occur. Believing in the
strategic benefits of the proposed acquisitions, the Special Committee agreed
to continue to negotiate the exchange ratio.

On June 16, 1999, Mr. Pohlad, who was accompanied by Mr. Bierbaum, met with
the Special Committee in New York at the offices of Vasiliou & Company, Inc.
After negotiation with the Special Committee, Mr. Pohlad proposed that the
exchange ratio be adjusted so that the allocation for PPR in the pro forma
entity be increased to 25%.

On June 17, 1999, Mr. Bierbaum provided the Special Committee and Bear
Stearns with updated projections for PPR, Delta and Dakota prepared by
Management reflecting the latest results of operations.

On June 18, 1999, PPR's Board of Directors held a telephonic meeting with
the Special Committee and its legal and financial advisors. The Special
Committee reported that they unanimously recommended approval of the proposed
acquisitions on the revised terms, subject to the receipt of a fairness
opinion from Bear Stearns, a letter regarding the availability of additional
financing for the pro forma entity and the execution of mutually acceptable
documentation of the acquisitions. PPR's Board of Directors accepted and
approved the recommendation of the Special Committee.

During the period from June 21, 1999 through June 30, 1999, legal advisors
for the Special Committee continued negotiations and eventually reached
agreement on the terms of the definitive exchange agreements, including
covenants requiring two independent directors and independent director
approval on certain transactions with affiliates.

On June 21, 1999, the Special Committee held a telephonic meeting with its
legal and financial advisors at which Bear Stearns informed the Special
Committee that additional financial due diligence was required before Bear
Stearns could render an opinion. On June 22, 1999, representatives from Bear
Stearns held a conference call with Mr. Bierbaum and other members of
Management to conduct this final financial due diligence. On June 23, 1999,
representatives from Bear Stearns also held a conference call with Arthur
Andersen LLP to discuss the tax treatment of net operating losses of Delta.

34
<PAGE>

Subject to the receipt of a certificate from Management stating that the
updated projections for PPR, Delta and Dakota provided to Bear Stearns were
prepared by Management in the ordinary course of business, on June 22, 1999,
Bear Stearns orally delivered its fairness opinion to the Special Committee
(which was followed by a written opinion on June 28, 1999) to the effect that,
based upon the factors and assumptions set forth in such opinion, as of such
date, the exchange ratio was fair, from a financial point of view, to PPR's
shareholders. Mr. Bierbaum delivered the requested certificate to Bear Stearns
on June 25, 1999.

On June 28, 1999 Bear Stearns provided the Special Committee with a
presentation reviewing the acquisitions and final exchange ratio. For a
description of the analysis contained therein, see "Opinion and Analysis of
Financial Advisor to PPR."

On June 28, 1999, a telephonic meeting of PPR's Board of Directors was held.
At that meeting, the Special Committee reported to PPR's Board of Directors
that it had completed an eleven-week long process which involved numerous
meetings of the Special Committee, Bear Stearns and its legal counsel. The
Special Committee reported that it unanimously recommended approval of the
proposed acquisitions on the terms set forth in the draft exchange agreements
which had been circulated in advance of the meeting to all of the members of
PPR's Board of Directors. The members of PPR's Board of Directors and
attendees at the meeting engaged in an extensive discussion of the
acquisitions and the recommendation of the Special Committee. The members of
PPR's Board of Directors and attendees considered the fact that the Bear
Stearns fairness opinion supported the exchange ratio from a financial point
of view to PPR's shareholders. PPR's Board of Directors by unanimous vote
determined that the proposed acquisitions on the terms set forth in the
exchange agreements would be fair, advisable to and in the best interests of
PPR and its shareholders and approved the acquisitions of Delta and Dakota.

On June 25, 1999, PPR issued a press release announcing that it had reached
agreements in principle pursuant to which the shareholders of Delta and Dakota
would receive approximately 65,000,000 shares of PPR Class B Common Stock.
During the course of the next few business days, each of the parties to the
exchange agreements executed the definitive exchange agreements.

As of June 28, 1999, P-PR Transfer, LLP and PPR entered into a voting
agreement. Under the terms of the voting agreement, P-PR Transfer, LLP is
required to vote its shares of PPR Class A Common Stock and PPR Class B Common
Stock in favor of the acquisitions.

On June 28, 1999, to induce the members of PPR's Board of Directors to
continue to serve as directors of PPR and in consideration of the members of
PPR's Board of Directors so serving, PPR agreed to maintain, until the sixth
anniversary of the consummation of the acquisitions and to the extent
commercially available, a directors, officers and company liability policy
with respect to claims arising from facts or events that have occurred or
occur prior to, simultaneously with or after the consummation of the
acquisitions.

Approval and Recommendation of PPR's Board of Directors

PPR's Board of Directors has, upon the recommendation of the Special
Committee, determined that the acquisition of Delta and Dakota through the
issuance of PPR Class B Common Stock under the exchange agreements is fair to,
advisable and in the best interests of PPR's shareholders. PPR's Board of
Directors has also approved the amendment to PPR's Certificate of
Incorporation to increase the number of authorized shares of capital stock,
the amendment to PPR's Certificate of Incorporation to change PPR's name to
PepsiAmericas, Inc. and the adoption of PPR's 1999 Stock Option Plan. PPR's
Board of Directors recommends a vote "FOR" the approval of each proposal.

Opinion and Analysis of Financial Advisor to PPR

The Special Committee retained Bear Stearns to act as its financial advisor
in connection with the acquisitions. Bear Stearns delivered its oral opinion
on June 22, 1999, which was subsequently confirmed in a written opinion, dated
June 28, 1999, to the Special Committee to the effect that, as of the date of
such opinion, and based upon and subject to the assumptions, limitations and
qualifications set forth therein, collectively, the Exchange Ratio

35
<PAGE>

(defined hereafter) was fair, from a financial point of view, to the
shareholders of PPR (the "Bear Stearns Opinion"). However, the Bear Stearns
Opinion has no applicability to P-PR Transfer, LLP. The aggregate number of
shares of PPR Class B Common Stock issued by PPR in exchange for the aggregate
number of shares of common stock of Dakota and Delta is hereinafter the
"Exchange Ratio."

The full text of the Bear Stearns Opinion, which sets forth a description of
the assumptions made, general procedures followed, matters considered and
limitations on the review undertaken, is set out in Appendix C. Holders of PPR
common stock are urged to read the Bear Stearns Opinion carefully in its
entirety, especially with regard to the assumptions made and matters
considered by Bear Stearns, as well as the limitations on the information
considered and analysis presented. The summary of the Bear Stearns Opinion set
forth in this document is qualified in its entirety by reference to the full
text of such opinion.

The Bear Stearns Opinion, intended for the benefit and use of the Special
Committee, did not constitute a recommendation to the Special Committee in
connection with the acquisitions and does not constitute a recommendation to
any holder of PPR common stock as to how to vote shares in connection with the
acquisitions. Bear Stearns is not expressing any opinion as to the price or
range of prices at which PPR common stock may trade subsequent to the
consummation of the acquisitions. The Bear Stearns Opinion is necessarily
based upon economic, market and other conditions, and the information made
available to it, as of the date of such opinion.

The Exchange Ratio and the form of consideration were determined by
negotiations between the Special Committee and its representatives, on the one
hand, and Pohlad Companies and its representatives, on the other hand, and
were not based on any recommendation by Bear Stearns. Except as noted below,
no limitations were imposed by PPR on Bear Stearns with respect to the
investigations made or the procedures followed by Bear Stearns in rendering
the Bear Stearns Opinion.

In arriving at the Bear Stearns Opinion, Bear Stearns, among other things:

. reviewed the draft Delta Exchange Agreement and draft Dakota Exchange
Agreement;

. reviewed PPR's Annual Reports on Form 10-K for the fiscal years ended
September 30, 1996 through 1998 and the three months ended December 31,
1998, and its Quarterly Report on Form 10-Q for the period ended March
31, 1999;

. reviewed Delta's Annual Reports on Form 10-K for the fiscal years ended
December 31, 1996 through 1998, and its Quarterly Report on Form 10-Q
for the period ended March 31, 1999;

. reviewed Dakota's audited financial statements for the fiscal years
ended December 31, 1996 through 1998, and its quarterly unaudited
financial statements for the period ended March 31, 1999;

. reviewed certain operating and financial information, including
projections (which projections were updated during the course of such
review (the "Projections")), provided to Bear Stearns by Management of
PPR, Delta, and Dakota, all of whom are the same individuals, relating
to the respective businesses and prospects;

. met with certain members of Management to discuss the operations,
historical financial statements and future prospects of PPR, Delta and
Dakota;

. reviewed, and discussed with Management, combination benefits expected
to result from the acquisitions;

. reviewed with Management and their tax advisors the status of NOLs and
other tax credits at PPR and Delta and the effect of the acquisitions on
such;

. reviewed certain historical prices, trading volumes and valuation
parameters of PPR common stock;

. reviewed certain publicly available financial data, stock market data
and valuation parameters of companies which in Bear Stearns' judgement
were deemed generally comparable to PPR, Delta and Dakota or otherwise
generally relevant;

36
<PAGE>

. reviewed the financial terms, to the extent publicly available, of
certain similar merger and acquisition transactions which in Bear
Stearns' judgment were deemed generally relevant; and

. conducted such other studies, analyses, inquiries and investigations as
were deemed appropriate, but none of which was individually material.

In connection with its review, Bear Stearns did not assume any
responsibility for, and did not undertake any independent verification of, any
of the information reviewed by or provided to it and relied on its being
complete and accurate in all material respects. Bear Stearns did not make or
receive any independent evaluation or appraisal of any of the assets or
liabilities (contingent or otherwise) of PPR, Delta or Dakota, nor was Bear
Stearns furnished with any such evaluation or appraisal. Additionally, at the
direction of the Special Committee, Bear Stearns did not evaluate the fairness
of each of the acquisitions separately.

With respect to the financial forecasts, estimates, Projections, pro forma
financial effects, and contemplated tax and accounting impacts relied upon or
provided to Bear Stearns, Bear Stearns assumed that they had been reasonably
prepared on a basis reflecting the best currently available estimates and
judgments of Management as to the future performance of PPR, Delta and Dakota
and that they will be achieved in the amounts and at the times specified
therein. Therefore, Bear Stearns did not make any independent assessment of
the assumptions contained therein. Bear Stearns assumed that: (a) PPR, Delta
and Dakota will comply with all the material terms and conditions of the draft
exchange agreements and all applicable laws and regulations; (b) the
acquisitions become effective in accordance with the terms of the draft
exchange agreements and that the acquisitions are approved in such a manner
that PPR acquires 100% of the outstanding common shares of Delta and Dakota;
and (c) the acquisitions will be accounted for as a combination of entities
under common control under United States generally accepted accounting
principles. Bear Stearns has also relied upon the representations of
Management regarding the tax treatment of the acquisitions and the ability to
utilize the NOLs and other tax credits at PPR and Delta subsequent to the
acquisitions. Other than as described herein, the Special Committee did not
place any limitations upon Bear Stearns regarding the procedures to be
followed and the factors to be considered in rendering the Bear Stearns
Opinion.

In arriving at the Bear Stearns Opinion, Bear Stearns did not assign any
particular weight to any analysis or factor considered by it, but rather made
qualitative judgments based upon its experience in providing such opinions and
on then existing economic, market and other conditions as to the significance
of each analysis and factor. Bear Stearns believes that its analyses must be
considered as a whole and that selecting portions of its analyses and the
factors considered, without considering all of the analyses and factors, could
create a misleading or incomplete view of the processes underlying the Bear
Stearns Opinion. Any assumed estimates implicitly contained in the Bear
Stearns Opinion or relied upon by Bear Stearns in rendering the Bear Stearns
Opinion, are not necessarily reflective of actual values or predictive of
future results or values, which may be significantly more or less favorable
than as set forth therein. Any estimates relating to the value of a business
or securities do not purport to be appraisals or necessarily reflect the
prices at which companies or securities may actually be sold.

Bear Stearns is an internationally recognized investment banking firm which,
as part of its investment banking business, regularly engages in the
evaluation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive bids, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. The Special Committee
selected Bear Stearns on the basis of its experience and independence. In the
ordinary course of business, Bear Stearns and its affiliates may actively
trade or hold the equity securities of PPR or the debt securities of Delta for
their own account or the accounts of their customers and, accordingly, may at
any time take a long or short position in such securities.

Pursuant to the engagement letter between PPR and Bear Stearns dated April
28, 1999, PPR agreed to pay Bear Stearns: (a) an initial cash fee of $200,000;
(b) $400,000 at the time of rendering the Bear Stearns Opinion, and (c) a
success fee of $400,000, payable upon the consummation of the acquisitions.
PPR has also agreed to reimburse Bear Stearns for its reasonable out-of-pocket
expenses, including the reasonable fees and disbursements

37
<PAGE>

of counsel (not exceeding $25,000 without the prior written consent from PPR,
which consent shall not be unreasonably withheld), and to indemnify Bear
Stearns and certain related persons against certain liabilities in connection
with the engagement of Bear Stearns, including certain liabilities under
federal securities law.

The following is a summary of the material financial and comparative
analyses performed by Bear Stearns in arriving at the Bear Stearns Opinion
dated June 28, 1999. In rendering its opinion, Bear Stearns analyzed the
acquisitions as a combination of interests under common control, wherein there
is no clear acquirer or target company and control of PPR does not change.
Accordingly, Bear Stearns did not review or analyze the acquisitions based on
acquisition multiples and purchase price premiums.

Relative Contribution Analysis. Bear Stearns analyzed PPR's contribution to
combined projected net income and net cash flow (for this purpose, net cash
flow is defined as net income plus amortization, "Net Cash Flow") to result
from the acquisitions before combination benefits for the projected years 1999
to 2003 (the "Relative Contribution Period"). Based on the Projections, this
analysis indicated that over the Relative Contribution Period, PPR contributed
11.5% to 21.5% to projected net income before combination benefits. In
addition, this analysis also indicated that over the Relative Contribution
Period, PPR contributed 9.8% to 19.0% to projected Net Cash Flow before
combination benefits. Based on the Exchange Ratio, PPR's current shareholders
would own 25.0% of the combined pro forma equity of PPR, Delta and Dakota.
Bear Stearns also calculated the relative contribution of PPR to combined
projected net income and Net Cash Flow adjusting for NOLs at Delta over the
Relative Contribution Period. This adjustment resulted in lower contribution
ranges for PPR.

Discounted Cash Flow Analysis and Relative Contribution. Bear Stearns
performed a discounted cash flow analysis on the after-tax cash flows of PPR
and Delta/Dakota combined ("Delta/Dakota") based on the Projections. After-tax
cash flows for the five-year period beginning January 1, 1999 and ending on
December 31, 2003 were calculated as after-tax earnings before interest,
depreciation and amortization less changes in working capital and capital
expenditures. Bear Stearns calculated a terminal value by applying a 9.0x
multiple to projected 2003 EBITDA (for this purpose, EBITDA is defined as
operating income plus depreciation and amortization). In addition, Bear
Stearns compared the expected perpetual growth rates in after-tax cash flow
with those implied by the selected multiple.

Bear Stearns' determination of the appropriate EBITDA multiple was based on
an analysis of selected publicly-traded bottling companies with growth rates
generally similar to PPR and Delta / Dakota's projected growth rates at the
end of the projection period. Using publicly available information, Bear
Stearns analyzed Pepsi Bottling Group, Inc., Whitman Corp., Coca-Cola
Enterprises Inc., Coca-Cola Beverages P.L.C., Pepsi-Gemex, S.A. de C.V.,
Panamco Beverages, Inc., Coca-Cola FEMSA, S.A. de C.V., and Embotelladora
Andina, S.A. (collectively, the "Generally Comparable Companies"). The
Generally Comparable Companies were selected based on general business,
operating and financial characteristics representative of cola bottlers. The
range of multiples for the Generally Comparable Companies of enterprise value
(defined as the market value of equity plus minority interest plus the market
value of debt and preferred stock, net of cash, "Enterprise Value") to 1998
actual and estimated 1999 EBITDA was 8.7x to 13.2x and 8.2x to 13.7x,
respectively. Bear Stearns believes Pepsi Bottling Group, Inc. and Whitman
Corp. (collectively, the "Comparable Pepsi Companies") are the more relevant
comparable companies to PPR and Delta/Dakota. The range of multiples for the
Comparable Pepsi Companies of Enterprise Value to 1998 actual and estimated
1999 EBITDA was 9.0x to 10.0x and 8.2x to 8.4x, respectively. The multiples
for the Generally Comparable Companies and the Comparable Pepsi Companies are
based on closing stock prices on June 18, 1999 (except for Coca-Cola Beverages
P.L.C. which is as of June 15, 1999 given the merger announcement with
Hellenic Bottling Co. on June 16, 1999), and the latest public financial
statements and the most recent public equity research reports that contained
projections for EBITDA available to Bear Stearns on June 18, 1999.

A discount rate of 10.75% was used for Delta/Dakota based on "normalized"
capital structures consistent with the Comparable Pepsi Companies. For PPR,
Bear Stearns utilized a range of discount rates of 10.75% to 16.75% based on a
0% to 10% additional equity premium, respectively, to that of Delta/Dakota.

38
<PAGE>

Based on the resulting enterprise values for PPR and Delta/Dakota
(discounting all cash flows back to January 1, 1999), Bear Stearns calculated
the implied equity values for each company/group by adjusting the respective
enterprise values by December 31, 1998 net debt balances, preferred stock
balances and minority ownership positions. Bear Stearns then calculated PPR's
relative contribution to the combined pro forma equity value of PPR and
Delta/Dakota to be 20.4% to 25.5%. Based on the Exchange Ratio, PPR's current
shareholders would own 25.0% of the combined pro forma equity of PPR and
Delta/Dakota. Bear Stearns also calculated the relative contribution of PPR to
the combined pro forma equity value of the combined company adjusting for NOLs
at Delta. This adjustment resulted in a lower contribution range for PPR of
19.9% to 24.9% of the combined pro forma equity of PPR and Delta/Dakota.

Analysis of Pro Forma Accretion/Dilution. Bear Stearns also noted that using
the Exchange Ratio, the completion of the acquisitions, before consideration
of combination benefits, results in pro forma net income per PPR share
accretion of 103.3% to 12.7% for the projected years 2000 to 2003,
respectively; and Net Cash Flow per PPR share accretion of 155.3% to 31.6% for
the projected years 2000 to 2003, respectively. Bear Stearns also calculated
the pro forma net income and Net Cash Flow per PPR share adjusting for
financing synergies following the acquisitions. Including these adjustments,
results in pro forma net income per PPR share accretion of 115.4% to 26.8% for
the projected years 2000 to 2003, respectively; and Net Cash Flow per PPR
share accretion of 165.7% to 45.2% for the projected years 2000 to 2003,
respectively. Given PPR's projected 1999 net income and Net Cash Flow losses,
the completion of the acquisitions is highly accretive in that year.

Closing

The exchange agreements provide that, unless otherwise agreed and assuming
all conditions have been satisfied or waived, the closing of the acquisitions
will be held as soon as practicable following the date on which all required
approvals are received and any required waiting periods have expired.

If the issuance of stock is approved by the requisite vote of PPR
shareholders and all other conditions of the exchange agreements are satisfied
or waived, the acquisitions will be completed. The exchange agreements may be
terminated by any party if, among other things, the acquisitions are not
completed on or before November 30, 1999. See "The Delta Exchange Agreement --
Termination of the Agreement" and " -- Waiver under the Agreement" and "The
Dakota Exchange Agreement -- Termination under the Agreement" and "Waiver
under the Agreement."

Dissenters' Rights

Neither PPR, Delta nor Dakota shareholders will have any dissenters' or
appraisal rights.

Certain Federal Income Tax Consequences

The acquisitions have been structured so that PPR shareholders will not
recognize any gain or loss for federal income tax purposes.

Accounting Treatment

Because PPR, Delta and Dakota are each, directly or indirectly, controlled
by Pohlad Companies, the transactions will be accounted for as a combination
of entities under common control. Accordingly, the common equity interests of
Delta and Dakota owned by Pohlad Companies (representing 23.2% of Delta and
100% of Dakota) will be combined with PPR at historical cost whereas the other
common equity interests of Delta that are acquired in the transactions will be
reported at fair value.

Under this form of combination, all of the assets and liabilities of Dakota
and the proportionate share of the assets and liabilities of Delta represented
by the economic interests owned by Pohlad Companies will be carried forward to
PPR at their historical recorded bases. The non-Pohlad Companies' common
equity interests in Delta

39
<PAGE>

(i.e., the minority interests in Delta) will be acquired at fair value and be
accounted for using the "purchase" method of accounting for a business
combination. Results of operations of PPR will include the results of PPR,
Delta and Dakota for the entire fiscal year in which the combination occurs,
with the minority interests in Delta reported separately during the period
prior to the consummation date. The reported balance sheet amounts and results
of operations of the separate companies for prior periods will be restated, as
appropriate, to reflect the combined financial position and results of
operations for PPR, again with the minority interests in Delta reported
separately during the period prior to the consummation date. Refer to the
unaudited pro forma condensed combined financial statements for an
illustration of the form of reporting of the common control combination.

Interests of Certain Persons in the Acquisitions

PPR will acquire Delta from various parties, including Pohlad Companies and
Metropolitan.

Pohlad Companies and Metropolitan, an affiliate of PepsiCo, will transfer
their Delta common stock to Dakota, LLC, subject to their respective rights
and obligations under the Delta Exchange Agreement. Pohlad Companies currently
holds a 33.1% economic interest in PPR and 52.8% voting power over PPR. Pohlad
Companies also has voting control over Delta and Dakota. Under the Delta
Exchange Agreement, Pohlad Companies and Metropolitan will exchange their
ownership interests in Delta for shares of PPR Class B Common Stock. Pohlad
Companies owns 12,037.87 shares of Delta common stock for which it will
receive 4,139,078 shares of PPR Class B Common Stock. Metropolitan owns
3,221.57 shares of Delta common stock for which Metropolitan will receive
1,107,698 shares of PPR Class B Common Stock. Accordingly, Dakota, LLC will
receive PPR common stock directly from PPR in connection with the Delta
exchange.

PPR will acquire Dakota from Pohlad Companies and PepsiCo.

Pohlad Companies will contribute all of its DakBev Membership Units and its
interest in P-PR Transfer, LLP to Dakota, LLC. Metropolitan, an affiliate of
PepsiCo, will contribute shares of capital stock of PepsiCo to Dakota, LLC.
BFSI will contribute its interest in P-PR Transfer, LLP to Dakota, LLC.
Dakota, LLC will then exchange its DakBev Membership Units for 46,760,000
shares of PPR Class B Common Stock contemporaneously with the consummation of
the Delta exchange.

PepsiCo is expected to enter into new franchise agreements with PPR.

The existing franchise agreements between PepsiCo and PPR, Delta and Dakota
are expected to be replaced by new franchise agreements. See "The Franchise
Agreements."

Certain officers and directors of PPR have interests in the acquisitions.

Certain of PPR's executive officers and PPR's Board of Directors have
interests in the acquisitions that are in addition to the interests of PPR
shareholders generally.

. Robert C. Pohlad is Chairman, Chief Executive Officer and a director of
PPR, a director, President and Chief Executive Officer of Pohlad
Companies and Chief Executive Officer and a director of Delta. As a
result of the acquisitions, Pohlad Companies' ownership interest in PPR
will increase substantially. See "Summary -- The Acquisitions."

. Kenneth E. Keiser is President and Chief Operating Officer of PPR, Delta
and Dakota.

. John F. Bierbaum is Chief Financial Officer of PPR, a director and Chief
Financial Officer of Delta, Chief Financial Officer of Dakota and Chief
Financial Officer of Pohlad Companies.

. Bradley J. Braun is an executive officer of PPR, vice-president, finance
and assistant secretary of Delta and has served as controller of Dakota.

. Jay S. Hulbert is an executive officer of PPR and vice president of
operations of Delta.

. Raymond R. Stitle is an executive officer of PPR and vice president,
human resources of Delta.

. Christopher E. Clouser is a director of both PPR and Delta.

. Philip N. Hughes is a director of both PPR and Delta.

. Michael D. White, who is a director of PPR, is Senior Vice President and
Chief Financial Officer of PepsiCo.

40
<PAGE>

. John F. Woodhead is a director of both PPR and Delta and has provided
management consulting services to Dakota.

. Raymond W. Zehr is a director of PPR and has acted in various capacities
with Pohlad Companies, including vice president.

Indemnification letter.

PPR has agreed to maintain, until the sixth anniversary of the acquisitions,
a directors, officers and company liability insurance policy. However, PPR is
only required to pay premiums for such insurance in an amount up to 150% of
the current annual premiums paid by PPR for such insurance. Each PPR director
at the date of the execution of the indemnification letter will continue to be
covered regardless of whether such director remains on the PPR Board of
Directors.

Voting agreement.

P-PR Transfer, LLP through which Pohlad Companies and PepsiCo own a majority
of the voting power of the PPR common stock, has entered into a voting
agreement with PPR. Under the terms of the voting agreement, P-PR Transfer,
LLP is required to vote its shares of PPR common stock in favor of the
acquisitions and the transactions contemplated by the Exchange Agreements,
including the proposals to amend PPR's Certificate of Incorporation to
increase the number of authorized shares of PPR capital stock and to change
PPR's name. Assuming P-PR Transfer, LLP complies with their obligations under
the voting agreement, the passage of the proposal to issue 65,070,006 shares
of PPR Class B Common Stock to Delta and Dakota shareholders is assured.

Ownership of PPR after the acquisitions.

After the consummation of the acquisitions, based on the number of shares of
PPR common stock outstanding on August 31, 1999, Pohlad Companies directly or
indirectly will hold 3,200,000 shares of PPR Class A Common Stock and
37,255,000 shares of PPR Class B Common Stock, representing 51.9% of the
voting power of PPR in the aggregate. The acquisitions will not result in a
change in control of PPR because Pohlad Companies currently holds 52.8% of the
voting power of PPR.

Expected changes to the management agreements.

As described below under "Certain Relationships and Related Transactions,"
Pohlad Companies has provided management services to PPR, Delta and Dakota
pursuant to management agreements with each of these entities. In connection
with PPR's acquisition of Delta and Dakota, Pohlad Companies expects to amend
the Delta management agreement, to terminate the Dakota management agreement
and to cause PPR to pay the salaries and bonuses of certain of PPR's executive
officers.

Pohlad Companies expects to decrease the annual base fee payable under the
Delta management agreement to $250,000 from $500,000. Such fee will escalate
each year with increases in Delta's gross revenue. Pohlad Companies expects to
terminate the Dakota management agreement pursuant to which Dakota paid Pohlad
Companies approximately $2.6 million in calendar year 1998. Following PPR's
acquisition of Delta and Dakota, Pohlad Companies expects that PPR will pay
directly the salaries and bonuses of certain of PPR's executive officers,
including Robert C. Pohlad, John F. Bierbaum and Kenneth E. Keiser.
Previously, these officers were paid by Pohlad Companies from fees collected
under the management agreements. Pohlad Companies estimates that the salaries
and bonuses paid to such officers in calendar year 1998 aggregated
approximately $1.2 million.

Consequences of elimination of phantom plans.

As described below under "Adoption of the 1999 Stock Option Plan-New Plan
Benefits," certain executive officers and directors of the combined entity
will be issued options to purchase an aggregate of 402,213 shares of PPR Class
B Common Stock in consideration of the cancellation of rights previously
granted under phantom stock plans of Delta and Dakota. Such persons will also
be issued 491,593 shares of PPR Class B Common Stock in consideration of such
cancellation. The following executive officers and directors of PPR will
receive options and shares in connection with the elimination of the phantom
plans: John F. Bierbaum, Kenneth E. Keiser, Bradley J. Braun, Jay S. Hulbert,
Raymond R. Stitle and John F. Woodhead.

41
<PAGE>

THE DELTA EXCHANGE AGREEMENT

The Agreement

The Delta Exchange Agreement provides for the issuance by PPR of 18,310,006
shares of PPR Class B Common Stock to the holders of Delta common stock in
exchange for their Delta shares. Delta will become a subsidiary of PPR as set
forth in "Summary - The Acquisitions." The Delta Exchange Agreement is set
forth in Appendix A to this document.

Representations and Warranties

The Delta Exchange Agreement contains certain customary mutual
representations and warranties by PPR and Delta relating to, among other
things, the following:

. Corporate existence, good standing, corporate power and similar
corporate matters;

. Capital structure and corporate authority, execution, delivery and
performance and the enforceability of the Delta Exchange Agreement and
related matters;

. The absence of conflicts, violations and defaults under Certificates or
Articles of Incorporation and Bylaws and certain other agreements and
documents;

. The absence of required consents, approvals, orders or authorizations
of, or registration, declaration or filing with certain governmental
entities;

. Financial statements and other documents and reports filed with the SEC
by PPR and Delta and the accuracy and completeness of the information
contained therein;

. The absence of certain material changes or events with respect to PPR
and Delta since December 31, 1998;

. Permits, franchises, licenses, etc. to own, lease and operate property
or to carry on the business currently being conducted;

. Certain tax, employee benefit and labor matters;

. The absence of pending or threatened legal proceedings;

. The absence of any oral or written agreements or plans whose benefits
would be changed as a result of the acquisitions;

. Compliance with environmental laws;

. With respect to Delta, Delta's indebtedness;

. Ownership and use of intellectual property;

. Ownership of and title to real and personal property, title insurance
and zoning;

. Broker's or finder's fees and expenses;

. Relationships with customers and suppliers;

. Compliance with quality standards;

. Implementation of a Year 2000 compliance plan;

. With respect to PPR, PPR having obtained, or obtaining prior to closing,
all approvals necessary to constitute prior approval by PPR's Board of
Directors within the meaning of Delaware General Corporation Law; and

. The absence of untrue statements or omissions of material facts.

42
<PAGE>

The Delta Exchange Agreement contains certain customary representations and
warranties by the Delta shareholders relating to the following:

. Ownership of shares, encumbrances, and execution and delivery of the
exchange agreement;

. Lack of breach or default with respect to the charter or organizational
documents or any contracts or agreements by which the Delta shareholders
are bound;

. The absence of required consents, authorization, registration,
declaration or filings with respect to the transactions contemplated by
the Delta Exchange Agreement;

. Entire ownership of Delta stock or equity interest in Delta;

. Accredited investor status;

. Acknowledgment that the shares of PPR Class B Common Stock to be issued
in the exchange have not been registered under the Securities Act
pursuant to exemptions from the Securities Act and acknowledgment that
PPR's reliance on such exemptions is predicated on Delta shareholders'
representations in the Delta Exchange Agreement; and

. Restrictions on transfer.

Conduct of Business Pending the Exchange

Under the Delta Exchange Agreement, PPR has agreed that, during the period
from the date of the Delta Exchange Agreement and continuing until the closing
date, except as permitted by the Delta Exchange Agreement or the prior written
consent of Delta, PPR will not:

. Declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions payable in cash, shares, stock,
securities or property in respect of, any of its capital stock, or
otherwise make any payments to its stockholders in their capacity as
such (other than dividends and other distributions by PPR subsidiaries
including dividends on outstanding shares of non-voting management stock
of Beverage Plastics Company, a Delaware corporation, in the ordinary
course of business and consistent with past practice);

. Other than in the case of any PPR subsidiary, subdivide, split, combine
or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;

. Purchase, redeem or otherwise acquire any shares of capital stock of PPR
or any other securities thereof or any rights, warrants or options to
acquire, directly or indirectly, any such shares or other securities;

. Sell or encumber any shares of its capital stock, or amend the terms of
any option, warrant or convertible security, except for the grant of
stock options to employees of PPR or any of the PPR subsidiaries under
PPR's stock option plans and the issuance of shares of PPR common stock
pursuant to the exercise thereof in the ordinary course of business, the
issuance of PPR common stock pursuant to outstanding warrants and the
issuance of PPR common stock as consideration for the Dakota
acquisition, and acquisitions which do not exceed $50 million
individually or $100 million in the aggregate;

. Amend its Certificate of Incorporation or Bylaws; provided, however that
PPR shall amend its Certificate of Incorporation to increase the
authorized shares of PPR Class B Common Stock;

. Acquire or agree to acquire any business organization or division
thereof or any assets other than in the ordinary course of business,
except for the Dakota Acquisition, and acquisitions which do not exceed
$50 million individually or $100 million in the aggregate;

. Sell, lease, or otherwise dispose of any assets other than in the
ordinary course of business that is not material;

43
<PAGE>

. Incur or guarantee any indebtedness, or make loans or other investments
in any other person, other than in the ordinary course of business,
between PPR and any of the PPR subsidiaries, or as necessary to fund
certain permitted acquisitions, including amendments to existing loan
documents with Banco Popular necessary to extend the facility to $40
million and replace Banco Popular as primary lender with NationsBanc;

. Enter into or amend or adopt any severance, employment, or consulting
agreement, other than as required by law;

. Knowingly violate or fail to perform any material obligation imposed by
any applicable law;

. Take any unreasonable or unusual action with respect to accounting
policies or procedures;

. Enter into any other material transaction or make any other capital
expenditure not in the ordinary course of business, except as set forth
in PPR's 1999 Capital Expenditure Budget; or

. Authorize, recommend or announce an intention to do any of the
foregoing, or enter into any contract or arrangement to do any of the
foregoing.

Under the Delta Exchange Agreement, Delta has agreed that, during the period
from the date of the Delta Exchange Agreement and continuing until the closing
date, except as permitted by the Delta Exchange Agreement or the prior written
consent of PPR, Delta will not, and will not permit any of the Delta
subsidiaries to:

. Other than in the case of any Delta subsidiary, subdivide, split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;

. Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Delta or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;

. Issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock (other than the issuance of additional
shares of Delta Preferred Stock Series AA as payment-in-kind for the
quarterly dividends payable on shares of outstanding Delta Preferred
Stock Series AA), any other voting securities or equity equivalent or
any securities convertible into, or any rights, warrants or options to
acquire any such shares, voting securities, equity equivalent or
convertible securities, or agree to any amendment to the terms of any
option, warrant or convertible security;

. Amend its charter or bylaws;

. Acquire or agree to acquire by merging or consolidating with, or by
purchasing a portion of the assets of or equity in, or by any other
manner, any business or any corporation, partnership, limited liability
company, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets other than
transactions that are in the ordinary course of business consistent with
past practice and that are not material;

. Sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than transactions that
are in the ordinary course of business consistent with past practice and
not material to Delta and the Delta subsidiaries taken as a whole;

. Incur any indebtedness in excess of that permitted under existing credit
facilities for borrowed money, guarantee any such indebtedness or make
any loans, advances or capital contributions to, or other investments
in, any other person, other than (i) indebtedness for borrowed money
incurred in the ordinary course of business consistent with past
practice (including but not limited to the issuance of additional notes
as payment-in-kind for accrued interest on Delta's 11% subordinated
notes due

44
<PAGE>

December 23, 2003 as set forth a certain Note Exchange Agreement dated
as of September 23, 1993 by and among Delta and the noteholders set
forth on Schedule 1 thereto), and (ii) indebtedness, loans, advances,
capital contributions and investments between Delta and any of the Delta
subsidiaries;

. Alter (through merger, liquidation, reorganization, restructuring or in
any other fashion) the corporate structure or ownership of Delta;

. Enter into or adopt, or amend any existing, severance plan, agreement or
arrangement or enter into or amend any Delta plan or employment or
consulting agreement, other than as required by law;

. Knowingly violate or knowingly fail to perform any material obligation
or duty imposed upon it or any Delta subsidiary by any applicable
material federal, state or local law, rule, regulation, guideline or
ordinance;

. Take any action, other than reasonable and usual actions in the ordinary
course of business consistent with past practice, with respect to
accounting policies or procedures (other than actions required to be
taken by GAAP);

. Except as set forth on Delta's 1999 Capital Expenditure Budget, enter
into any other material transaction or make any other capital
expenditure not in the ordinary course of business consistent with pasty
practice; or

. Authorize, recommend, propose or announce an intention to do any of the
foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.

Conditions Precedent to the Exchange

The respective obligations of the parties to effect the Delta Exchange
Agreement are subject to the fulfillment at or prior to the closing of the
following conditions, each of which may be waived only with the consent in
writing of the other parties:

. Approval by PPR shareholders of the Delta Exchange Agreement and the
acquisitions contemplated thereby, including the share issuance, the
exchange, the PPR charter amendments and PPR's 1999 Stock Option Plan;

. Listing on the NYSE of the PPR Class B Common Stock issuable in the
exchange;

. No legal restraints to, or litigation, law, rule, decree or order
affecting, the exchange which would have a material adverse effect;

. Receipt of all necessary governmental approvals;

. The consummation of the Dakota acquisition;

. The new credit facility has been obtained; and

. All Delta shareholders have executed a lock-up agreement prohibiting the
sale of the PPR Class B Common Stock issued under the Delta Exchange
Agreement for a period of six months following the closing.

The obligations of PPR to effect the Delta Exchange Agreement are subject to
the fulfillment at or prior to the date of closing of the following additional
conditions, each of which may be waived by PPR in writing:

. The delivery of certificates signed on behalf of each of Delta, by its
Chief Executive Officer and Chief Financial Officer to the effect that
Delta has performed all agreements contained in the Delta Exchange
Agreement required to be performed, and that each of the representations
and warranties of Delta contained in the Delta Exchange Agreement is
true as of the closing date;

. All required consents, waivers, approvals and authorizations have been
obtained;

45
<PAGE>

. PPR shall have received an opinion of counsel to Delta stating that
Delta is duly organized, validly existing and in good standing under the
laws of Delaware; and

. The representations and warranties of Dakota and Pohlad Companies
contained in the Dakota Exchange Agreement shall be true and correct in
all material respects.

The obligations of the Delta shareholders to effect the Delta Exchange
Agreement are subject to the fulfillment at or prior to the closing of the
following additional conditions, each of which may be waived by the Delta
shareholders in writing:

. The delivery of a certificate signed on behalf of PPR by its Chief
Executive Officer and its Chief Financial Officer to the effect that PPR
has performed all agreements contained in the Delta Exchange Agreement
required to be performed, and that each of the representations and
warranties of PPR contained in the Delta Exchange Agreement is true as
of the closing date;

. The delivery of an opinion of counsel stating that the PPR Class B
Common Stock to be issued in the exchange has been duly authorized and
validly issued, is not subject to further assessment, and has been
issued pursuant to applicable exemptions from registration under the
Securities Act;

. The Registration Rights Agreement has been executed and delivered to
Pohlad Companies by PPR;

. All necessary consents, waivers, approvals and authorizations have been
obtained;

. Delta's receipt of a waiver of the ownership requirement through
December 31, 1999 from Miller Brewing Company;

. Payment in full of the Delta Subordinated Notes;

. Receipt by those Delta shareholders who exchanged their stock for PPR
Class B Common Stock of a tax opinion regarding the tax-free treatment
of the exchange; and

. Amendment of Delta's Certificate of Incorporation.

Additional Agreements Provided in the Agreement

The Delta Exchange Agreement also provides for certain other agreements
between the parties, including the following:

. PPR shall call a meeting of its shareholders for the purpose of: (a)
approving the acquisitions contemplated by the Delta Exchange Agreement,
(b) approving an increase in the number of authorized shares of PPR
Class B Common Stock to 145,000,000 shares, (c) authorizing additional
shares for stock options, and (d) approving such other matters as PPR's
Board of Directors shall determine;

. Delta and PPR shall promptly (and in no event more than ten days) after
the date of execution, order from a title company reasonably acceptable
to the other a title insurance commitment or commitments with respect to
all of the real property owned by Delta and PPR, as the case may be,
other than those properties for which the owner already has title
insurance;

. Within 30 days after the closing date, PPR shall prepare and file with
the SEC a registration statement on Form S-3 for the purpose of
registering for resale by the Delta shareholders, or their assigns, the
shares of PPR Class B Common Stock issued in the exchange;

. Through the effective date of the registration statement, PPR and Delta
shall afford the consultants, accountants, counsel, financial advisors
and other representatives of PPR and Delta reasonable access to their
properties;

. PPR and Delta shall, and shall cause the PPR and Delta subsidiaries to,
furnish promptly to the other, prior to the effective date of the
registration statement, any documents filed pursuant to federal and
state

46
<PAGE>

securities laws and all other information concerning its business,
properties and personnel as the other may request;

. PPR shall use reasonable best efforts to obtain a credit facility of up
to $160 million on terms reasonably acceptable to PPR;

. PPR shall use reasonable best efforts to cause the shares of PPR Class B
Common Stock to be issued in connection with the Delta Exchange
Agreement to be approved for listing on the NYSE;

. All costs and expenses incurred in connection with the Delta Exchange
Agreement shall be paid by the party incurring the costs and expenses,
except PPR shall pay all expenses incurred by PPR in connection with the
registration and listing of shares issued to the Delta shareholders
pursuant to the Delta Exchange Agreement, and the Delta shareholders
receiving PPR Class B Common Stock shall pay all underwriting discounts,
fees and expense of counsel, and selling commissions applicable to the
shares they receive, in proportion to the number of shares of PPR Class
B Common Stock they sell;

. Delta shall provide, within 30 days after closing, written notice of the
consummation of the acquisitions to the holders of 9 3/4% senior notes
due 2003 as required in the Delta Exchange Agreement, and advise such
holders of their right to require Delta to redeem their notes at 101% of
par;

. PPR and Delta agree to use reasonable best efforts to take all actions
necessary to consummate the exchange;

. Each Delta shareholder agrees to cooperate with PPR and/or Delta to the
extent necessary to consummate the exchange;

. Delta and PPR shall consult with each other prior to issuing any press
release or public announcement with respect to the exchange and the
other acquisitions contemplated by the Delta Exchange Agreement, except
as may be required by law or by obligations pursuant to any listing
agreement with or rules of the NYSE;

. If any state takeover law shall become applicable to the acquisitions,
PPR and Delta shall use their reasonable best efforts to take such
actions necessary so that the acquisitions may be consummated promptly;

. From and after the closing, PPR agrees to indemnify and hold harmless
all past and present officers and directors of Delta to the maximum
extent permitted by the Delaware General Corporate Law;

. Each of PPR and Delta agrees to use its reasonable best efforts to give
prompt notice to the other of (i) any event of which it is aware and
which would be reasonably likely to cause any representation or warranty
in the Delta Exchange Agreement to be materially untrue or inaccurate or
any covenant, condition or agreement not to be complied with in all
material respects; (ii) any failure by it to timely comply with or
satisfy any covenant, condition or agreement under the Delta Exchange
Agreement or (iii) any change or event which would be reasonable likely
to have a material adverse effect on Delta or PPR, as the case may be;

. All transfer, documentary, sales, use, registration, value-added and
other similar taxes and related fees incurred by any party are to be
shared equally by Delta and PPR; provided that each Delta shareholder
agrees to pay and hold harmless Delta and PPR for any taxes and related
penalties and additions that would not have arisen but for such Delta
shareholder's negligence;

. The Delta phantom stock plan will be amended to increase the value of
the participant's interest to reflect the value of the acquisitions and
to convert the rights of the participants to a combination of shares
and/or rights to acquire shares of PPR Class B Common Stock;

. PPR agrees from and after the closing, with respect to the stock
dividends accruing on the Delta Preferred Stock Series AA outstanding
immediately prior to the closing from and after October 2, 1999, to
either cause Delta to pay the quarterly dividends, in cash, owed thereon
or to make a contribution to the capital

47
<PAGE>

of Delta in an amount sufficient to redeem Delta Preferred Stock Series
AA shares issued as a dividend on the Delta Preferred Stock Series AA
outstanding immediately prior to the closing from and after October 2,
1999 and to cause Delta to redeem such shares, in cash, promptly after
their issuance;

. From and after the closing, Pohlad Companies and Metropolitan shall take
all action, and, for so long as they are members of Dakota, LLC, shall
cause Dakota, LLC to take all action, required to cause at least two of
the directors on PPR's Board of Directors not to be "affiliates" (as
such term is defined in Rule 405 of the Securities Act) of Pohlad
Companies and Metropolitan for so long as Dakota, LLC, Pohlad Companies,
Metropolitan or any of their affiliates hold(s) a majority of the voting
rights of the outstanding stock of PPR. If Metropolitan or Pohlad
Companies transfers its membership interests in Dakota, LLC or any of
the PPR capital stock which it is acquiring pursuant to the Delta
Exchange Agreement to PepsiCo or an affiliate of PepsiCo or to an
affiliate of Pohlad Companies, respectively, then Metropolitan or Pohlad
Companies shall cause such transferee to assume its obligations with
respect to independent directors and transactions with affiliates under
the Delta Exchange Agreement.

. Until June 15, 2003, Pohlad Companies and Metropolitan agree not to
cause, directly or indirectly, PPR or any PPR subsidiary to make any
payment to, or sell, lease, transfer substitute or otherwise dispose of
any of its assets or properties to, or purchase any properties or assets
from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the
benefit of, directly or indirectly, any "affiliate," officer, director
or employee of Pohlad Companies or Metropolitan which transaction,
together with any related transaction, involves aggregate consideration
in excess of $500,000, unless such transaction is on terms that are no
less favorable to PPR or the relevant PPR subsidiary than those that
would have been obtained in a comparable, "arm's-length" transaction
with an unrelated party and such transaction shall receive the approval
of a majority of the independent directors on PPR's Board of Directors.
Such agreement, however, does not apply to transactions entered into in
the course of business between "affiliates," officers, directors or
employees of Metropolitan as licensor and PPR or a PPR subsidiary as
licensee.

. All Delta shareholders shall execute a lock-up agreement which shall
prohibit the sale of PPR Class B Common Stock for a period of six months
after the closing date.

Termination of the Agreement

The Delta Exchange Agreement may be terminated at any time prior to the
closing:

. By mutual written consent of PPR, Delta and all of the Delta
shareholders;

. By either PPR on one hand, or Delta, or the Delta shareholders on the
other hand, if:

. the other party has failed to comply in any material respect with any
of its covenants or agreements contained in the Delta Exchange
Agreement or is in breach of any representation or warranty contained
in the Delta Exchange Agreement and has failed to cure such failure
or breach within five business days;

. the exchange has not been effected on or prior to the close of
business on November 30, 1999; provided, however, that the right to
terminate for this reason will not be available to any party whose
failure to fulfill any of its obligations under the Delta Exchange
Agreement resulted in the failure of the exchange to have occurred on
or prior to such date;

. PPR shareholders do not approve the Delta Exchange Agreement and the
acquisitions contemplated thereby, including the share issuance, the
exchange and the PPR charter amendment; or

. the consummation of the Delta Exchange Agreement or acquisitions
contemplated thereby would be illegal.

48
<PAGE>

Amendment of the Agreement

The Delta Exchange Agreement may be amended by the parties at any time
before or after approval of the matters presented in connection with the
exchange by PPR shareholders. After any such shareholder approval, no
amendment can be made without further shareholder approval if required by law.
The Delta Exchange Agreement may only be amended by an instrument in writing
signed on behalf of each of the parties.

Waiver under the Agreement

The Delta Exchange Agreement permits the parties at any time prior to the
closing to:

. Extend the time for the performance of any of the obligations of the
other parties;

. Waive, in writing, any inaccuracies in the representations and
warranties contained in the Delta Exchange Agreement or in any document
delivered pursuant thereto; and

. Waive, in writing, compliance with any of the agreements or conditions
contained in the Delta Exchange Agreement which may legally be waived.

Survival and Indemnification under the Agreement

From and after the closing of the Delta Exchange Agreement, PPR agrees to,
and to cause Delta to, indemnify and hold harmless all past and present
officers, directors and managers of Delta and of the Delta subsidiaries to the
maximum extent permitted by the Delaware General Corporation Law (including
advancing expenses and attorneys' fees incurred prior to final disposition of
any proceeding upon receipt of an undertaking by such manager, director or
officer to repay such amount if it shall be ultimately determined that he or
she is not entitled to be indemnified under the Delaware General Corporation
Law) including but not limited to acts or omissions occurring in connection
with the approval of the Delta Exchange Agreement, the filing of the
registration statement covering the PPR Class B Common Stock issuable in the
exchange and the consummation of the acquisitions contemplated thereby.

49
<PAGE>

THE DAKOTA EXCHANGE AGREEMENT

The Agreement

The Dakota Exchange Agreement provides for the issuance by PPR of 46,760,000
shares of PPR Class B Common Stock to the holders of Dakota common stock in
exchange for their Dakota shares. As a result, Dakota will become a wholly
owned subsidiary of PPR. To prepare for this exchange, Pohlad Companies will
form DakBev, LLC. Dakota will merge with and into DakBev, which will be the
surviving entity. Pohlad Companies will contribute all its membership interest
in DakBev to Dakota, LLC, and Metropolitan will contribute shares of capital
stock of PepsiCo to Dakota, LLC in exchange for a membership interest in
Dakota, LLC. Dakota, LLC will then exchange all of its interest in DakBev for
PPR Class B Common Stock. As a result, DakBev will become a wholly owned
subsidiary of PPR. The Dakota Exchange Agreement is set forth in Appendix B to
this document.

Representations and Warranties

The Dakota Exchange Agreement contains certain customary mutual
representations and warranties by PPR and Dakota (which are also made as to
each subsidiary of Dakota prior to the merger and as to DakBev and each
subsidiary of DakBev after the DakBev Merger), relating to, among other
things, the following:

. Corporate existence, good standing, corporate power and similar
corporate matters;

. Capital structure and corporate authority, execution, delivery and
performance and the enforceability of the Dakota Exchange Agreement and
related matters;

. The absence of conflicts, violations and defaults under Certificates or
Articles of Incorporation and Bylaws and certain other agreements and
documents;

. The absence of required consents, approvals, orders or authorizations
of, or registration, declaration or filing with certain governmental
entities;

. Financial statements and other documents and reports filed with the SEC
by PPR and the accuracy and completeness of the information contained
therein;

. The absence of certain material changes or events with respect to PPR
and Dakota since December 31, 1998;

. Permits, franchises, licenses, etc. to own, lease and operate property
or to carry on the business currently being conducted;

. Certain tax, employee benefit and labor matters;

. The absence of pending or threatened legal proceedings;

. The absence of any oral or written agreements or plans whose benefits
would be changed as a result of the acquisitions;

. Compliance with environmental laws;

. With respect to Dakota, Dakota's indebtedness;

. Ownership and use of intellectual property;

. Ownership of and title to real and personal property, title insurance
and zoning;

. Broker's or finder's fees and expenses;

. Relationships with customers and suppliers;

. Compliance with quality standards;

. Implementation of a Year 2000 compliance plan;

50
<PAGE>

. The absence of untrue statements or omissions of material facts.

The Dakota Exchange Agreement contains certain customary representations and
warranties by Pohlad Companies relating to, among other things, the following:

. Corporate existence, good standing, corporate power and similar
corporate matters;

. The absence of any breach or default under the charter or organizational
documents, any rule, regulation order or decree or any contract or
agreement as a result of any of the acquisitions contemplated by the
Dakota Exchange Agreement;

. The absence of required consents, authorization, registration,
declaration or filings as a result of the transactions contemplated by
the Delta Exchange Agreement; and

. Entire ownership of Dakota stock or equity interest in Dakota;

. Accredited investor status;

. Acknowledgment that the shares of PPR Class B Common Stock to be issued
in the exchange have not been registered under the Securities Act
pursuant to exemptions from the Securities Act and acknowledgment that
PPR's reliance on such exemptions is predicated on Pohlad Companies'
representations in the Dakota Exchange Agreement; and

. Restrictions on transfer.

Conduct of Business Pending the Exchange

Under the Dakota Exchange Agreement, PPR has agreed that, during the period
from the date of the Dakota Exchange Agreement and continuing until the
closing date, except as permitted by the Dakota Exchange Agreement or the
prior written consent of Dakota, PPR will not and will not permit any PPR
subsidiary to:

. Sell or encumber any shares of its capital stock, or amend the terms of
any option, warrant or convertible security, except for the grant of
stock options to employees of PPR or any of the PPR subsidiaries under
PPR's stock option plans and the issuance of shares of PPR common stock
pursuant to the exercise thereof in the ordinary course of business, the
issuance of PPR common stock pursuant to outstanding warrants and the
issuance of PPR common stock as consideration for the Delta acquisition,
and acquisitions which do not exceed $50 million individually or $100
million in the aggregate;

. Amend its Certificate of Incorporation or Bylaws; provided, however that
PPR shall amend its Certificate of Incorporation to increase the
authorized shares of PPR Class B Common Stock;

51
<PAGE>

. Acquire or agree to acquire any business organization or division
thereof or any assets other than in the ordinary course of business,
except for the Delta acquisition and acquisitions which do not exceed
$50 million individually or $100 million in the aggregate;

. Sell, lease, or otherwise dispose of any assets other than in the
ordinary course of business that is not material;

. Enter into or amend or adopt any severance, employment, option, or
consulting agreement, other than as required by law;

. Knowingly violate or fail to perform any material obligation imposed by
any applicable law;

. Take any unreasonable or unusual action with respect to accounting
policies or procedures;

. Enter into any other material transaction or make any other capital
expenditure not in the ordinary course of business, except as set forth
on PPR's 1999 Capital Expenditure Budget; or

. Authorize, recommend or announce an intention to do any of the
foregoing, or enter into any contract or arrangement to do any of the
foregoing.

Under the Dakota Exchange Agreement, Dakota and Pohlad Companies agreed to
take all reasonably necessary actions to cause the following to be
consummated: (i) the formation of DakBev and Dakota, LLC, (ii) the DakBev
Merger, (iii) the Pohlad Companies contribution and (iv) the P-PR Transfer,
LLP contribution.

Under the Dakota Exchange Agreement, Dakota has agreed that, during the
period from the date of the Dakota Exchange Agreement and continuing until the
closing date, except as permitted by the Dakota Exchange Agreement or the
prior written consent of PPR, Dakota will not, and DakBev, and Dakota, LLC, as
the case may be will not and will not permit any of its respective
subsidiaries to:

. Declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital
stock, or otherwise make any payments to its shareholders, except cash
distributions in their capacity as such and the distribution of a note
receivable from Dakota to Pohlad Companies;

. Other than in the case of any Dakota subsidiary, split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock;

. Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Dakota or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;

. Issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent, any securities convertible into, or any rights, warrants or
options to acquire any such shares, voting securities, equity equivalent
or convertible securities, or agree to any amendment to the terms of any
option, warrant or convertible security;

. Except for the filing of Articles of Merger relating to the DakBev
Merger, amend its articles or bylaws;

. Except for the DakBev Merger, acquire or agree to acquire by merging or
consolidating with, or by purchasing a portion of the assets of or
equity in, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets other than
acquisitions not exceeding $1 million individually or

52
<PAGE>

$5 million in the aggregate and transactions that are in the ordinary
course of business consistent with past practice and that are not
material;

. Sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than (i) transactions
that are in the ordinary course of business consistent with past
practice and not material to Dakota and the Dakota subsidiaries taken as
a whole and (ii) the distribution of a note receivable in the amount of
$33,400,000 from Dakota to Pohlad Companies;

. Incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than in the ordinary
course of business, between Dakota and any of the Dakota subsidiaries,
or as necessary to fund certain permitted acquisitions;

. Except as may be necessary or proper to consummate the DakBev Merger,
enter into or adopt or amend any existing severance plan, agreement or
arrangement or enter into or amend any Dakota plan or employment or
consulting agreement, other than as required by law;

. Knowingly violate or knowingly fail to perform any material obligation
or duty imposed upon it or any Dakota subsidiary by any applicable
material federal, state or local law, rule, regulation, guideline or
ordinance;

. Authorize, recommend, propose or announce an intention to do any of the
foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing; or

. Except as set forth on Dakota's 1999 Capital Expenditure Budget, enter
into any other material transaction or make any other capital
expenditure not in the ordinary course of business consistent with past
practice.

Conditions Precedent to the Exchange

The respective obligations of all parties to effect the Dakota Exchange
Agreement are subject to the fulfillment at or prior to the closing of the
following conditions, each of which may be waived only with the written
consent of the other parties:

. Approval by PPR shareholders of the Dakota Exchange Agreement and the
acquisitions contemplated thereby, including the share issuance, the
exchange, the PPR charter amendment and PPR's 1999 Stock Option Plan;

. Listing on the NYSE of the PPR Class B Common Stock issuable in the
exchange;

. No legal restraints to, or litigation, law, rule, decree or order
affecting, the exchange which would have a material adverse effect;

. Receipt of all necessary governmental approvals;

. The consummation of the Dakota reorganization;

. The new credit facility has been obtained;

. The contribution by Metropolitan of PepsiCo common stock to Dakota, LLC;
and

. The consummation of all transactions contemplated by the Delta Exchange
Agreement.

The obligations of PPR to effect the Dakota Exchange Agreement are subject
to the fulfillment at or prior to the date of closing of the following
additional conditions, each of which may be waived by PPR in writing:

53
<PAGE>

. The delivery of certificates signed on behalf of Dakota, Dakota, LLC and
Pohlad Companies by their respective Chief Executive Officer and Chief
Financial Officer to the effect that Dakota, Dakota, LLC and Pohlad
Companies have performed all agreements contained in the Dakota Exchange
Agreement required to be performed, and that each of the representations
and warranties of Dakota, Dakota, LLC and Pohlad Companies contained in
the Dakota Exchange Agreement is true as of the closing date;

. PPR has received certificates of good standing from the Delaware
Secretary of State for DakBev and Dakota, LLC, each dated within five
days of the closing;

. PPR has received certified copies of the Certificates of Formation of
DakBev and the DakBev LLCs;

. All required consents, waivers, approvals and authorizations have been
obtained;

. Each of the representations and warranties of Delta contained in the
Delta Exchange Agreement shall be true and correct in all material
respects; and

. PPR has received an opinion of counsel to Dakota, LLC relating to the
merger between Dakota, LLC and DakBev.

The obligations of Dakota, LLC to effect the exchange contemplated by the
Dakota Exchange Agreement are subject to the fulfillment at or prior to the
closing of the following additional conditions, each of which may be waived by
Dakota, LLC in writing:

. The delivery to Dakota, LLC and Pohlad Companies of a certificate signed
on behalf of PPR by its Chief Executive Officer and its Chief Financial
Officer to the effect that PPR has performed all agreements contained in
the Dakota Exchange Agreement required to be performed, and that each of
the representations and warranties of PPR contained in the Dakota
Exchange Agreement is true as of the closing date;

. The Registration Rights Agreement has been executed and delivered to
Pohlad Companies by PPR;

. The delivery to Dakota, LLC and Pohlad Companies of an opinion of an
accountant relating to the tax treatment of the acquisitions
contemplated by the Dakota Exchange Agreement; and

. All necessary consents, waivers, approvals and authorizations have been
obtained.

Additional Agreements Provided in the Agreement

The Dakota Exchange Agreement also provides certain other agreements between
the parties. Specifically, the Dakota Exchange Agreement provides for, among
other things, the following agreements:

. PPR shall call a meeting of its shareholders for the purpose of: (a)
approving the acquisitions contemplated by the Dakota Exchange
Agreement, (b) approving an increase in the number of authorized shares
of PPR Class B Common Stock to 145,000,000 shares, (c) authorizing
additional shares for stock options, and (d) approving such other
matters as PPR's Board of Directors shall determine;

. The income of Dakota and the Dakota subsidiaries, and DakBev and the
DakBev LLCs for the period commencing January 1, 1999 and ending as of
the date of the closing will be included in the tax return of Pohlad
Companies. The income generated by DakBev following the date of closing
will be included in the PPR tax return;

. The Dakota phantom stock plan will be amended to increase the value of
the participants' interest to reflect the value of the exchange and to
convert the participants' rights under the plan to a combination of PPR
Class B Common Stock and/or options to acquire PPR Class B Common Stock;

54
<PAGE>

. All costs and expenses incurred in connection with the Dakota Exchange
Agreement and the acquisitions contemplated thereby including, without
limitation, the fees and disbursements of counsel, financial advisors
and accountants, shall be paid by the party incurring such costs and
expenses;

. Dakota and PPR shall promptly (and in no event more than ten days) after
the date of execution, order from a title company reasonably acceptable
to the other a title insurance commitment or commitments with respect to
all of the real property owned by Dakota and PPR as the case may be,
other than those properties for which the owner already has title
insurance;

. PPR shall prepare and file with the SEC a proxy statement for the
purpose of soliciting proxies for the matters brought before the meeting
of its shareholders;

. PPR and Dakota each agree, as to itself and its subsidiaries, that none
of the information supplied or to be supplied by it or its subsidiaries
for inclusion or incorporation by reference in the proxy statement and
any amendment or supplement thereto will, at the date of mailing to the
PPR shareholders and at the time of the meeting of its shareholders,
contain any untrue statement of a material fact or omit to state any
material fact;

. PPR, Dakota, DakBev or Dakota, LLC, as the case may be, shall, and shall
cause each of its subsidiaries to afford to the consultants,
accountants, counsel, financial advisors and other representatives of
PPR and Dakota reasonable access to, and permit them to make such
inspections and investigations as they may reasonably require of, all
their respective properties, books, contracts, and records;

. PPR shall use its reasonable best efforts to obtain a credit facility of
up to $160 million on terms reasonably acceptable to PPR;

. PPR shall use its reasonable best efforts to cause the shares of PPR
Class B Common Stock to be issued in connection with the exchange to be
approved for listing on the NYSE subject to official notice of issuance;

. Each of the parties to the Dakota Exchange Agreement agrees to use
reasonable best efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to
consummate, in the most expeditious manner practicable, the DakBev
Merger, the Pohlad Companies' contribution, the exchange and the other
acquisitions contemplated by the Dakota Exchange Agreement;

. Dakota and PPR each shall consult with the other prior to issuing any
press releases or otherwise making public announcements with respect to
the exchange and the other acquisitions contemplated by the Dakota
Exchange Agreement and prior to making any filings with any third party
and/or any governmental entity with respect thereto, except as may be
required by law or by obligations pursuant to any listing agreement with
or rules of the NYSE.

. If any state takeover law shall become applicable to the acquisitions,
PPR and Dakota shall use their reasonable best efforts to take such
actions as are necessary so that the acquisitions may be consummated
promptly;

. From and after the closing, PPR agrees to, and to cause DakBev to,
indemnify and hold harmless all past and present officers, directors and
managers of Dakota, DakBev, and of the Dakota subsidiaries to the
maximum extent permitted by the Delaware General Corporation Law and
Delaware Limited Liability Company Act, as applicable;

. PPR shall use its reasonable best efforts to give prompt notice to
Dakota, and Dakota shall use its reasonable best efforts to give prompt
notice to PPR, of: (i) any event of which it is aware and which would be
reasonably likely to cause any representation or warranty contained in
the Dakota Exchange Agreement to be materially untrue or inaccurate or
any covenant, condition or agreement not to be complied with in all
material respects, (ii) any failure of PPR or Dakota, as the case may
be, to comply in a timely manner with or satisfy any covenant, condition
or agreement to be complied with or satisfied

55
<PAGE>

by it under the Dakota Exchange Agreement or (iii) any change or event
which would be reasonably likely to have a material adverse effect on
PPR or Dakota, as the case may be;

. The parties acknowledge that the qualified subchapter S subsidiary
election currently in effect for Dakota will be terminated as of the
consummation of the DakBev Merger;

. On or prior to the date of closing, Dakota shall make a distribution to
Pohlad Companies in an amount equal to 45% of the estimated taxable
income of Dakota and DakBev for the period from January 1, 1999 through
the date of closing. Pohlad Companies shall also deliver to PPR, on or
prior to the date of closing, a statement providing the amount of such
distribution; and

. All transfer, documentary, sales, use, registration, value-added and
other similar taxes incurred in connection with the Dakota Exchange
Agreement shall be shared equally by PPR and Dakota, LLC; provided,
however that PPR and Dakota, LLC shall pay and hold each other harmless
from any such penalties and additions that would not have arisen but for
their own negligence.

Termination of the Agreement

The Dakota Exchange Agreement may be terminated at any time prior to the
closing:

. By mutual written consent of PPR and Dakota;

. By PPR on one hand, or Dakota or Pohlad Companies on the other hand, if:

. the other party has failed to comply in any material respect with any
of its covenants or agreements contained in the Dakota Exchange
Agreement or is in breach of any representation or warranty contained
in the Dakota Exchange Agreement and has failed to cause such failure
or breach within five business days;

. the exchange has not been effected on or prior to the close of
business on November 30, 1999; provided, however, that the right to
terminate for this reason will not be available to any party whose
failure to fulfill any of its obligations under the Dakota Exchange
Agreement resulted in the failure of the exchange to have occurred on
or prior to such date;

. PPR shareholders do not approve the Dakota Exchange Agreement and the
acquisitions contemplated thereby, including the share issuance, the
exchange and the PPR charter amendment; or

. the consummation of the Dakota Exchange Agreement or acquisitions
contemplated thereby would be illegal.

Amendment of the Agreement

The Dakota Exchange Agreement may be amended by the parties at any time
before or after approval of the matters presented in connection with the
exchange by PPR shareholders. After any such shareholder approval, no
amendment can be made without further shareholder approval if required by law.
The Dakota Exchange Agreement may only be amended by an instrument in writing
signed on behalf of each of the parties.

Waiver under the Agreement

The Dakota Exchange Agreement permits the parties at any time prior to the
closing to:

. Extend the time for the performance of any of the obligations of the
other parties;

. Waive, in writing, any inaccuracies in the representations and
warranties contained in the Dakota Exchange Agreement or in any document
delivered pursuant thereto; and

. Waive, in writing, compliance with any of the agreements or conditions
contained in the Dakota Exchange Agreement which may legally be waived.

56
<PAGE>

Survival and Indemnification under the Agreement

From and after the closing of the Dakota Exchange Agreement, PPR agrees to,
and to cause DakBev to, indemnify and hold harmless all past and present
officers, directors and managers of Dakota, DakBev, and of the Dakota
subsidiaries to the maximum extent permitted by the Delaware General
Corporation Law and Delaware Limited Liability Company Act, as applicable
(including advancing expenses and attorneys' fees incurred prior to final
disposition of any proceeding upon receipt of an undertaking by such manager,
director or officer to repay such amount if it shall be ultimately determined
that he or she is not entitled to be indemnified under the Delaware General
Corporation Law or Delaware Limited Liability Company Act), including but not
limited to acts or omissions occurring in connection with the approval of the
Dakota Exchange Agreement, the filing of the registration statement covering
the PPR Class B Common Stock issuable in the exchange and the consummation of
the acquisitions contemplated thereby.

57
<PAGE>

THE FRANCHISE AGREEMENTS

New Agreements with PepsiCo

Upon the closing of the acquisitions contemplated by the exchange
agreements, PPR expects to enter into a number of bottling agreements with
PepsiCo. Together, the bottling agreements will cover the PepsiCo products and
territories presently assigned to PPR, Delta and Dakota, as well as additional
potential territories. PPR anticipates that these bottling agreements will
consist of:

. a master bottling agreement and a master fountain syrup agreement for
beverages bearing the "PEPSI-COLA" and "PEPSI" trademark, including DIET
PEPSI and PEPSI ONE in the United States;

. bottling agreements and fountain syrup agreements for non-cola products
in the United States; and

. an international master bottling agreement for Puerto Rico and countries
other than the United States.

The Master Bottling Agreement. The master bottling agreement would govern
PPR's manufacture, packaging, sale and distribution of specified cola
beverages and would give PPR the exclusive right to distribute the cola
beverages for sale in specified territories. PPR would be required to purchase
its entire requirements of concentrates for the cola beverages from PepsiCo at
prices, and on terms and conditions, as determined from time to time by
PepsiCo. The prices at which PPR purchases concentrate under the master
bottling agreement and the level of advertising and marketing support provided
by PepsiCo may vary materially from the levels provided historically.

Under the master bottling agreement, PPR would be obligated to:

. maintain plant and equipment, trained staff, and distribution and
vending facilities that are capable of manufacturing, packaging and
distributing the cola beverages in sufficient quantities to fully meet
the demand for these beverages in its territories;

. use adequate quality control measures and sanitation standards, as
prescribed by PepsiCo, and abide by all flood, labeling, health,
packaging and other applicable laws and regulations;

. cooperate in and purchase cooperative advertising and sales promotion
programs and campaigns that may be reasonably established by PepsiCo in
PPR's territories;

. promote the sale of the cola beverages in its territories;

. submit to PepsiCo samples of syrups, beverages and raw materials used in
the manufacture of the syrups and beverages;

. use advertising and other forms of marketing to increase and maintain
the demand for cola beverages in the specified territories;

. maintain the financial capacity reasonably necessary to assure PPR's
performance under the allied bottling agreement;

. purchase containers from manufacturers authorized by PepsiCo.; and

. push vigorously the sale of the cola beverages.

The master bottling agreement would require PPR to meet annually with
PepsiCo to discuss business plans for that year and for the following two
years. At these meetings, PPR would be obligated to present plans that set out
in reasonable detail satisfactory to PepsiCo, its marketing, management and
advertising plans for the cola beverages for the year. In addition, PPR would
also be required to present a financial plan showing that PPR has the
financial capacity to perform its duties and obligations under the master
bottling agreement. The financial plan

58
<PAGE>

would also be required to include projected sales, marketing and advertising
plans and related equipment placements. PepsiCo would have the right to
approve these plans, and the approval may not be unreasonably withheld. PPR
would be required to report to PepsiCo periodically, but not less than
quarterly, as to its implementation of the approved plan.

If PPR did not present a plan or presented a plan that PepsiCo did not
approve or failed to carry out the plan, it would be a primary consideration
in determining whether PPR had satisfied its obligations to maintain its
financial capacity, to push vigorously the sale of the cola beverages and to
increase and fully meet the demand for the cola beverages in its territories.
If PPR failed to carry out its plan in all material respects in any segment of
its territory, whether defined geographically or by type of market or outlet,
and PPR did not correct this failure within six months of notice of the
failure, PepsiCo may have the right to terminate the master bottling agreement
or may reduce the territory covered by the master bottling agreement by
eliminating the territory, market or outlet for which the failure has
occurred.

The master bottling agreement would provide that PepsiCo may, in its sole
discretion, reformulate any of the cola beverages or discontinue certain cola
beverages, subject to certain limitations. If PepsiCo introduced new beverages
under the PEPSI-COLA or PEPSI trademarks or any modification of these
trademarks, PPR would be obligated to manufacture, package, distribute and
sell those new beverages in the same fashion as existing cola beverages. PPR
would be prohibited from producing or handling cola products, other than those
of PepsiCo, or other products or packages that imitate, infringe or cause
confusion with the products, trade dress, containers or trademarks of PepsiCo
and from acquiring, directly or indirectly, any ownership interest or entering
into any contract or arrangement, directly or indirectly, with any person that
engages in these prohibited activities. The master bottling agreement would
also impose requirements for the use of PepsiCo's trademarks, authorized
containers, packaging and labeling.

The master bottling agreement would provide that PPR may not enter into any
contract or other arrangement or participate in the management of any other
PepsiCo bottler without the consent of PepsiCo. If PPR acquired control,
directly or indirectly, of any bottler of specified cola beverages, PPR would
be required to cause the acquired bottler to amend its bottling agreements for
the cola beverages to conform to the terms of the master bottling agreement.

PPR would agree not to acquire or attempt to acquire the right to
manufacture and sell the cola beverages outside an area specified by PepsiCo
without PepsiCo's prior written consent. Any acquisition within the area
specified by the terms of the master bottling agreement would be subject to
PepsiCo's approval, and PepsiCo would agree not to withhold its approval if
the acquisition had been successfully negotiated and, in PepsiCo's reasonable
judgment, PPR had satisfactorily performed its obligations under the master
bottling agreement. PPR would agree not to pursue acquisitions outside a
specified area, which currently represents approximately 4.9% of PepsiCo's
United States bottling system in terms of volume.

PPR would agree not to distribute or sell any cola beverage outside the
authorized territories. A shipment outside the authorized territory would be
deemed a transhipment and be subject to a per-case charge determined by
PepsiCo in its sole discretion as well as charges related to investigative
costs and costs of any recall of the transhipped beverages.

The term of the master bottling agreement would be perpetual, but PepsiCo
would have the right to terminate the agreement in the event that PPR defaults
on the master bottling agreement. Events of default would include:

. PPR becoming insolvent, bankrupt, dissolving, entering receivership or
suffering a similar change in financial condition;

. any person or group acquiring beneficial ownership of 15% or more of any
class or series of the voting securities of PPR;

. PPR disposing of any voting securities in one of its bottling
subsidiaries without the consent of PepsiCo;

59
<PAGE>

. Any agreement regarding the manufacture, packing, distribution or sale
of beverages in authorized containers between PepsiCo and any person
that controls directly, or indirectly, PPR is terminated, unless PepsiCo
agrees in writing that it does not constitute a default.

. PPR entering into and remains in any business which is prohibited by the
master bottling agreement for six months or more after PepsiCo gives
notice of that fact; or

. all or substantially all of PPR's bottling assets being sold or
transferred to any entity other than a wholly-owned subsidiary of PPR.

If the master bottling agreement was terminated, PepsiCo would have the
right to terminate the remaining Pepsi beverage agreements.

PepsiCo would also be able to terminate the master bottling agreement if:

. PPR failed to make timely payments of debts it owed PepsiCo;

. PPR's plant or equipment failed to meet PepsiCo's sanitary standards;

. the syrups or cola beverages manufactured by PPR failed to meet
PepsiCo's quality control standards;

. the cola beverages were not manufactured in conformity with PepsiCo's
instructions;

. PPR failed to present or carry out an approved plan of operation; or

. PPR materially breached any other of its obligations under the master
bottling agreement.

Upon an event of default, PepsiCo would give PPR notice of the default and
an opportunity to correct the default within 60 days. If the default was not
corrected, PepsiCo would give PPR further notice and may suspend sales and
require PPR to cease production for 60 days. If a default had not been
corrected during the second 60-day period, PepsiCo would be able to terminate
the master bottling agreement.

PPR would be prohibited from assigning, transferring or pledging the master
bottling agreement, or any interest in the agreement, whether voluntarily, by
operation of law, by merger or by liquidation without the prior consent of
PepsiCo.

The master bottling agreement would be automatically amended if a number of
bottlers equal to those which purchase 80% or more of all of the concentrates
for cola beverages purchased by all bottlers who were parties to agreements
containing substantially the same terms as the master bottling agreement,
agreed with PepsiCo to different provisions than those contained in the master
bottling agreement.

Non-Cola Bottling Agreements. The beverage products covered by the non-cola
bottling agreements would be beverages licensed to PPR by PepsiCo, consisting
primarily of MOUNTAIN DEW, DIET MOUNTAIN DEW, SLICE, WONDER KOLA and TEEM. The
non-cola bottling agreements would contain provisions similar to those
contained in the master bottling agreement including those for pricing,
transshipping, authorized containers, planning, quality control, plant and
equipment, advertising, financial capacity, defaults, transfer restrictions
and term. The non-cola bottling agreements would terminate if PepsiCo
terminated the master bottling agreement. The provisions contained in the non-
cola bottling agreements would prevent PPR from manufacturing, selling or
distributing beverage products which imitate, infringe upon, or cause
confusion with, the beverage products covered by the non-cola bottling
agreements. In addition, PepsiCo would be able to discontinue the manufacture,
sale or distribution of a non-cola beverage and terminate the non-cola
bottling agreements if it provided notice to PPR six months in advance of this
discontinuation.

The Master and Non-Cola Fountain Syrup Agreements. The fountain agreements
would grant PPR the exclusive right to manufacture, sell and distribute
fountain syrup to local customers in its territories. The fountain agreements
would also grant PPR the right to act as the exclusive manufacturing, delivery
and distribution agent for national accounts within its territories that elect
direct-to-store delivery. In addition, PPR may at the discretion of PepsiCo be
granted

60
<PAGE>

a right to act as the manufacturer for fountain syrup to be delivered to
national accounts that chose to have delivery through independent
distributors. Under the fountain agreements, PPR would have the exclusive
right to service fountain equipment for all of the national account customers
within its territories. The fountain agreements would also provide for PepsiCo
to pay PPR fees for bottler delivery, brand development, equipment service and
production, as well as a service incentive.

The fountain agreements would contain provisions similar to those contained
in the master and non-cola bottling agreements including those for pricing,
transshipping, planning, quality control, plant and equipment, advertising,
financial capacity, defaults and transfer restrictions.

The fountain agreements would also terminate if PepsiCo terminated the
master bottling agreement.

International Master Bottling Agreement. The international master bottling
agreement would grant PPR the exclusive right to manufacture, sell and
distribute cola beverages, certain non-cola brands and fountain syrup in
Puerto Rico and countries other than the United States. The international
bottling agreement would contain provisions similar to those contained in the
master bottling agreement and the non-cola bottling agreements, including
those for authorized containers, planning, quality control, plant and
equipment, advertising, financial capacity, defaults, transfer restrictions
and causes for termination.

Other Bottling Agreements

Delta and Dakota have bottling agreements with other licensors of beverage
products, including Cadbury Beverages, Inc., The Seven-Up Company and The Dr
Pepper Company for DR. PEPPER, 7UP, SCHWEPPES, CRYSTAL LIGHT, TAHITIAN TREAT,
and CANADA DRY, the Pepsi/Lipton Tea Partnership for LIPTON BRISK and LIPTON'S
ICED TEA, the North American Coffee Partnership for STARBUCKS FRAPPUCCINO,
Sterling Assets Corp. and Proctor & Gamble Distributing Company, which contain
provisions generally similar in effect to those in the master bottling
agreement for the use of trademarks, trade names, approved containers and
labels, sales of imitations, and causes for termination. Some of these
beverage agreements have limited terms of appointment and, in most instances,
prohibit Delta or Dakota from dealing in similar beverage products.

THE CREDIT FACILITIES

The Delta Exchange Agreement and the Dakota Exchange Agreement each require
PPR to obtain a credit facility of up to $160 million for the purpose of
refinancing certain debt of PPR, Delta and Dakota. It is a condition to the
acquisition of Delta and Dakota that the credit facility be obtained.

PPR has obtained a commitment from Bank of America, N.A., as administrative
agent and lender, for a $175 million senior secured credit facility. The
commitment is described in a letter, including a summary of terms, dated July
14, 1999. Bank of America and PPR plan to syndicate the credit facility among
a group of lenders. If a syndication is not achieved in a manner satisfactory
to Bank of America on the terms described in the commitment letter, Bank of
America reserves the right to change the pricing, structure or other terms of
the credit facility to ensure a successful syndication, provided that the
total amount of the facility remains unchanged.

The following summary is intended as an outline of certain of the material
terms of the credit facility commitment and does not purport to summarize all
of the conditions, covenants, representations, warranties and other provisions
which would be contained in definitive legal documentation for the credit
facility.

61
<PAGE>

Borrowers and Guarantors

PPR and Dakota will be the borrowers under the credit facility. Each
subsidiary of PPR, other than Delta and its subsidiaries, will guarantee the
credit facility.

Credit Facilities

The facility will include an $85 million three-year revolving line of
credit, a $30 million three-year term loan and a $60 million four-year term
loan. The term loans will be subject to quarterly amortization of principal,
based upon the annual amounts set forth below. The administrative agent in its
discretion may reduce the principal amount of one term loan and increase the
second in a like amount, with corresponding changes to the amortization
schedule.

<TABLE>
<CAPTION>
$30 Million $60 Million
----------- -----------
<S> <C> <C>
Loan year 1....................................... $ 5,000,000 $ 600,000
Loan year 2....................................... $ 7,500,000 $ 600,000
Loan year 3....................................... $17,500,000 $ 600,000
Loan year 4....................................... $58,200,000
</TABLE>

Purpose

The proceeds of the credit facilities will be used:

. to refinance the entire outstanding principal amount of certain existing
indebtedness of Dakota and PPR ($62.8 million as of July 14, 1999 and up
to $1.8 million in related prepayment premiums).

. either (a) to fund the purchase by PPR of $53.8 million initial
principal amount of 10% Subordinated Notes to be issued by Delta (the
"Delta Subordinated Notes"), the proceeds of which will be used by Delta
to repay the entire outstanding principal amount of Delta's 11%
Subordinated Notes (the "Delta PIK Notes") or (b) to fund the purchase
of the Delta PIK Notes by PPR for $53.8 million.

. to pay fees and expenses incurred in connection with the acquisitions,
including the credit facility, in an amount not to exceed $8.5 million.

. to provide for working capital and other general corporate purposes of
PPR and its subsidiaries (excluding Delta), including permitted
acquisitions of additional bottlers.

Interest Rates and Commitment Fee

The revolving line of credit and each term loan will bear interest at either
(a) a rate fixed for periods of one, two, three or six months equal to the
eurodollar rate plus the applicable margin or (b) a floating rate equal to the
higher of the Bank of America prime rate or 50 basis points over the federal
funds rate, in each case plus the applicable margin. The borrowers will pay a
commitment fee quarterly on the unused portion of the revolving line of credit
and the term loans.

The applicable margin and the commitment fee will vary depending on the
ratio of PPR's consolidated total debt to consolidated earnings before income
taxes, depreciation and amortization (EBITDA). The applicable margin will vary
from 125 to 250 basis points for the revolving line of credit and $30 million
term loan, and from 225 to 300 basis points for the $60 million term loan. The
commitment fee will vary from 35 basis points to 50 basis points.

Prepayment of fixed rate loans will be subject to customary provisions for
lender cost and yield protection.

62
<PAGE>

Security

The collateral for the credit facility will include a security interest in
all of the capital stock of each of the domestic subsidiaries (direct or
indirect) of PPR, 65% of the voting stock and 100% of all other classes of
stock of each foreign direct subsidiary of PPR, the Delta Subordinated Notes
or the Delta PIK Notes, as the case may be, and inventory and receivables of
PPR and its subsidiaries (other than Delta).

Mandatory and Optional Prepayments

The credit facility will be subject to mandatory prepayment from certain
proceeds of asset sales, equity sales, and indebtedness. PPR and Dakota may
prepay the credit facility in whole or in part at any time without penalty,
subject to reimbursement of certain costs of the lenders in the case of
prepayment of eurodollar borrowings.

Conditions Precedent to Closing

The closing and the initial funding of the credit facility will be subject
to satisfaction of the conditions precedent deemed appropriate by the
administrative agent and the lenders for financings generally and for this
transaction in particular, including the following:

. The acquisitions shall be consummated on terms consistent with the
commitment and otherwise reasonably satisfactory to the administrative
agent and the lenders.

. The corporate, capital and ownership structure, shareholder agreements
and management of PPR and its subsidiaries shall be satisfactory to the
administrative agent.

. The administrative agent shall have received information satisfactory to
it regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, environmental
matters, material contracts, debt agreements, property ownership,
contingent liabilities and management of PPR, Delta, Dakota and their
respective subsidiaries.

. The administrative agent shall have received and, in each case, found
acceptable (a) this proxy statement, (b) certain historical pro forma
income statements and certain cash flow items prepared on a combined
basis of PPR and its subsidiaries (other than Delta) giving pro forma
effect to the acquisitions, (c) certain pro forma financial statement
projections, and (d) such other information as the administrative agent
may request.

. The administrative agent shall have received (a) certification as to the
financial condition and solvency of PPR and its subsidiaries (after
giving effect to the acquisitions, and the incurrence of indebtedness
related thereto) from an independent firm acceptable to the
administrative agent, and (b) evidence of the delivery of fairness
opinions with respect to the acquisition of interests in PPR reasonably
satisfactory to, and issued by an investment banking firm of national
reputation reasonably satisfactory to, the administrative agent.

. Definitive documentation for the credit facility satisfactory to the
administrative agent and the lenders shall be executed and delivered,
including (a) satisfactory opinions of counsel to PPR, Dakota and each
guarantor, counsel for Delta, and local and foreign counsel, (b)
satisfactory evidence that the administrative agent holds, on behalf of
the lenders, a perfected, first priority lien in all of the collateral
for the credit facility, and (c) such other customary closing documents
as the administrative agent shall reasonably request.

. All governmental, shareholder and third party consents and approvals
necessary or desirable shall have been obtained and be in force and
effect.

. There shall not exist (a) any order, decree, judgment, ruling or
injunction which restrains the consummation of the acquisitions or (b)
any material pending or threatened action, suit, investigation or
proceeding.

63
<PAGE>

. There shall not have occurred a material adverse change since December
31, 1998 in the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects of PPR,
Delta or Dakota.

. The administrative agent shall be satisfied that the amount of committed
financing available to PPR and Dakota shall be sufficient to meet their
ongoing financing needs and those of their subsidiaries.

. PPR and Dakota shall have entered into interest rate protection
agreements satisfactory to the administrative agent.

. The administrative agent, any lender and their affiliates shall have
received all fees and expenses required to be paid on or before closing.

. The administrative agent shall have received information satisfactory to
it that PPR, Delta, Dakota and their subsidiaries are taking all
necessary and appropriate steps to analyze and address the Year 2000
problem and that the material computer applications of PPR, Delta,
Dakota, their subsidiaries and their key vendors and customers will, on
a timely basis, adequately address the Year 2000 problem.

. There shall not have occurred any material disruption of or a material
adverse change in conditions in the financial, banking or capital
markets which the administrative agent deems material in connection with
the syndication of the credit facility.

Representations, Warranties and Covenants

The documents evidencing the credit facility will contain representations,
warranties and covenants usual and customary for financings generally and for
this transaction in particular.

Financial Covenants

Financial covenants for PPR and its subsidiaries (excluding Delta) shall
include:

. Maintenance at all times of a minimum net worth with quarterly step-ups
equal to 75% of net income and 100% of the proceeds of any equity
issuances,

. Maintenance of a consolidated leverage ratio (consolidated total
indebtedness/ consolidated EBITDA) from the closing date through
December 31, 1999 not to exceed 5.50 to 1.00, and from January 1, 2000
and thereafter not to exceed 5.00 to 1.00, and

. Maintenance on a rolling four quarter basis of a minimum fixed charge
coverage ratio (consolidated EBITDA/cash interest expense plus scheduled
principal repayments) of 1.50 to 1.00.

Events of Default

The documents evidencing the credit facility will contain events of default
usual and customary for financings generally and for this transaction in
particular, including, but not limited to, the following: (a) nonpayment of
principal, interest, fees or other amounts, (b) violation of covenants, (c)
inaccuracy of representations and warranties, (d) cross-default to other
material agreements and indebtedness, (e) termination or cancellation of
bottling franchise agreements and other material agreements pertaining to
bottling operations relating to more than 5% of total consolidated revenues of
PPR and its subsidiaries (excluding Delta), (f) bankruptcy and other
insolvency events, (g) material judgments, (h) ERISA matters, (i) actual or
asserted invalidity of any loan documentation or security interests, (j)
PepsiCo owning, directly or indirectly, less than 10% of the capital stock of
PPR, (k) PPR owning less than 100% of the common stock of either of Delta or
Dakota, or (l) change of control.

64
<PAGE>

THE COMPANIES

PEPSI-COLA PUERTO RICO BOTTLING COMPANY

Business

PPR is a holding company which, through its manufacturing and distribution
subsidiaries, produces, sells and distributes a variety of soft drink and
fruit juice products and bottled water in the Commonwealth of Puerto Rico,
pursuant to exclusive franchise arrangements with PepsiCo and other franchise
arrangements. PPR also has rights to sell PepsiCo products to distributors in
the U.S. Virgin Islands. PPR produces, sells and distributes soft drink
products primarily under the Pepsi-Cola, Slice, Wonder Kola, Teem and Mountain
Dew trademarks pursuant to exclusive franchise arrangements with PepsiCo. PPR
also produces, sells and distributes tonic water, club soda and ginger ale
under the Seagram trademark through an exclusive arrangement with Joseph E.
Seagram & Sons, Inc. and sells and distributes fruit juice products under the
Welch's trademark. In addition, PPR recently acquired the right to produce,
sell and distribute 7UP, Sunkist, Welch's and Schweppes soft drink brands in
Puerto Rico

PPR was incorporated in Delaware and acquired the franchise rights to
produce, sell and distribute PepsiCo soft drink products in Puerto Rico in
1987. A subsidiary of PPR manufactures plastic bottles and "preforms" (small
molded plastic units which are expanded with air to produce plastic bottles).

The principal market for PPR's products is Puerto Rico, a Commonwealth of
the United States with a population of approximately 3.7 million inhabitants.
Currently, approximately 35% of the population of Puerto Rico is under the age
of l8 and 45% of the population is under the age of 25 which PPR believes is
significant because young people are major consumers of soft drinks.

Although PPR has rights to sell PepsiCo products to distributors in the U.S.
Virgin Islands, it is not required to do so under its franchise agreements
with PepsiCo. During 1998 less than 1% of PPR's sales by volume were to
distributors in the U.S. Virgin Islands. PPR has also received certain rights
and preferences for expansion of its exclusive business with PepsiCo
throughout the Caribbean.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations

Change in Control

On July 17, 1998, P-PR Transfer, LLP, a Delaware registered limited
liability partnership, and V. Suarez & Co., Inc., a Puerto Rico corporation
("Suarez"), purchased an aggregate of 5,000,000 shares of PPR Class A Common
Stock and 6,210,429 shares of PPR Class B Common Stock. P-PR Transfer, LLP is
a joint venture between Pohlad Companies and BFSI. The transactions were
previously disclosed by PPR in a current report on Form 8-K filed with the SEC
on July 31, 1998.

In connection with the change in control, PPR issued warrants to P-PR
Transfer, LLP and Suarez dated July 17, 1998 for the purchase of 1,360,000
shares of PPR Class B Common Stock and 340,000 shares of PPR Class B Common
Stock, respectively, exercisable at $6.875 per share at any time during a
period of seven years and six months after the date of the warrants. The
warrants may be transferred and give the holders on demand and unlimited
piggyback registration rights.

Also in connection with the change in control, six of PPR's seven directors
resigned on July 17, 1998. Effective July 18, 1998, the size of PPR's Board of
Directors was increased to eight members and seven new directors were
appointed, each of whom were designated by P-PR Transfer, LLP. Also effective
July 18, 1998, certain of PPR's officers resigned.

65
<PAGE>

Restructuring Charge

During the fiscal year ended September 30, 1998, a restructuring charge of
$1.7 million was established under a plan to improve PPR's performance. The
charge included approximately $0.7 million of severance and related charges
for the elimination of 17 administrative personnel, $0.2 million of accruals
for future payments to exit activities, including canceling lease agreements,
and $0.8 million of asset writedowns related to the elimination of certain
product lines and exiting certain other business strategies. Management
anticipates the restructuring plan will provide annual savings of
approximately $1.3 million to $1.4 million beginning in 1999. Severance
payments in the six-month period ended June 30, 1999 totaled approximately
$0.2 million. Severance payments in the three month period ended December 31,
1998 and in the fiscal year ended September 30, 1998 totaled approximately
$0.4 million and $47 thousand, respectively, while payments relating to other
exit activities approximated $0.1 million and $0.1 million, respectively.

BAESA Stock Dividend

In addition to conducting its own bottling operations, PPR previously owned
12,345,348 shares, or approximately 17% of the outstanding capital stock of
Buenos Aires Embotelladora S.A. ("BAESA"), and, through June 30, 1996,
exercised significant influence over the management of BAESA, subject to the
right of PepsiCo and certain of its affiliates to approve certain management
decisions. As of July 1, 1996, PepsiCo assumed operating control of BAESA and
PPR no longer controlled or had significant influence over, the management or
operations of BAESA.

PPR's Board of Directors declared a dividend consisting of the 12,345,348
shares of capital stock of BAESA owned by PPR. The dividend was distributed on
June 17, 1998 to PPR's shareholders of record as of May 28, 1998. The
distribution was made in the form of 6,172,674 BAESA American Depository
Shares (each representing two underlying BAESA shares) on a pro rata basis to
the holders of PPR's 21,500,000 outstanding Class A shares and Class B shares.
The carrying value of the capital stock of BAESA had been written down to zero
at September 30, 1996. PPR's financial information for fiscal year 1996 and
earlier reflects PPR's equity interest in BAESA during those periods.

Income Taxes

PPR and its subsidiaries are Delaware corporations subject to U.S. federal
income taxes; however, PPR's subsidiaries are eligible for and have elected
the benefit of Section 936 of the U.S. Internal Revenue Code. Section 936
presently allows a tax credit equal to a portion of the amount of U.S. income
taxes attributable to earnings derived from operations within Puerto Rico and
to certain qualified investments maintained in Puerto Rico, subject to certain
limitations. PPR's subsidiaries have elected to claim the credit under the
Economic Activity Limitation method. The 1996 Small Business Act repealed the
Section 936 credit prospectively. However, the act grandfathered in "existing
credit claimants" during a ten-year transition period. The credit under the
Economic Activity Limitation Act for Puerto Rico will be calculated under the
rules existing prior to the adoption of the act for taxable years beginning
after 1995 and before 2002. For taxable years beginning after December 31,
2001, a cap is placed upon the Puerto Rican source business income eligible
for the credit. For tax years beginning after January 1, 2006, the economic
activity credit is repealed in its entirety.

Effective October 1998, PPR was granted an additional ten-year Puerto Rican
tax incentives exemption for its plastic preforms manufacturing and sales
operation. Under the terms of the grant, PPR's beverage packaging subsidiary
received a 90% exemption from Puerto Rico income tax, a 60% exemption from
municipal tax and a 90% exemption from property tax. In exchange for these tax
exemptions, PPR agreed to manufacture plastic preforms and plastic bottles,
employ a minimum number of persons and maintain equipment and facilities in
Puerto Rico.

66
<PAGE>

As of December 31, 1998, PPR and its subsidiaries had approximately $76.3
million in net operating losses available to offset against future earnings
for purposes of Puerto Rican taxation and $54.2 million in U.S. net operating
losses. The Puerto Rico net operating losses expire through 2006 and the U.S.
net operating losses expire through 2019. The net operating losses belong to
PPR and its manufacturing and distributing subsidiaries. For Puerto Rican and
U.S. tax purposes, related entities such as PPR and its wholly owned
subsidiaries may not join in the filing of a consolidated income tax return.
As a result, the net operating losses of one entity may not be absorbed or
utilized to offset the taxable income of any other related entity. Only the
entity that generated losses may use such losses to offset its own future
taxable income. As a result of the change in control transaction in the fiscal
year ended September 30, 1998, PPR's utilization of its U.S. federal net
operating loss carryforwards is limited annually. Realization of all these
future income tax benefits is dependent on the existence of future taxable
income. Valuation allowances covering substantially all of the PPR's net
operating loss carryforwards have been provided as PPR does not believe that
it is "more likely than not" that the future income tax benefits will be
realized.

Selling and Marketing Expense

PPR has a number of marketing arrangements with PepsiCo pursuant to which
PPR is required to make certain investments in marketing, new products,
packaging introductions and certain capital goods. PPR receives reimbursements
from PepsiCo for a portion of such expenditures, which it is able to use to
offset traditional marketing expenses or to acquire fixed assets. PPR's
selling and marketing expenses are shown net of all such reimbursements from
PepsiCo.

Change in Fiscal Year

Effective January 1, 1999, PPR changed its fiscal year end from September 30
to December 31.

Seasonality

The historical results of operations of PPR have not been significantly
seasonal. However PPR anticipates that its results of operations in the future
may become more seasonal, with higher demand in the summer and holiday
seasons.

Combination of Interests

During the six months ended June 30, 1999, PPR incurred approximately $1.1
million in professional fees and other related costs related to the
combination of interests. Costs of approximately $0.7 million attributable to
combining the common equity interests of PPR, Delta and Dakota have been
expensed, while remaining costs of approximately $0.4 million attributable to
the acquisition of Delta's minority interests under the "purchase" method of
accounting have been capitalized as other long-term assets.

Subsequent Events

On July 30, 1999, PPR entered into a contract rights agreement with Seven-
Up/RC Bottling Company of Puerto Rico, Inc. ("Seven-Up PR") pursuant to which
Seven-Up PR released its exclusive rights for the production and distribution
of the 7UP, Sunkist, Welch's and Schweppes soft drink brands in Puerto Rico.
PPR used working capital to pay Seven-Up PR $12.0 million in cash in exchange
for these releases, based on negotiations between PPR and Seven-Up PR. PPR
obtained the releases as a precondition to its entry into new franchise
agreements for these brands. With the addition of these brands, PPR expects to
increase its case volume production by approximately 20%.

On August 3, 1999, PPR entered into an asset purchase agreement with Seven-
Up PR pursuant to which PPR acquired from Seven-Up PR certain customer
information, owned vehicles, equipment and leased vehicle contracts. In
exchange for these assets, PPR used working capital to pay Seven-Up PR $30,300
in cash and to pay unrelated third party lessors $468,597 in cash. Seven-Up PR
used the assets in connection with its production and distribution of the 7UP,
Sunkist, Welch's and Schweppes soft drink brands in Puerto Rico. PPR expects
to use the assets for the same purpose.

67
<PAGE>

Financial Information

The following table sets forth certain financial information as a percentage
of net sales for PPR for the periods indicated.

<TABLE>
<CAPTION>
Three Three
Months Six Months Months
Ended June Ended Ended Year Ended
30 June 30 December 31 September 30
------------ ------------ ------------ -------------------
1999 1998 1999 1998 1998 1997 1998 1997 1996
----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales............... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Sales........... 74.4 74.5 75.8 74.2 71.8 67.4 70.9 68.8 72.8
Gross Profit............ 25.6 25.5 24.2 25.8 28.2 32.6 29.1 31.2 27.2
Selling, General and
Administrative
Expenses............... 30.1 34.6 31.5 34.8 30.7 34.5 36.4 39.0 50.6
Litigation Settlement
Expenses............... -- -- -- -- -- -- -- 13.3 --
Other Special Charges... 2.6 -- 1.9 -- 0.9 -- 3.3 0.5 2.6
Insurance Proceeds...... -- -- -- -- (1.2) -- (1.3) -- --
Loss from Operations.... (7.0) (9.2) (9.1) (9.0) (2.2) (1.9) (9.3) (21.6) (26.0)
</TABLE>

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30,
1998

For the three months ended June 30, 1999, net sales for PPR increased $1.0
million to $26.8 million, a 3.7% increase over the three months ended June 30,
1998. The sales increase for the three months ended June 30, 1999 was driven
by a 7.0% increase in case volume sales. Case volume gains reflected higher
sales through supermarkets of packages with lower unit selling prices, but
more favorable margins, during the three months ended June 30, 1999.

Cost of sales for PPR increased $0.7 million, or 3.5%, to $19.9 million for
the three months ended June 30, 1999, in comparison to the three months ended
June 30, 1998. This increase was due primarily to the increased sales volume.
The effect of those increases in costs were reduced by the effect of a modest
shift in product mix towards cans which have a lower cost than plastic
bottles.

As a result of the above factors, gross profit for PPR increased $0.3
million, or 4.4%, to $6.9 million for the three months ended June 30, 1999, as
compared to the three months ended June 30, 1998.

Selling, general and administrative expenses for PPR decreased by $0.9
million, or 10.0%, to $8.1 million for the three months ended June 30, 1999,
as compared to the three months ended June 30, 1998. PPR's provision for bad
debt allowance was decreased by $1.0 million in the three months ended June
30, 1999.

During the three months ended June 30, 1999, PPR expensed approximately $0.7
million in professional fees and other related costs attributable to combining
the common equity interests of PPR, Delta and Dakota.

As a result of the above factors, loss from operations for PPR decreased to
$1.9 million in the three months ended June 30, 1999, from a loss of $2.4
million in the three months ended June 30, 1998.

Net loss decreased to $2.3 million in the three months ended June 30, 1999,
from a net loss of $3.1 million during the three months ended June 30, 1998.
This decrease is the result of higher operating income and decreased interest
and income tax expense.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Net sales for PPR increased $1.3 million, or 2.6%, to $50.1 million for the
six months ended June 30, 1999, as compared to the six months ended June 30,
1998. Case volume sales increased 7.9%, as compared to the same six months in
1998. However, the effect of this increase was reduced by reductions in
revenue from the sale of fountain products and home delivered bulk water. Net
sales in the six months ended June 30, 1998 included $1.5 million received in
settlement of franchise company marketing support claims from prior periods.

68
<PAGE>

Cost of sales for PPR increased $1.7 million, or 4.8%, for the six months
ended June 30, 1999, as compared to the six months ended June 30, 1998. This
increase was due primarily to the increased sales volume but also reflected
expenses for repair and maintenance of production lines that were $0.5 million
higher than the six months ended June 30, 1998. The effect of those increases
in costs were reduced by the effect of a modest shift in product mix towards
cans which have a lower cost than plastic bottles.

As a result of the above factors, gross profit for PPR decreased $0.5
million, or 3.6%, to $12.1 million for the six months ended June 30, 1999, as
compared to the same period in 1998.

Selling, general and administrative expenses for PPR decreased by $1.2
million, or 7.2%, to $15.8 million for the six months ended June 30, 1999, as
compared to the six months ended June 30, 1998. The decrease reflects a $0.3
million reduction in fleet costs achieved through buy-out of a full-service
lease for certain delivery vehicles. In addition, marketing and other
operating costs were reduced. There continued to be a reduction in
administrative staffing and expenditures for outside professional services
during the six months ended June 30, 1999, as compared to the same period in
1998.

In the six months ended June 30, 1999, PPR reduced the carrying value of
assets related to its Cristalia water division by $0.3 million. This
adjustment reflected the effect of the sale of this division for $1.2 million
in April 1999. Also in the six months ended June 30, 1999, PPR expensed
approximately $0.7 million in professional fees and other related costs
attributable to combining the common equity interests of PPR, Delta and
Dakota.

As a result of the above factors, PPR had a loss from operations for the six
months ended June 30, 1999 of $4.6 million, compared to a loss of $4.4 million
for the same period in 1998.

Interest expense for the six months ended June 30, 1999 was $0.9 million,
compared to $1.2 million for the same period in 1998. This decrease was a
result of reductions of long-term debt.

Net loss increased to $5.2 million in the six months ended June 30, 1999,
from a net loss of $4.2 million during the six months ended June 30, 1998.
This increase was the result of lower operating income and an increased income
tax expense. In the six months ended June 30, 1998, PPR recognized the effect
of a carryback to prior income tax periods of expenses incurred in settlement
of litigation.

Three Months Ended December 31, 1998 Compared to Three Months Ended December
31, 1997

Net sales for PPR increased $2.8 million, or 11%, to $28.3 million for the
three months ended December 31, 1998 (the "1998 interim period") from the
three months ended December 31, 1997 (the "1997 interim period"). This
increase was primarily the result of the increase in case volume sales, which
increased 14% during the 1998 interim period compared to the 1997 interim
period. The increased volume was in cans and 20 oz. plastic bottles; this was
offset by a decrease in average overall pricing of 2.7% and reductions of
price support.

Cost of sales for PPR increased $3.1 million, or 18.2%, for the 1998 interim
period as compared to the 1997 interim period to $20.3 million. This increase
was primarily due to the increased sales volume and costs of imported
products.

Gross profit for PPR decreased by 3.8% to $8.0 million for the 1998 interim
period as compared to the 1997 interim period. The decrease was primarily due
to the impact of Hurricane Georges in late September 1998, which forced PPR to
halt production for two weeks after the storm and import higher cost finished
goods for an extended period.

Selling and marketing expenses for PPR decreased $0.5 million, or 7.4%, to
$6.9 million for the 1998 interim period as compared to the 1997 interim
period. This decrease was primarily due to reduced operating expenses of $0.5
million in the 1998 interim period as compared to the 1997 interim period.

69
<PAGE>

Administrative expenses for PPR increased $0.5 million, or 33.2%, for the
1998 interim period from the 1997 interim period to $1.8 million. This
increase reflected transition costs of implementing the new management and
accounting services agreements.

PPR's results of operations for the 1998 interim period were affected by the
incurrence of charges for unusual items. The unusual items included an
estimated asset impairment loss of $0.3 million relating to the sale of the
Cristalia water business which was pending during the 1998 interim period. The
impact of this unusual item was offset by the benefit of additional insurance
proceeds of $0.3 million for loss of business from October 1, 1998 to October
21, 1998 due to Hurricane Georges.

Loss from operations for PPR decreased to $0.6 million in the 1998 interim
period, from a loss of $0.5 million in the 1997 interim period. This decrease
was the result of lower gross profit of $0.3 million, higher administrative
expenses of $0.5 million, and an additional reserve for asset impairment.
These were offset in part by the lower selling and marketing expenses of $0.5
million and proceeds from business interruption insurance related to the
hurricane of $0.3 million.

Net loss decreased to $1.4 million in the 1998 interim period, from a net
loss of $1.0 million during the 1997 interim period. This decrease was the
result of lower operating income and an increased income tax expense.

Fiscal Year Ended September 30, 1998 Compared to Fiscal Year Ended September
30, 1997

Net sales for PPR increased $0.2 million, or 0.2%, in fiscal year 1998 from
fiscal year 1997 to $99.4 million. This increase was primarily the result of
an increase in sales volume of approximately 3.0% offset partially by
increased discounts provided to customers in 1998 as compared to 1997. The
average net sales price decreased during fiscal year 1998 by approximately
1.8% as compared to fiscal year 1997.

Cost of sales for PPR increased $2.3 million, or 3.3%, for fiscal year 1998
as compared to fiscal year 1997 to $70.5 million. This increase was primarily
the result of the increase in sales volume.

Gross profit for PPR decreased by $2.0 million to $28.9 million in fiscal
year 1998 from $30.9 million in 1997. As a percentage of net sales, gross
profit decreased to 29.1% in 1998 from 31.2% in 1997. The decrease was
primarily due to the higher discounts provided to customers (which resulted in
a lower average net sales price).

Selling and marketing expenses for PPR decreased $0.2 million, or 0.5%, to
$30.1 million for the fiscal year 1998 as compared to the 1997 fiscal year. As
a percentage of net sales, selling and marketing expenses decreased to 30.3%
during the fiscal year 1998 from 30.5% in the 1997 fiscal year.

Administrative expenses for PPR decreased $2.4 million or 28.2% for fiscal
year 1998 from fiscal year 1997 to $6.0 million. This decrease was primarily
the result of reductions of $0.9 million in the cost of legal services,
reductions of $1.0 million in salaries and wages, and $0.5 million in other
administrative expenses. As a percentage of net sales, administrative expenses
decreased to 6.1% during fiscal year 1998 from 8.5% in fiscal year 1997.

PPR's results of operations for fiscal year 1997 were affected by the
incurrence of a non-cash expense of $13.2 million in connection with PPR's
settlement of certain civil litigation, representing the estimated value of
2.5 million shares of PPR Class B Common Stock transferred as part of the
settlement. Because these shares were contributed to PPR by PPR's founding
shareholders, and because PPR received a $4.0 million recovery from its
liability insurance carrier, the net effect on PPR's equity of the settlement
transaction was a $1.5 million gain, which can be viewed as a recovery of
previously expensed legal cost. There was no similar non cash expense that was
incurred during fiscal year 1998.

PPR's results of operations for fiscal year 1998 were affected by the
incurrence of charges for unusual items totaling $3.3 million. The unusual
items included costs related to the restructuring plan initiated by the new
management of PPR ($1.7 million), provision for certain legal and
environmental issues ($0.8 million), and

70
<PAGE>

provision for reduction in the estimated market value of the former production
facility now held for resale ($0.8 million). The impact of these unusual items
was offset by the benefit of insurance proceeds of $1.3 million for loss of
business from September 22, 1998 to September 30, 1998 due to Hurricane
Georges.

Loss from operations for PPR decreased to $9.2 million in fiscal year 1998
from a loss of $21.4 million in fiscal year 1997. This decrease was the net
result of the decrease in gross profit of $2.0 million, decreased selling and
marketing costs of $0.2 million, decreased administrative costs of $2.4
million, the absence of the settlement of litigation charge of $13.2 million
and unusual items of $3.3 million in fiscal year 1998 versus a restructuring
charge of $0.5 million in fiscal year 1997.

Income tax benefit was $1.0 million for fiscal year 1998 as compared to $3.3
million for fiscal year 1997. PPR's effective tax rate differs from the
statutory rate primarily due to the Puerto Rico economic activity credit and
valuation reserves provided for PPR's net operating losses.

Net loss during fiscal year 1998 was $9.6 million, compared to a net loss of
$19.5 million during fiscal year 1997.

Fiscal Year Ended September 30, 1997 Compared to Fiscal Year Ended September
30, 1996

Net sales for PPR decreased $3.7 million, or 3.6%, for fiscal year 1997 from
fiscal year 1996 to $99.2 million. This decrease was primarily the result of
the significant increase in discounts provided to customers, partially offset
by a 4.0% increase in sales volume in fiscal year 1997 as compared to fiscal
year 1996. The increase in discounts resulted from intense competitive
activity. The average net sales price on an eight ounce serving equivalent
basis decreased during fiscal year 1997 by approximately 7.3% as compared to
fiscal year 1996.

Cost of sales for PPR decreased by $6.7 million, or 9.0%, to $68.2 million
for fiscal year 1997 from fiscal year 1996. This decrease was primarily the
result of lower raw material costs and lower labor costs, partially offset by
a 4.0% increase in sales volume and by higher depreciation costs for the new
manufacturing facility in fiscal year 1997 as compared to fiscal year 1996.

Gross profit for PPR increased by $3.0 million to $30.9 million for fiscal
year 1997 from $27.9 million in fiscal year 1996. As a percentage of net
sales, gross profit increased to 3l.2% in fiscal year 1997 from 27.2% in
fiscal year 1996. The increase was primarily due to the increased sales volume
of 4.0%, offset in part by lower average net sales price, and the lower cost
of sales which was due to lower raw material costs and labor costs, partially
offset by the increased depreciation costs of the Toa Baja plant.

Selling and marketing expenses for PPR decreased by $12.2 million, or 28.8%,
to $30.2 million for fiscal year 1997 from fiscal year 1996. This decrease was
primarily due to reductions in marketing spending of $8.2 million, reductions
in labor costs of $1.5 million, reductions in fleet and other maintenance
costs of $1.8 million, a reduction in insurance expense of $0.5 million and
net reductions in security and other expenses of $0.2 million in fiscal year
1997 as compared to fiscal year 1996. As a percentage of net sales, selling
and marketing expenses decreased to 30.5% during 1997 fiscal year as compared
to 41.3% for fiscal year 1996.

Administrative expenses for PPR decreased by $1.2 million, or 12.3%, to $8.4
million, for 1997 fiscal year as compared to fiscal year 1996. This decrease
was primarily the result of lower professional fees incurred in fiscal year
1997, due in part to the recovery of $1.5 million from the PPR's officers and
directors liability insurance carrier, as compared to fiscal year 1996. As a
percentage of net sales, administrative expenses decreased to 8.5% during
fiscal year 1997 from 9.3% in fiscal year 1996.

PPR's results of operations for fiscal year 1997 were affected by the
incurrence of a non-recurring restructuring charge of $0.5 million. This
charge was for the costs associated with employee terminations which resulted
in a reduction of the PPR's work force by approximately 5%. During fiscal year
1996, a charge of $2.7 million was recorded. The 1996 charge was recorded in
connection with the fixed asset write-down of $1.4 million related to the
closing of all bottling operations in PPR's old bottling plant and $1.3
million in pension asset write-offs and costs associated with employee
terminations.

71
<PAGE>

Loss from operations for PPR decreased to $21.4 million during fiscal year
1997, from a loss of $26.8 million for fiscal year 1996. The decreased loss
resulted from (i) a $3 million improvement in gross profit resulting from
higher unit sales volume of 4%, and lower raw material and labor costs,
partially offset by lower net selling prices due to increased discounts
offered to customers and higher depreciation expense, (ii) lower selling and
marketing costs of $12.2 million, (iii) lower administrative expenses of $1.2
million, (iv) the incidence of non-cash settlement of litigation costs of
$13.2 million, and (v) a decrease in restructuring charges of $2.2 million.

Based on information made public by BAESA, equity in net loss of BAESA, net
of income taxes, amounted to $51.5 million for fiscal year 1996. PPR's equity
in the loss reported by BAESA for fiscal year 1996 was such that it reduced
the PPR's investment to zero, meaning that no further equity in losses of
BAESA would be reported by PPR until BAESA reported profits sufficient to
produce a positive investment in BAESA on PPR's balance sheet. No such profits
were realized during fiscal year 1997. As a result of withdrawal of
partnership interest in BAESA Shareholder Associates and the liquidation of
Argentine Bottling Associates, an affiliated partnership through which PPR
held its investment in BAESA, PPR will no longer be subject to the accounting
requirements that requires PPR to report the results of operations of BAESA on
an equity basis.

Income tax benefit was $3.3 million for fiscal year 1997 as compared to $1.2
million for fiscal year 1996. The increase was primarily due to income tax
benefit arising from the carry back of current year losses to fiscal year
1994.

Net loss for fiscal year 1997 was $19.5 million, compared to a loss of $74.3
million for fiscal year 1996. Loss during fiscal 1997 before equity in net
loss of BAESA was $19.5 million, as compared to $22.9 million for fiscal year
1996.

Liquidity and Capital Resources

General

In April 1999, PPR completed the sale of the Cristalia water business. The
sales price of $1.2 million was comprised of $0.7 million cash and $0.5
million note receivable. The majority of the cash proceeds were used to prepay
amounts due on long-term debt.

On July 30, 1999, PPR entered into a Third Restated Credit Agreement (the
"Third Restated Credit Agreement") with Banco Popular and Bank of America.
This agreement includes long-term loans of $31.8 million and a short-term
revolving credit facility of $5.0 million. The loans are due on the earlier to
occur of the acquisition of Delta and Dakota or April 25, 2000. Assuming that
the acquisitions are completed, PPR intends to retire all debt under the Third
Restated Credit Agreement with funds borrowed under its new credit facility.
See "The Credit Facilities."

Under the terms of the Third Restated Credit Agreement, PPR must maintain
tangible net worth (as defined in the agreement) of $26.0 million on September
30, 1999, $24.5 million at December 31, 1999, and $23.5 million at April 25,
2000. In addition, under certain circumstances, PPR may be required to prepay
a portion of the debt. Specifically, net proceeds of capital asset
dispositions over $0.25 million per year, insurance recoveries other than for
business interruption not promptly applied toward repair or replacement, and a
portion of excess cash flow (as defined in the agreement), must be applied
toward early repayment of the amounts outstanding under this agreement. The
entire principal amount of loans outstanding under the Third Restated Credit
Agreement becomes immediately due and payable if PPR violates any of these
financial restrictions. Furthermore, PPR may not pay dividends without the
consent of the lenders under the Third Restated Credit Agreement. PPR has
granted the lenders a security interest in all its machinery and equipment,
receivables, inventory and the real property on which the Toa Baja Plant and
the Rio Piedras Plant are located. PPR believes it is in full compliance with
the terms of the Third Restated Credit Agreement.

The Delta Exchange Agreement and the Dakota Exchange Agreement each require
PPR to obtain a credit facility of up to $160 million for the purpose of
refinancing certain debt of PPR, Delta and Dakota. PPR has obtained a
commitment from Bank of America, as administrative agent and lender, for a
$175 million senior secured credit facility. See "The Credit Facilities."

72
<PAGE>

PPR had indebtedness, including short-term and long-term borrowings and
capital lease obligations at June 30, 1999 of $21.9 million, at December 31,
1998 of $23.1 million, at September 30, 1998 of $23.5 million and at September
30, 1997 of $31.5 million.

Capital expenditures, before the effect of dispositions, for PPR totaled
$6.8 million in the six months ended June 30, 1999. Capital expenditures,
before the effect of dispositions, for PPR totaled $1.2 million in the 1998
interim period. Capital expenditures for the fiscal years ended September 30,
1998 and 1997 were $3.0 million and $4.7 million, respectively.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Net cash used in operating activities for PPR was $4.3 million for the six
months ended June 30, 1999, as compared with $1.5 million for the same period
in 1998.

Net cash used in investing activities for PPR was $6.1 million for the six
months ended June 30, 1999, as compared with $0.7 million for the same period
in 1998. The increase in cash used in investing activities reflected purchases
of equipment to buy-out a full service lease for delivery vehicles, to acquire
additional vehicles to expand the direct servicing of accounts previously
serviced by wholesalers and to place additional marketing equipment.

Cash flows used in financing activities for PPR were $1.1 million for the
six months ended June 30, 1999, as compared with $0.6 for the same period in
1998. During the six months ended June 30, 1998, PPR borrowed an additional
$0.8 million on a long term basis. Additional loans were not incurred in the
six months ended June 30, 1999.

Three Months Ended December 31, 1998 Compared to Three Months Ended December
31, 1997

Net cash used in operating activities for PPR was $3.7 million for the 1998
interim period as compared with $3.6 million for the 1997 interim period. The
net cash used in operating activities, excluding the portion due to changes in
assets and liabilities, was $0.2 million during the 1998 interim period and
$0.4 million in the 1997 interim period. The net cash used in operating
activities that was due to changes in assets and liabilities was $3.9 million
in the 1998 interim period and $4.0 million in the 1997 interim period.

Net cash used in investing activities for PPR was $1.2 million for the 1998
interim period as compared with $0.5 million for the 1997 interim period.
Purchases of property and equipment, net of disposals, amounted to $1.2 and
$0.5 million for the 1998 and 1997 interim periods, respectively.

Cash flows used in financing activities for PPR were $0.4 million for the
1998 interim period as compared with $1.6 for the 1997 interim period.
Financing activities for PPR during the 1998 and 1997 interim periods were
limited to the net repayment of debt.

Fiscal Year Ended September 30, 1998 Compared to Fiscal Year Ended September
30, 1997

Net cash used in operating activities for PPR was $7.7 million for fiscal
year 1998 as compared with $7.4 million for fiscal year 1997. The net cash
provided by (used in) operating activities excluding the portion due to
changes in assets and liabilities was ($2.2) million during fiscal year 1998
and $0.4 million during fiscal year 1997. The net cash used in operating
activities that was due to changes in assets and liabilities was $5.5 million
during fiscal year 1998 and $7.8 million during fiscal year 1997.

Net cash provided by (used in) investing activities for PPR was ($2.3)
million for fiscal year 1998, as compared with $8.5 million for fiscal year
1997.

Cash flows provided by (used in) financing activities for PPR were $15.2
million for fiscal year 1998 as compared with ($0.2) million for fiscal year
1997. The significant financing activities for PPR in fiscal year 1998 were
the infusion of equity related to the common stock sale attendant to the
change of control of $23.1 million, net of issuance costs, and repayment of
$7.9 million of short and long-term debt. The significant financing activity
of PPR in fiscal year 1997 was the net repayment of indebtedness of $0.2
million. In the future, the payment of

73
<PAGE>

dividends will be dependent on the achievement of adequate levels of
profitability in PPR's Puerto Rican operations, and, under certain conditions,
the consent by Banco Popular. PPR does not expect to pay any dividends for the
foreseeable future.

Year 2000 Readiness Disclosure

The Year 2000 problem concerns the ability of information systems and
equipment controlled by computer chips and systems to properly recognize and
process date-sensitive information on and beyond January 1, 2000. The risks
from this date change are both internal and external and can potentially
affect PPR's production, distribution and administrative systems and PPR's
customers, suppliers of raw materials, utilities and distribution services.
Year 2000 related problems could prevent customers from accepting deliveries
from PPR or processing payments for amounts due to PPR. Suppliers may be
prevented from producing and supplying goods or services essential to PPR's
business.

Delta provides information services to PPR, including the use of information
systems and technology, under an accounting services agreement executed in
fiscal year 1998. PPR completed its transition to Delta's systems, hardware
and software during the first quarter of 1999. Below is a discussion of PPR's
Year 2000 readiness and planning status, which has been patterned after
Delta's Year 2000 planning.

PPR's production facility uses equipment that operates using computer
control systems based upon programmed logic controllers. PPR completed a Year
2000 compliance evaluation of these systems. PPR also uses computer systems to
forecast demand, order raw materials, monitor inventory levels, ship product
and record shipments. The software that runs these processes is a combination
of commercially available software and internally developed applications.
PPR's initial assessment indicated that these applications were Year 2000
compliant, and PPR, through Delta, has completed the testing of these
applications. PPR relies on a supply chain to produce and distribute its
products from manufacturing facilities to distribution warehouses and finally
to customers. PPR's distribution centers use a common supply chain management
application that is Year 2000 compliant.

In order to assess the external risks to PPR, Delta distributed Year 2000
readiness surveys to PPR's suppliers and key customers. PPR is waiting for the
responses from suppliers and customers to complete the assessment.

PPR has not incurred material incremental costs associated with its Year
2000 plan. This is due in part to the recent conversion to systems provided by
Delta. Within the last 18 months, Delta has replaced most software
applications in use before 1993 with systems that are Year 2000 compliant. PPR
believes that the remaining costs associated with addressing Year 2000
compliance issues will not be material.

PPR's most likely potential risk with regard to Year 2000 issues is the
temporary inability of suppliers to provide supplies of raw materials to PPR.
The inability of PPR's suppliers to be Year 2000 ready could result in delays
in product manufacturing and delivery, thereby adversely affecting the
business or operations of PPR. PPR believes, however, that in a worst case
scenario any disruption in supply materials can be minimized by relying on
inventories or shifting production to unaffected plants with some increase in
distribution costs.

PPR recognizes the need for Year 2000 contingency plans in the event that
remediation is not fully successful or that the remediation efforts of its
vendors and suppliers are not timely completed. PPR plans to address
contingency planning during calendar 1999. Such plans will include building
inventories of raw materials and finished goods in advance of January 1, 2000
to protect against supply and production disruptions. To the extent that PPR's
vendors and suppliers are unable to provide sufficient evidence of Year 2000
readiness by September 30, 1999, PPR will seek to arrange for their
replacement. Additionally, PPR is developing manual processes to replace
electronic applications in the event of their failure.

74
<PAGE>

Inflation

There was no significant impact on PPR's operations as a result of inflation
during the six months ended June 30, 1999, the three months ended December 31,
1998, or the fiscal years ended September 30, 1998, 1997 or 1996.

Impact of Changes in Accounting Standards

Effective October 1, 1998, PPR adopted the provisions of SFAS No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits"
which required, among other items, additional disclosures on changes in PPR's
pension benefit obligations and fair values of plan assets. PPR adopted the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share," in fiscal year 1998 which require the presentation of a
basic and diluted earnings per share for all periods presented. Accordingly,
PPR's net loss per common share was computed by dividing the net loss by the
weighted average number of common shares outstanding. Net loss per common
share-assuming dilution did not include PPR's potentially dilutive securities
because to do so would have been antidilutive. PPR also adopted the provisions
of SFAS No. 130, "Reporting Comprehensive Income," in fiscal year 1998. This
statement established standards for the reporting and display of comprehensive
income and its components.

Quantitative and Qualitative Disclosures About Market Risk

PPR uses financial instruments, primarily variable rate debt, to finance
operations, for capital expenditures and for general corporate purposes. PPR's
exposure to market risk for changes in interest rates relates primarily to
investments, and short- and long-term debt obligations. PPR places its
investments in high-quality securities with major financial institutions while
limiting exposure to any one issuer. PPR does not use derivative financial
instruments or engage in trading activities. There were no significant changes
in PPR's exposure to market risk for changes in interest rates during the six
months ended June 30, 1999.

The table below summarizes the principal cash flows of PPR's financial
instruments outstanding at December 31, 1998, categorized by type of
instrument and by year of maturity.

<TABLE>
<CAPTION>
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
------- ------ ------ ------ ------ ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents-
Deposit and money
market accounts...... $10,418 $ -- $ -- $ -- $ -- $ -- $10,418 $10,418
Short-term investment
(4.5% at December 31,
1998)................ 9,000 -- -- -- -- -- 9,000 9,000
Long-term debt-
Term loan, interest at
2.5% over LIBOR or at
prime (7.2% at
December 31, 1998)... 1,007 1,157 1,225 1,250 1,437 16,972 23,048 23,048
</TABLE>

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

On August 24, 1998, PPR engaged Arthur Andersen LLP ("Arthur Andersen") as
its principal independent accountants to audit its financial statements. On
the same date, PPR informed KPMG Peat Marwick LLP ("KPMG") that KPMG would no
longer serve as PPR's independent auditor. The replacement of KPMG by Arthur
Andersen was approved by PPR's Board of Directors on August 5, 1998.

KPMG's reports on PPR's financial statements for the two fiscal years
preceding its dismissal did not contain an adverse opinion or a disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or

75
<PAGE>

accounting principles. There were no disagreements, during or subsequent to
PPR's past two fiscal years to August 24, 1998, between PPR and KPMG on any
matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which, if not resolved to KPMG's satisfaction,
would have caused KPMG to make reference to the subject matter of such
disagreements in connection with its report.

DELTA BEVERAGE GROUP, INC.

Business

Delta's exclusive franchise territories cover portions of Arkansas,
Louisiana, Mississippi, Tennessee and Texas and include the cities of New
Orleans, Memphis, Little Rock, Shreveport, Baton Rouge and Tupelo. In the
aggregate, there are approximately seven million people in Delta's
territories. Delta has the exclusive right within its territories to
manufacture and/or distribute the following families of products: PEPSI-COLA
(cola), MOUNTAIN DEW (heavy citrus), 7UP (lemon-lime), SLICE (orange), OCEAN
SPRAY (juices), LIPTON (iced teas), SQUIRT (heavy citrus), COUNTRY TIME
(lemonade), CANADA DRY (ginger ale), CRUSH (fruit), HAWAIIAN PUNCH (fruit),
MUG (root beer), ALL SPORT (sport drink), YOO-HOO (chocolate), CRYSTAL LIGHT
(diet) and various other product offerings. In addition, Delta is the largest
distributor of Miller products in the state of Louisiana and has the exclusive
right to distribute Miller and Heineken USA Incorporated products in greater
New Orleans, Louisiana.

Delta believes its success as an independent bottler is due primarily to its
ability to produce efficiently and to market and distribute effectively its
national brands. Delta's products include highly recognizable trademarks, most
of which are supported by considerable national advertising expenditures made
by the franchiser. In 1998, for example, PepsiCo spent in excess of $165
million in national advertising to advertise PepsiCo products. Furthermore,
all of Delta's territories are located in the southern region of the U.S. that
historically has posted above average per capita consumption of soft drinks.

Delta operates two soft drink production facilities, one in Collierville,
Tennessee, and the other in Reserve, Louisiana, with a total annual production
capacity of 74.3 million cases. Delta distributes approximately 97% of its
soft drink products to retail outlets through its computerized direct store
delivery ("DSD") system. Delta's DSD system utilizes hand-held computer
technology to receive orders from and process deliveries to Delta's customers.
Through its DSD system and its 24 warehouse distribution facilities
strategically located throughout its territories, Delta services and
distributes products to over 32,000 retail outlets in five states. Retail
customers in Delta's territories include The Kroger Company, Wal-Mart Stores,
Inc., Winn-Dixie Stores, Inc. and Circle K Convenience Stores, Inc. Delta
tracks its product sales daily and uses this information to plan its
production, which is subject to seasonal swings in demand, and to interpret
and react to changes in consumer buying patterns. This allows Delta to provide
efficient and effective service to its retail customers.

Pursuant to a Joint Venture Agreement, Delta and Poydras Street Investors
LLC, a Louisiana limited liability company, formed the Pepsi Cola/Seven-Up
Beverage Group of Louisiana, a Louisiana general partnership (the "Louisiana
Joint Venture"). The Louisiana Joint Venture distributes soft drinks in New
Orleans and Baton Rouge, Louisiana, pursuant to franchise agreements entered
into or assumed by the Louisiana Joint Venture. The soft drink products
distributed by the Joint Venture are supplied by Delta. The Louisiana Joint
Venture also distributes Miller and Heineken beer products in greater New
Orleans.

76
<PAGE>

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations

General

Delta was acquired by its current owners in March 1988 in a highly leveraged
transaction which was premised on a turnaround of operations and expansion of
business opportunities. The results of operations started to reflect a
significant turnaround in 1990 when the current senior management group took
office. Delta has accomplished a number of business combinations since 1988,
the most significant of which have been (i) combining in 1992 its PepsiCo
based sales operation in southern Louisiana with a Seven-Up based sales
operation in the same territory through a joint venture in which Delta is
majority owner and managing venturer and (ii) acquiring in April 1995 the
distribution rights for Miller products in a significant portion of the joint
venture territory.

In September 1993, Delta issued the 1993 Senior Notes (the "1993 Senior
Notes"), the Subordinated Notes and other equity to refinance the debt
incurred in 1988. As a result, Delta's interest expense burden was
substantially reduced. However, effective in May 1996, the interest rate on
the 1993 Senior Notes was adjusted as part of obtaining covenant waivers
necessitated by the down-turn in operating results in 1995. Delta fully repaid
the 1993 Senior Notes in December 1996 with proceeds received from the
issuance of the new Senior Notes (the "Notes").

As is typical of acquisitions in the beverage industry, Delta's balance
sheet reflects significant allocation of purchase price to the cost of
franchise rights in excess of net assets acquired ($107.2 million, $109.0
million and $112.6 million, each net of accumulated amortization, at June 30,
1999, December 31, 1998 and December 31, 1997, respectively). Amortization of
the cost of (i) franchises, (ii) obtaining financing and (iii) non-compete
agreements from former owners constitutes a significant non-cash charge to
operations.

Delta accumulated significant tax-basis net operating loss carryforwards
(NOL's) during the turnaround period prior to the 1993 recapitalization.
Management believes the NOL's will be utilized before their expiration to
offset future income otherwise taxable. A deferred income tax asset
representing the income tax benefit to be realized through future utilization
of the NOL's was recorded on Delta's balance sheet in 1993 following the
recapitalization. Provision for income taxes related to the results of
operations for years subsequent to and including 1993 are substantially offset
against the deferred income tax asset and thus are effectively a non-cash
charge to operations.

Delta's primary measurement of unit volume is franchise case sales which are
case-sized quantities of the various packages in which products are produced.
Franchise case sales refers to physical cases of beverages sold. Delta also
sells premix or draft products (ready-to-serve beverages which are sold in
tanks or kegs) and postmix products (fountain syrups to which carbonated water
must be added). Premix and postmix products, while effectively containing the
identical beverages as packaged product, are not included in case sales
measurements as they are not the primary focus of Delta's selling efforts.

Delta's primary source of revenue is franchise sales of Delta's branded
products directly to retailers whether of package, premix or postmix
configuration. Another source of revenue is contract sales, which are sales,
primarily of products in cans, to unaffiliated companies that hold soft drink
franchises. Contract sales, which historically represent approximately 10.0%
to 12.0% of total net sales, may fluctuate from year to year, and are made at
relatively low prices and gross profit margins due to the competition for such
sales, and are not a primary focus of management in determining Delta's
business strategy. As a result, management believes that changes in franchise
case sales more accurately measure growth than changes in total net sales.

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30,
1998

Net sales, excluding contract sales, for the three months ended June 30,
1999 increased by 1.2% to $85.7 million compared to $84.8 million for the same
period in 1998. The increase was due to a 4.9% increase in franchise case
sales volume, primarily of Delta's take-home packages of soft drinks, offset
by a decrease in

77
<PAGE>

average net sales pricing per franchise case of approximately 4.3%. The
decrease in average selling price was due to an increase in the proportion of
take-home packages as compared to total volume and an increase in support
given to retailers featuring those packages. In addition, the average selling
price of single serve packages of soft drinks increased as the result of
continued expanded placement of marketing equipment. Contract net sales for
the three months ended June 30, 1999 decreased 4.8%, as compared to the same
period in 1998. The decrease was primarily due to a shift in sales mix volume
from two liter bottles to cans. Contract net sales represented 11.1% of net
sales for the three months ended June 30, 1999, compared to 11.8% of net sales
for the same period in 1998. As a result of the foregoing, aggregate net sales
for the three months ended June 30, 1999 increased 0.5% to $96.5 million
compared to $96.0 million for the same period in 1998.

Cost of sales for the three months ended June 30, 1999 decreased to $65.7
million compared to $65.9 million for the same period in 1998. The decrease
was primarily due to lower cost of packaging and the effect of higher volume
on manufacturing overhead. As a percentage of net sales, cost of sales for the
three months ended June 30, 1999 decreased to 68.1% compared to 68.6% for the
same period in 1998. The improved margin associated with the single-serve
packages of soft drinks and the increase in soft drink franchise case sales
resulted in gross profit for the three months ended June 30, 1999 of $30.8
million or 2.1% more than the gross profit of $30.2 million for the same
period in 1998.

Selling, general and administrative expenses for the three months ended June
30, 1999 increased to $22.7 million compared to $22.4 million for the same
period in 1998. Selling, general and administrative expenses are comprised of
selling, distribution and warehousing expenses, advertising and marketing
expenses, and general and administrative expenses ("G&A"). G&A increased by
$0.2 million due primarily to increased personnel costs and insurance costs.
All expenses grew at a rate less than volume growth.

As a result of the above factors, income from operations for the three
months ended June 30, 1999 increased to $7.2 million, or 7.4% of net sales,
compared to $6.9 million, or 7.2% of net sales, for the same period in 1998.

Interest expense for the three months ended June 30, 1999 increased to $4.9
million from $4.7 million for the same period in 1998. The increase was due
primarily to the additional interest associated with additional Subordinated
Notes ("Delta PIK Notes") issued by Delta to pay the interest on the
Subordinated Notes.

Delta had income before income taxes and minority interest of $2.2 million
for the three months ended June 30, 1999 which was consistent with the same
period in 1998.

Delta's effective income tax rate differs from statutory rates due to
several factors. The most significant factor is the non-tax-deductibility of
franchise cost amortization. For interim periods, income tax expense and
benefit are provided at the effective rate projected for a full fiscal year.

As a result of the foregoing factors, Delta had a net loss of $2.1 million
for the three months ended June 30, 1999 compared to net income of $0.7
million for the same period in 1998.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Net sales, excluding contract sales, for the six months ended June 30, 1999
increased by 3.5% to $157.2 million compared to $151.9 million for the same
period in 1998. The increase was due primarily to a 7.5% increase in soft-
drink franchise case sales. There was strong consumer demand for Delta's soft
drink products in single-serve packages which was the result of expanded
placement of single-serve marketing equipment. The effect of the demand for
single-serve packages was, however, partially offset by the effect of
competition on net pricing in Delta's take-home soft drink packages. Contract
net sales for the six months ended June 30, 1999 increased 2.9% compared to
the same period in 1998. As a result of the foregoing, aggregate net sales for
the six months ended June 30, 1999 increased 3.5% to $177.7 million compared
to $171.8 million for the same period in 1998.

Cost of sales for the six months ended June 30, 1999 increased to $122.0
million compared to $119.3 million for the same period in 1998. The increase
was due primarily to the 7.5% increase in franchise case sales as well as

78
<PAGE>

the higher unit cost of purchasing beer from breweries. As a percentage of net
sales, cost of sales for the six months ended June 30, 1999 decreased to 68.6%
compared to 69.4% for the same period in 1998. The improved margin associated
with single-serve packages of soft drinks and the increase in soft drink
franchise case sales resulted in gross profit for the six months ended June
30, 1999 of $55.8 million, 6.2% greater than the gross profit of $52.5 million
for the same period in 1998.

Selling, general, and administrative expenses for the six months ended June
30, 1999 increased to $44.6 million compared to $43.4 million for the same
period in 1998. Selling and distribution expenses increased by $0.4 million
due to the placement of equipment dedicated to single-serve packages of soft
drinks. G&A increased by $0.8 million due primarily to increased personnel
costs and insurance costs.

As a result of the above factors, income from operations for the six months
ended June 30, 1999 increased to $9.3 million, or 5.3% of net sales, from $7.3
million, or 4.3% of net sales, for the same period in 1998. Delta's operating
results are affected by seasonal demand for its products which generally
results in higher sales and operating income in the second and third quarters
of each fiscal year.

Interest expense for the six months ended June 30, 1999 increased to $9.6
million from $9.4 million for the same period in 1998. The increase was due
primarily to the additional interest associated with additional PIK Notes
issued by Delta to pay the interest on the Subordinated Notes.

As a result of the above factors, Delta had a loss before income taxes and
minority interest of $0.3 million for the six months ended June 30, 1999,
compared to a loss before income taxes and minority interest of $2.1 million
for the same period in 1998.

Delta's effective income tax rate differs from statutory rates due to
several factors. The most significant factor is the non-tax-deductibility of
franchise cost. For interim periods, income tax expense and benefit are
provided at the effective rate projected for a full fiscal year.

As a result of the foregoing factors, Delta had a net loss of $0.1 million
for the six months ended June 30, 1999, compared to a net loss of $0.6 million
for the same period in 1998.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Net sales, excluding contract net sales, for the year ended December 31,
1998 increased by 3.7% to $307.2 million compared to $296.1 million for the
same period in 1997. The increase was due primarily to a 4.5% increase in
franchise case sales, of which (i) 4.0% was attributable to increased sales of
Delta's soft drink products including an increase in average unit selling
price of 0.7% and (ii) 0.5% was attributable to increased sales of Delta's
beer products including a 1.2% increase in average unit selling prices. The
majority of the increase in soft drink franchise case sales came in single-
serve packages and also in take home soft drinks. Pricing for soft drink
packages overall in 1998 was relatively consistent with the prior year
although the pricing effect of a greater proportion of sales of single-serve
packages was offset by moderate decreases in pricing of take-home packages.
Beer pricing increased, reflecting industry trends and an increase in the
proportion of premium beer sales to total beer sales. Contract net sales for
the year ended December 31, 1998 increased 55.5% compared to the same period
in 1997 due to the addition of product requirements for an existing can
product customer. As a result of the foregoing, net sales for the year ended
December 31, 1998 increased 8.9% to $352.1 million compared to $323.2 million
for the same period in 1997.

Cost of sales for the year ended December 31, 1998 increased to $245.7
million compared to $216.6 million for the same period in 1997. The increase
was due primarily to an increase in franchise case sales offset by a decrease
in the unit prices paid by Delta for certain soft drink raw materials,
primarily packaging materials and sweetener. In addition, the significant
increase in the contract packaging business had the effect of reducing average
unit cost of sales by spreading fixed manufacturing costs over a greater
volume. As a percentage of net sales, cost of sales for the year ended
December 31, 1998 increased to 69.8% compared to 67.0% for the same period in
1997 due primarily to the effect of the substantial increase in contract net
sales. As a result of the foregoing, gross profit for the year ended December
31, 1998 was $106.4 million compared to $106.7 million for the same period in
1997.

79
<PAGE>

Selling, general and administrative expenses for the year ended December 31,
1998 increased to $87.0 million compared to $83.3 million for the same period
in 1997. Selling, general and administrative expenses are comprised of
selling, distribution and warehousing expenses ("S&D"), advertising and
marketing expenses, and general and administrative expenses. All categories
grew at a rate consistent with franchise case sales growth. Thus, the effect
of leveraging fixed costs against higher unit volumes was partially offset by
increases in S&D due to expenses related to and the placement of equipment
dedicated to single-serve packages of soft drinks.

As a result of the above factors, income from operations for the year ended
December 31, 1998 decreased to $15.7 million, or 4.5% of net sales, compared
to $19.7 million, or 6.1% of net sales, for the same period in 1997.

Interest expense for the year ended December 31, 1998 increased to $18.8
million from $17.9 million for the same period in 1997. The increase was due
primarily to higher utilization of Delta's credit facility and the effect of
payment-in-kind of interest on its subordinated debt.

As a result of the above factors, Delta realized a loss before income taxes
and minority interest of $3.2 million for the year ended December 31, 1998
compared to income of $1.8 million for the same period in 1997.

Delta's effective income tax rate differs from statutory rates due primarily
to the non-tax deductibility of franchise cost amortization.

As a result of the foregoing factors, Delta had a net loss of $3.3 million
for the fiscal year ended December 31, 1998 compared to a net loss of $0.1
million for the same period in 1997.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Net sales, excluding contract net sales, for the year ended December 31,
1997 increased by 3.0% to $296.1 million compared to $287.4 million for the
same period in 1996. The increase was due primarily to a 2.6% increase in
franchise case sales, of which (i) 2.5% was attributable to increased sales of
Delta's soft drink products accompanied by an increase in average unit selling
price of 0.2% and (ii) 0.1% was attributable to increased sales of Delta's
beer products accompanied by a 2.0% increase in average unit selling prices.
The majority of the increase in soft drink franchise case sales came in
single-serve packages, although unit volume of take home soft drink and beer
packages also increased. Pricing for soft drink packages overall was
relatively consistent with the same period of the prior year although the
pricing effect of a greater proportion of sales of single-serve packages was
offset by moderate decreases in pricing of take-home packages. Beer pricing
increased, reflecting industry trends and an increase in the proportion of
premium beer sales to total beer sales. Contract net sales for the year ended
December 31, 1997 increased 8.9% compared to the same period in 1996. As a
result of the foregoing, net sales for the year ended December 31, 1997
increased 3.5% to $323.2 million compared to $312.3 million for the same
period in 1996.

Cost of sales for the year ended December 31, 1997 increased to $216.6
million compared to $215.1 million for the same period in 1996. The increase
was due primarily to an increase in franchise case sales offset by a decrease
in the unit prices paid by Delta for certain soft drink raw materials,
primarily packaging materials and sweetener. In addition, the significant
increase in the contract packaging business had the effect of reducing average
unit cost of sales by spreading fixed manufacturing costs over a greater
volume. As a percentage of net sales, cost of sales for the year ended
December 31, 1997 decreased to 67.0% compared to 68.9% for the same period in
1996. The improved margin associated with single-serve packages of soft drinks
and premium beer brands and increased franchise case sales resulted in gross
profit for the year ended December 31, 1997 of $106.7 million or 9.8% greater
than the gross profit of $97.2 million for the same period in 1996.

Selling, general and administrative expenses for the year ended December 31,
1997 increased to $83.3 million compared to $76.9 million for the same period
in 1996. All categories grew at a rate consistent with sales growth,
reflecting the effect of leveraging fixed costs against higher unit volumes,
partially offset by increases in selling, distribution and warehousing
expenses due to expenses related to and placement of equipment dedicated to
single-serve packages of soft drinks. In addition, the increase reflected
increases in general and administrative expenses due to provisions for
incentive compensation plans based on the attainment of targeted

80
<PAGE>

performance. The level of expenditure for such incentives in 1997 exceeded
comparable expenditures during 1996 by approximately $2.3 million.

As a result of the above factors, income from operations for the year ended
December 31, 1997 increased to $19.7 million, or 6.1% of net sales, compared
to $16.7 million, or 5.3% of net sales, for the same period in 1996.

Interest expense for the year ended December 31, 1997 increased to $17.9
million from $15.1 million for the same period in 1996. The increase was due
to the higher interest rates associated with the December 1996 refinancing of
Delta's senior debt and the effect of payment-in-kind of interest on its
subordinated debt. The total debt service requirements of Delta have been
reduced through elimination of current principal payments on senior
indebtedness.

As a result of the above factors, Delta generated income before income
taxes, minority interest and extraordinary items of $1.8 million for the year
ended December 31, 1997 compared to $0.9 million for the same period in 1996.

Delta's effective income tax rate differs from statutory rates due primarily
to the non-tax deductibility of franchise cost amortization.

As a result of the foregoing factors, Delta had a net loss of $0.1 million
for the fiscal year ended December 31, 1997 compared to a net loss of $2.3
million for the fiscal year ended December 31, 1996. The 1996 Delta loss
includes an extraordinary item (loss on extinguishment of debt) of $1.5
million, net of an income tax benefit of $1.0 million.

Liquidity and Capital Resources

General

Based on anticipated operating results, management does not expect Delta's
future operating activities will generate sufficient cash flows to repay in
their entirety its $120.0 million of Notes payable at their maturity on
December 15, 2003. While management believes Delta will be able to refinance
the Notes at or prior to their maturity, or raise sufficient funds through
equity or assets sales to repay such indebtedness, or effect a combination of
the foregoing, there can be no assurance that it will be able to do so.

Delta has Subordinated Notes payable with a balance of $51.2 million at June
30, 1999, $48.6 million at December 31, 1998 and $43.6 million at December 31,
1997. The Subordinated Notes mature on December 23, 2003. However, the
maturity of the Subordinated Notes can be extended to December 23, 2004 and
then to December 23, 2005 if any debt incurred to refinance the 1993 Senior
Notes is then outstanding. The Subordinated Notes have an interest rate of
11.0% which can be paid under certain conditions with Delta PIK Notes.
Management expects those conditions will exist at least until December 1999
and that it will make payments of interest in Delta PIK Notes to conserve
cash. Management does not expect that Delta's future operating activities will
generate sufficient cash flows to repay the Subordinated Notes at their
maturity. While management believes that Delta will be able to refinance the
Subordinated Notes, including any Delta PIK Notes, at or prior to their
maturity, or raise sufficient funds though equity or asset sales to repay such
indebtedness, or effect a combination of the foregoing, there can be no
assurance that it will be able to do so.

Delta's principal use of funds until 2003 will be the payment of interest
and investment in capital assets and strategic acquisitions. It is expected
that Delta's primary sources of funds for its future activities will be
operations. While Delta does not currently anticipate utilizing the funds
available under its credit agreement for other than seasonal working capital
requirements, such funds may be used to augment operating cash flow. Pursuant
to the credit agreement, Delta has a borrowing capacity of up to $30.0
million, including $10.0 million available for the issuance of letters of
credit. At June 30, 1999, December 31, 1998 and December 31, 1997, $8.9
million, $5.6 million, and $0, respectively, had been drawn on the credit
agreement. The credit facility will mature in 2001 based on Delta's
anticipated operating results. Management believes that Delta's future
operating activities will generate sufficient cash flows to repay borrowings
under the credit agreement as they become due and payable.

81
<PAGE>

Management believes that Delta's production facilities will be sufficient to
meet anticipated unit growth for the next several years. Accordingly,
management anticipates the capital expenditures in respect of such facilities
will consist of expenditures to maintain operating efficiency. Capital
expenditures will be required primarily for Delta's automobile and truck
fleet, vending machines, and routine plant, bottling and canning equipment
additions or maintenance. During the six months ended June 30, 1999, capital
expenditures totaled $8.6 million. During the years ended December 31, 1998
and 1997, capital expenditures totaled $14.9 million and $15.0 million,
respectively. Delta anticipates that capital expenditures will total
approximately $12.5 million in fiscal year 1999.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Delta had cash of $4.0 million and working capital of $34.1 million at June
30, 1999, compared to cash of $3.8 million and working capital of $32.5
million at December 31, 1998. Working capital represents current assets
(excluding cash and cash equivalents) less current liabilities (excluding
current maturities of long-term debt and other long-term liabilities).

The $0.2 million increase in cash from December 31, 1998 to June 30, 1999
resulted from net cash provided by operations of $8.8 million, augmented by
$3.1 million provided by net financing activities, less cash used by investing
activities of $11.8 million. The cash provided by operations was net of a $1.6
million increase in working capital. In the same period in 1998, cash
increased by $0.3 million resulting from net cash provided by operations of
$8.4 million and from net financing activities of $5.0 million less cash used
by investing activities of $13.1 million.

Cash used in investing activities of $11.8 million in the six months ended
June 30, 1999 represented a $1.3 million decrease from cash used in the same
period of 1998. The higher amount in 1998 was primarily for marketing
equipment related to single-serve packages of soft drinks.

Financing activities in the six months ended June 30, 1999 provided $3.1
million in net cash, which represented a $1.9 million decrease over the $5.0
million in net cash provided in the same period of 1998. This decrease in net
cash provided resulted primarily from credit agreement advances of
approximately $7.0 million less credit agreement payments of approximately
$4.5 million. The lower level of capital expenditures required less reliance
on the credit agreement in 1999.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Delta had cash of $3.8 million and working capital of $32.5 million at
December 31, 1998, compared to cash of $4.7 million and working capital of
$35.4 million at December 31, 1997. Working capital represents current assets
(excluding cash and cash equivalents) less current liabilities (excluding
advances under the credit agreement and current maturities of long-term debt
and other liabilities).

The $0.9 million decrease in cash from December 31, 1997 to December 31,
1998 resulted from net cash provided by operations of $17.0 million less cash
used in investing activities of $22.6 million plus cash provided by financing
activities of $4.7 million during the year. The cash provided by operations in
1998 was $6.9 million greater than provided in 1997 due principally to a
reversal in the growth of working capital. In 1997, working capital grew $10.2
million and in 1998 decreased by $0.6 million primarily due to changes in
inventory and current liabilities.

Cash used in investing activities of $22.6 million in the year ended
December 31, 1998 was a $6.4 million increase over the cash used during 1997.
Cash used in investing activities included capital expenditures of
$14.9 million in the year ended December 31, 1998, a $0.1 million decrease
from 1997, and included $7.5 million used for expenditures to secure long-term
marketing relationships.

Financing activities in the year ended December 31, 1998 provided $4.7
million in net cash which represented a $6.2 million increase over the $1.5
million in net cash used in the same period in 1997. This increase in net cash
provided resulted primarily from net credit agreement advances of
approximately $5.6 million.

82
<PAGE>

Year 2000 Readiness Disclosure

The term "Year 2000" is used to describe general problems that may result
from improper processing of dates and date-sensitive calculations by computers
or other machinery as the year 2000 is approached and reached. This problem
stems from the fact that many of the world's computer hardware and software
applications have historically used only the last two digits to refer to a
year. As a result, many of these computer programs do not or will not properly
recognize a year that begins with "20" instead of the familiar "19." If not
corrected, many computer applications could fail or create erroneous results.

The risks from this date change are both internal and external and can
potentially affect Delta's production, distribution and administrative systems
and Delta's customers, suppliers of raw materials, utilities and distribution
services. Year 2000 related problems could prevent customers from accepting
deliveries from Delta or processing payments for amounts due to Delta.
Suppliers may be prevented from producing and supplying goods or services
essential to Delta's business.

PepsiCo distributed to its franchisees its Year 2000 compliance plan, which
Delta used as a framework for the development and implementation of its own
Year 2000 compliance. Delta evaluated its information technology ("IT")
systems for Year 2000 compliance. Delta also assessed its non-IT systems (i.e.
embedded technology such as microprocessors in manufacturing and other
equipment). Delta has completed its assessment of IT and non-IT systems, with
the exception of its HVAC system, copiers and fax machines.

Currently, Delta is modifying both IT and non-IT systems to make them Year
2000 compliant. In instances where modifications have been completed or were
not required, Delta is testing the systems to ensure Year 2000 compliance.

Delta uses outside vendors to supply its most significant data processing
software. These vendors have indicated their products are Year 2000 compliant
or will be Year 2000 compliant by year end. Delta also relies on third party
suppliers for raw materials. Delta has contacted each of its critical
suppliers to assess their readiness and to determine the extent to which Delta
may be vulnerable to such parties' failure to resolve their own Year 2000
issues. Due to delays in receiving responses from suppliers, Delta now expects
this effort to be completed by September 30, 1999.

Delta does not expect the cost of becoming Year 2000 compliant to be
material to its consolidated financial condition or results of operations.
This is due, in part, to Delta's recent significant upgrades to its data
communication network and key data processing hardware, all of which are Year
2000 compliant.

Delta recognizes that Year 2000 issues constitute a material known
uncertainty. Delta also recognizes the importance of ensuring that Year 2000
issues will not adversely affect its operations. Delta believes that the
processes described above will be effective to manage the risks associated
with the problem. However, there can be no assurance that the processes can be
completed on the timetable described above or that remediation will be fully
effective. The failure to identify and remediate Year 2000 issues, or the
failure of key vendors, suppliers or other critical third parties who do
business with Delta to timely remediate their Year 2000 issues could cause an
interruption in the business operations of Delta. At this time, however, Delta
does not possess information necessary to estimate the overall potential
financial impact of Year 2000 compliance issues.

Delta's worst case scenario would be the temporary inability of suppliers to
provide supplies of raw materials to Delta. The inability of Delta's suppliers
to be Year 2000 ready could result in delays in product manufacturing and
delivery, thereby adversely affecting the business or operations of Delta.
Delta believes, however, that in a worst case scenario any disruption in
supply materials can be minimized by relying on inventories or shifting
production to unaffected plants with some increase in distribution costs.

Delta recognizes the need for Year 2000 contingency plans in the event that
remediation is not fully successful or that the remediation efforts of its
vendors and suppliers are not timely completed. Delta plans to address
contingency planning during calendar 1999. Such plans will include building
inventories of raw materials and

83
<PAGE>

finished goods in advance of January 1, 2000 to protect against supply and
production disruptions. To the extent that Delta's vendors and suppliers are
unable to provide sufficient evidence of Year 2000 readiness by September 30,
1999, Delta will seek to arrange for their replacement. Additionally, Delta is
developing manual processes to replace electronic applications in the event of
their failure. Finally, Delta is working with its customers to build customer
inventory levels at year-end as a contingency against company or customer Year
2000 failure.

Inflation

There was no significant impact on Delta's operations as a result of
inflation during the six months ended June 30, 1999 or the years ended
December 31, 1998, 1997 or 1996.

Quantitative and Qualitative Disclosures About Market Risk

Delta uses financial instruments, including fixed and variable rate debt, to
finance operations, for capital expenditures and for general corporate
purposes. Delta's exposure to market risk for changes in interest rates
relates primarily to short- and long-term debt obligations. Delta does not use
derivative financial instruments or engage in trading activities. There were
no significant changes in Delta's exposure to market risk for changes in
interest rates during the six months ended June 30, 1999.

The table below summarizes the principal cash flows of Delta's financial
instruments outstanding at December 31, 1998, categorized by type of
instrument and by year of maturity.

<TABLE>
<CAPTION>
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
------ ---- ------ ---- -------- ---------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents-
Deposit and money
market accounts...... $3,818 $-- $ -- $-- $ -- $ -- $ 3,818 $ 3,818
Long term debt-
Senior notes payable
(interest at 9.75%).. -- -- -- -- 120,000 -- 120,000 123,501
Subordinated notes
payable (interest at
11%)................. -- -- -- -- 48,573 -- 48,573 51,702
Revolving line of
credit-
Swing line facility
(7%average interest
rate)................ -- -- 2,500 -- -- -- 2,500 2,500
All other (10.8%
average interest
rate)................ -- -- 3,100 -- -- -- 3,100 3,100
Other current and long
term obligations....... 240 154 34 -- -- 6,129 6,557 6,557
</TABLE>

84
<PAGE>

DAKOTA BEVERAGE COMPANY, INC.

Business

Dakota operates 12 Pepsi-Cola bottling franchises in northwestern and
southwestern Minnesota, eastern North and South Dakota and northwestern Iowa.
Major population centers in the franchise territories include Warroad, Thief
River Falls and Ortonville, Minnesota; Bismarck, Fargo and Grand Forks, North
Dakota; Aberdeen, Sioux Falls and Watertown, South Dakota; and Estherville,
Iowa. Dakota is a wholly owned subsidiary of Pohlad Companies.

Dakota's operations are conducted under exclusive, perpetual franchise
agreements with PepsiCo in all of its territories and Cadbury Schweppes and
recognizable allied brands in portions of its territories.

Dakota purchases all of its bottled and canned soft drink products from Wis-
Pak, Inc., a soft drink bottling and canning cooperative. Dakota owns and
operates one bottle production line with an annual capacity of approximately
2.5 million cases and a fountain syrup production line. Dakota's bottling line
is dedicated to the production of soft drinks exclusively for Wis-Pak.

Wis-Pak currently operates five filling plants and two plastic bottle
manufacturing plants and is one of the largest soft drink manufacturing
operations in the United States. Production for the year ended December 31,
1998 was 133 million units (cases/gallons).

The bottlers who are members of Wis-Pak, including Dakota, have entered into
long term contracts under which they agree to purchase 100% of their annual
requirements of bottled and canned Pepsi products from Wis-Pak. Prices for
product are established by Wis-Pak and approved by Wis-Pak's Board of
Directors. Rebates are distributed to the shareholders annually based on Wis-
Pak's profitability. Dakota is the second largest shareholder in Wis-Pak with
a 12% economic interest. Dakota has historically purchased approximately 11%
of Wis-Pak's production annually. Dakota has one seat on Wis-Pak's 12 member
Board of Directors.

Dakota and Wis-Pak purchase their primary raw materials through Consolidated
Purchasing Group ("CPG"). Formed in 1991, CPG is a purchasing cooperative
comprised of 130 independent Pepsi-Cola bottlers. Membership in CPG has
resulted in lower raw material costs due to CPG purchasing in large
quantities. Raw materials not purchased from CPG include product concentrate,
which can only be purchased from the franchiser, and aluminum cans.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations

General

As is typical in the beverage industry, Dakota's balance sheet reflects
significant allocation of purchase price to the cost of franchise rights in
excess of net assets acquired ($12.8 million, $12.4 million and $12.7 million,
each net of accumulated amortization, at June 30, 1999, December 31, 1998 and
1997, respectively).

Effective January 1, 1997, Dakota elected S Corporation status under the
applicable Internal Revenue Code and Minnesota Income Tax sections, whereby
the taxable income and any available tax credits of Dakota are included in the
income tax return of its shareholder. As part of the change in tax status, in
1997, Dakota eliminated the effect of all basis differences. The effect of
these basis differences at January 1, 1997 was $2.5 million in the aggregate
and was recorded in the statement of operations as a benefit for income taxes.
As Dakota is no longer required to pay income taxes, no provision for income
taxes has been included in the operating results for the years ended December
31, 1998 and 1997.

Dakota's primary measure of unit volume is franchise case sales, which are
case-sized quantities of the various bottle and can packages in which products
are produced. Franchise case sales refers to physical cases of beverages sold.
Dakota also sells premix (ready-to-serve beverages which are sold in tanks)
and postmix products (fountain

85
<PAGE>

syrups to which carbonated water must be added). Premix and postmix products,
while effectively containing the identical beverages as packaged product, are
not included in case sales measurements as they are not the primary focus of
Dakota's selling efforts.

Dakota's primary source of revenue is franchise sales of Dakota's branded
products directly to retailers in bottle, can, premix or postmix
configuration. Another source of revenue is full-line vending sales, primarily
of candy, snack, beverages and food products sold through vending machines.
Full-line vending sales represent less than 5% of total net sales.

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30,
1998

Net sales for the three months ended June 30, 1999 increased by 1.9% to
$26.9 million compared to $26.4 million for the same period in 1998. The
increase was due primarily to a 4.9% increase in the average per case selling
price. Soft drink franchise case sales decreased by 4.5% due mainly to
consumer resistance to the retail price increase in 1999.

Cost of sales for the three months ended June 30, 1999 decreased to $15.3
million compared to $15.7 million for the same period in 1998. The decrease
was due primarily to a decrease in the per case prices paid by Dakota for soft
drink packages purchased from its cooperative supplier, Wis-Pak. Wis-Pak
experienced lower raw material packaging costs for plastic bottles. These
decreased costs were passed along to Dakota. As a result of the foregoing,
gross profit for the three months ended June 30, 1999 was $11.6 million
compared to $10.7 million for the same period in 1998.

Selling, general and administrative expenses for the three months ended June
30, 1999 increased to $6.7 million compared to $5.9 million for the same
period in 1998. Selling, general and administrative expenses are comprised of
selling, distribution and warehousing expenses, advertising and marketing
expenses, and general and administrative expenses. These expenses increased
12.6%, due mainly to wage rate increases and expenses related to the placement
of equipment dedicated to sales of single-serve packages.

During the three months ended June 30, 1999, Dakota expensed approximately
$1.3 million in professional fees and other related costs attributable to
combining the common equity interests of Dakota, Delta and PPR.

As a result of the above factors, income from operations for the three
months ended June 30, 1999 decreased to $3.4 million, or 12.7% of net sales,
compared to $4.6 million, or 17.6% of net sales, for the same period in 1998.

Interest expense, net of interest income, for the three months ended June
30, 1999 decreased slightly from the same period in 1998. The decrease was due
primarily to the scheduled principal payments on the senior secured notes.

As a result of the above factors, Dakota realized net income of $3.3 million
for the three months ended June 30, 1999 compared to net income of $4.4
million for the same period in 1998.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Net sales for the six months ended June 30, 1999 increased by 2.3% to $48.7
million compared to $47.6 million for the same period in 1998. The increase
was due primarily to a 4.7% increase in the average per case selling price.
Soft drink franchise case sales decreased by 3.2% due mainly to consumer
resistance to the retail price increase in 1999.

Cost of sales for the six months ended June 30, 1999 decreased to $27.8
million compared to $28.1 million for the same period in 1998. The decrease
was due primarily to a decrease in the per case prices paid by Dakota for soft
drink packages purchased from their cooperative supplier, Wis-Pak. Wis-Pak
experienced lower raw material packaging costs for plastic bottles. These
decreased costs were passed along to Dakota. As a result of the

86
<PAGE>

foregoing, gross profit for the six months ended June 30, 1999 was $20.9
million compared to $19.5 million for the same period in 1998.

Selling, general and administrative expenses for the six months ended June
30, 1999 increased to $13.0 million compared to $11.9 million for the same
period in 1998. These expenses increased 9.4%, due mainly to wage rate
increases and expenses related to the placement of equipment dedicated to
sales of single-serve packages.

During the six months ended June 30, 1999, Dakota expensed approximately
$1.3 million in professional fees and other related costs attributable to
combining the common equity interests of Dakota, Delta and PPR.

As a result of the above factors, income from operations for the six months
ended June 30, 1999 decreased to $6.3 million, or 13% of net sales, compared
to $7.3 million, or 15.4% of net sales, for the same period in 1998.

Interest expense, net of interest income, for the six months ended June 30,
1999 decreased slightly from the same period in 1998. The decrease was due
primarily to the scheduled principal payments on the senior secured notes.

As a result of the above factors, Dakota realized net income of $6.0 million
for the six months ended June 30, 1999 compared to net income of $6.9 million
for the same period in 1998.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Net sales for the year ended December 31, 1998 increased by 2.6% to $97.4
million compared to $94.9 million for the same period in 1997. The increase
was due primarily to a 6.1% increase in franchise case sales volume and a
decrease in the average per case selling price of 1.0%. The majority of the
increase in soft drink franchise case sales came in single-serve packages sold
in refrigerated vendors and coolers. There was also a moderate increase in
take-home soft drink volume. Pricing for soft drink packages overall in 1998
was relatively consistent with the prior year although the pricing effect of a
greater proportion of sales of single-serve packages was offset by decreases
in pricing of take-home packages and increases in off-invoice discounts given
to retail customers.

Cost of sales for the year ended December 31, 1998 increased to $57.0
million compared to $53.9 million for the same period in 1997. The increase
was due primarily to an increase in raw materials costs, primarily packaging
materials and sweetener, which resulted in higher franchise case sales costs
that were passed along to Dakota by their cooperative supplier for soft drink
packages. As a result of the foregoing, gross profit for the year ended
December 31, 1998 was $40.3 million compared to $41.0 million for the same
period in 1997.

Selling, general and administrative expenses for the year ended December 31,
1998 increased to $24.5 million compared to $24.0 million for the same period
in 1997. These expenses increased 2.2% in 1998, while case sales volume
increased 6.1%. Thus, Dakota was able to leverage fixed costs against higher
unit volumes in 1998, even though there was 3.5% increase in selling,
distribution and warehousing expenses due to expenses related to the placement
of equipment dedicated to single-serve packages of soft drinks.

As a result of the above factors, income from operations for the year ended
December 31, 1998 decreased to $15.4 million, or 15.8% of net sales, compared
to $16.5 million, or 17.4% of net sales, for the same period in 1997.

Interest expense, net of interest income, for the year ended December 31,
1998 decreased to $0.6 million from $0.7 million for the same period in 1997.
The decrease was due primarily to the scheduled principal payments on the
senior secured notes.

As a result of the above factors, Dakota realized net income of $14.9
million for the year ended December 31, 1998 compared to net income of $15.7
million for the same period in 1997.

87
<PAGE>

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Net sales for the year ended December 31, 1997 increased by 6.0% to $94.9
million compared to $89.5 million for the same period in 1996. The increase
was due primarily to a 4.5% increase in franchise case sales volume and an
increase in the average per case selling price of 1.7%. The majority of the
increase in soft drink franchise case sales came in single-serve packages sold
in refrigerated vendors and coolers. There was also a small increase in take-
home soft drink volume. Pricing for soft drink packages overall was relatively
consistent with the prior year. Pricing was affected by a greater proportion
of sales of single-serve packages, including a moderate single-serve price
increase, which was offset by decreases in pricing of take-home packages.

Cost of sales for the year ended December 31, 1997 increased to $53.9
million compared to $52.9 million for the same period in 1996. The increase
was due primarily to an increase in franchise case sales. The increase was due
primarily to an increase in raw materials costs, primarily packaging materials
and sweetener which resulted in higher franchise case sales costs which were
passed along to Dakota by their cooperative supplier for soft drink packages.
As a result of the foregoing, gross profit for the year ended December 31,
1997 was $41.0 million compared to $36.6 million for the same period in 1996.

Selling, general and administrative expenses for the year ended December 31,
1997 increased to $24.0 million compared to $20.8 million for the same period
in 1996. These expenses increased 15% in 1997, while case sales volume
increased 4.5%. Dakota's fixed costs increased at a faster rate than unit
volumes in 1997 mainly due to expenses related to the placement of equipment
dedicated to single-serve packages. Additionally, Dakota also experienced cost
of $0.3 million in 1997 related to flood damage incurred in its Fargo, North
Dakota facility.

As a result of the above factors, income from operations for the year ended
December 31, 1997 increased to $16.5 million, or 17.4% of net sales, compared
to $15.3 million, or 17.1% of net sales, for the same period in 1996.

Interest expense, net of interest income, for the year ended December 31,
1997 decreased to $0.7 million from $0.9 million for the same period in 1996.
The decrease was due primarily to the scheduled principal payments on the
senior secured notes.

As a result of the above factors, Dakota generated income before income
taxes of $15.7 million for the year ended December 31, 1997 compared to $14.5
million for the same period in 1996.

Net income in 1997 was $18.2 million compared to $8.9 million in 1996. As
mentioned above, Dakota changed its tax status in 1997 and as a result, no
income tax provision was recorded in 1997; however, 1997 was impacted by a
$2.5 million income tax benefit recorded as a result of Dakota's change in tax
status. The 1996 operations reflected an income tax provision of $5.6 million.

Liquidity and Capital Resources

General

Dakota's principal use of funds until 2003 will be the repayment of interest
and investment in capital assets and strategic acquisitions. It is expected
that Dakota's primary source of funds for its future activities will be its
operations. While Dakota does not currently anticipate utilizing the funds
available under its credit agreement for other than seasonal working capital
requirements, such funds may be used to augment operating cash flow. Pursuant
to Dakota's credit facility, it has a borrowing capacity of up to $ 25.0
million. As of June 30, 1999, $6.4 million had been drawn on the credit
agreement, $4.0 million at December 31, 1998 and $0 at December 31, 1997. The
credit facility will mature in 2008. Management expects Dakota's operating
activities will generate sufficient cash flows to repay the line of credit.

Dakota has senior secured notes payable with a balance of $27.5 million at
June 30, 1999, and $28.5 million at December 31, 1998, of which $7.5 million
is due in varying semiannual installments through February 1, 2003

88
<PAGE>

and $20.0 million is due semiannually from February 1, 2002 through August 1,
2008. These senior secured notes have interest rates of 7.39% and 6.97%,
respectively. The balance of senior notes at December 31, 1997 was
$10.5 million. Additionally, Dakota had a $5.0 million term loan outstanding
at June 30, 1999 and December 31, 1998, which matures on February 1, 2004. The
interest rate on the term loan is LIBOR plus 1.1%, which can be locked in for
short periods of time, typically 30 to 90 days. Management expects Dakota's
operating activities will generate sufficient cash flows to repay the senior
secured notes and term loan.

Capital expenditures will be required primarily for Dakota's vendor and
cooler placements, automobile and truck fleet, and routine plant, bottling,
and equipment additions or maintenance. During the six months ended June 30,
1999, capital expenditures totaled $4.2 million. During the years ended
December 31, 1998 and 1997, capital expenditures totaled $4.5 million and $5.4
million, respectively. Dakota anticipates that capital expenditures will be
$5.5 million in fiscal year 1999.

Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Dakota had a cash balance of $0.6 million and working capital of $5.3
million at June 30, 1999, compared to cash of $0.3 million and working capital
of $6.7 million at December 31, 1998. Working capital represents current
assets (excluding cash and cash equivalents) less current liabilities
(excluding advances under the Credit Agreement and current maturities of long-
term debt and other liabilities).

The $0.3 million increase in cash from December 31, 1998 to June 30, 1999
resulted from net cash provided by operations of $8.9 million less cash used
in investing activities of $4.7 million less cash used by financing activities
of $3.9 million. The cash provided by operations was net of a $0.5 million
increase in working capital. In the same period in 1998, cash decreased by
$4.5 million resulting from net cash provided by operations of $6.3 million
less cash used in investing activities of $3.5 million less cash used by
financing activities of $7.3 million.

Cash used in investing activities of $4.7 million in the six months ended
June 30, 1999 represented a $1.2 million increase over the cash used in the
same period in 1998. The increase in cash used was primarily related to
increased capital expenditures and the March 1, 1999 purchase of S & R
Vending, a full-line vending company in Wahpeton, North Dakota.

Financing activities in the six months ended June 30, 1999 used $3.9 million
in net cash, which represented a $3.4 million decrease over the $7.3 million
in net cash used in the same period in 1998. This decrease in net cash used
resulted primarily from Credit Agreement advances of approximately $6.5
million less Credit Agreement payments of approximately $4.0 million.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Dakota had cash of $0.3 million and working capital of $6.7 million at
December 31, 1998, compared to cash of $7.2 million and working capital of
$4.5 million at December 31, 1997. Working capital represents current assets
(excluding cash and cash equivalents) less current liabilities (excluding
advances under the credit agreement and current maturities of long-term debt
and other liabilities).

The $6.9 million decrease in cash from December 31, 1997 to December 31,
1998 resulted from net cash provided by operations of $15.8 million less cash
used in investing activities of $4.5 million less cash used in financing
activities of $18.3 million during the year. The cash provided by operations
in 1998 was $2.9 million less than provided in 1997 due principally to changes
in working capital. In 1998, working capital increased $2.4 million and in
1997 increased by $0.1 million primarily due to changes in prepaid expenses
and accounts payable and accrued liabilities.

Cash used in investing activities of $4.4 million in the year ended December
31, 1998 represented a $0.6 million decrease over the cash used in the same
period in 1997. The decrease in cash used was primarily related to decreased
capital expenditures.

89
<PAGE>

Financing activities in the year ended December 31, 1998 used $18.3 million
in net cash, which represented a $5.4 million increase over the $12.9 million
in net cash used in the same period in 1997. This increase in net cash used
resulted primarily from a notes receivable to the Pohlad Companies of $33.4
million netted against new senior notes of $20.0 million.

Year 2000 Readiness Disclosure

The risks from this date change are both internal and external and can
potentially affect Dakota's production, distribution and administrative
systems and Dakota's customers, suppliers of raw materials, utilities and
distribution services. Year 2000 related problems could prevent customers from
accepting deliveries from Dakota or processing payments for amounts due to
Dakota. Suppliers may be prevented from producing and supplying goods or
services essential to Dakota's business.

Dakota has completed the process of evaluating its IT systems for Year 2000
compliance. Dakota used the PepsiCo Year 2000 compliance plan as a framework
for the development and implementation of its Year 2000 compliance plan. In
addition to the evaluation of traditional IT assets, production equipment and
non-traditional IT equipment such as embedded chip assets have been evaluated.

Dakota uses both outside and internally developed applications for data
processing software. Dakota's most critical applications are Year 2000
compliant at this time. Dakota must perform a few modifications to make some
of its less critical internally developed applications Year 2000 compliant.
These modifications and any other modifications should be completed by
September 30, 1999.

Dakota does not expect the cost of becoming Year 2000 compliant to be
material to its consolidated financial condition or results of operations.
This is due, in part, to Dakota's recent significant upgrades to its data
communication network and key data processing hardware, all of which are Year
2000 compliant.

Dakota recognizes that Year 2000 issues constitute a material known
uncertainty. Dakota also recognizes the importance of ensuring that Year 2000
issues will not adversely affect its operations. Dakota believes that the
processes described above will be effective to manage the risks associated
with the problem. However, there can be no assurance that the processes can be
completed on the timetable described above or that the remediation will be
fully effective. The failure to identify and remediate Year 2000 issues, or
the failure of key vendors, suppliers or other critical third parties who do
business with Dakota to timely remediate their Year 2000 issues could cause an
interruption in the business operations of Dakota. At this time, however,
Dakota does not posses information necessary to estimate the overall potential
impact of Year 2000 compliance issues.

Dakota's most likely potential risk with regard to Year 2000 issues is the
temporary inability of suppliers to provide supplies of raw materials to
Dakota. The inability of Dakota's suppliers to be Year 2000 ready could result
in delays in product manufacturing and delivery, thereby adversely affecting
the business or operations of Dakota. Dakota believes, however, that in a
worst case scenario any disruption in supply materials can be minimized by
relying on inventories or shifting production to unaffected plants or
suppliers with some increased distribution costs.

Dakota has reviewed with its major suppliers their Year 2000 plans and
indications are that they are, or will be, compliant in time for January 1,
2000. As for the supply of electricity, Dakota is in the process now of
obtaining an alternate source for back-up purposes.

90
<PAGE>

Dakota recognizes the need for Year 2000 contingency plans in the event that
Dakota's plan is not fully successful or that the efforts of its vendors and
suppliers are not timely completed. Dakota plans to address contingency
planning during calendar 1999. Such plans will include building inventories of
raw materials and finished goods in advance of January 1, 2000 to protect
against supply and production disruptions. To the extent that Dakota's vendors
and suppliers are unable to provide sufficient evidence of Year 2000 readiness
by September 30, 1999, Dakota will seek to arrange for their replacement.
Additionally, Dakota is developing manual processes to replace electronic
applications in the event of their failure.

Inflation

There was no significant impact on Dakota's operations as a result of
inflation during the six months ended June 30, 1999 or the years ended
December 31, 1998, 1997 or 1996.

Quantitative and Qualitative Disclosures About Market Risk

Dakota uses financial instruments, including fixed and variable rate debt,
to finance operations, for capital expenditures and for general corporate
purposes. Dakota's exposure to market risk for changes in interest rates
relates primarily to short and long-term debt obligations and a note
receivable from Dakota's parent. Dakota does not use derivative financial
instruments or engage in trading activities. There were no significant changes
in Dakota's exposure to market risk for changes in interest rates during the
six months ended June 30, 1999.

The table below summarizes the principal cash flows of Dakota's financial
instruments outstanding at December 31, 1998, categorized by the type of
instrument and year of maturity.

<TABLE>
<CAPTION>
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
------ ------ ------ ------ ------ ---------- ------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents-
Deposit and money market
accounts............... $ 315 $ -- $ -- $ -- $ -- $ -- $ 315 $ 315
LIABILITIES
Long term debt-
Senior notes payable,
due February 2003
(interest at 7.39%).... -- -- -- 1,000 2,000 17,000 20,000 20,000
Senior notes payable,
due August 2008
(interest at 6.97%).... 2,000 2,000 2,000 1,700 750 -- 8,450 9,061
Term loan, due February
2004 (interest at LIBOR
plus 1.1%; 6.35% at
December 31, 1998
utilizing interest rate
lock option)........... 500 1,000 1,000 1,000 1,000 500 5,000 5,000
Line of credit (interest
at LIBOR plus 1.1%;
6.2% at December 31,
1998).................. -- -- -- -- -- 4,000 4,000 4,000
Other long-term
obligations............ -- -- -- -- -- 800 800 800
</TABLE>

91
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Interests in the Acquisitions

Certain members of PPR's management and PPR's Board of Directors have
interests in the acquisitions that are in addition to the interests of PPR
shareholders generally. In addition, Pohlad Companies currently holds 52.8%
voting power over PPR, 59.3% of Delta's voting common stock and 100% of
Dakota's stock. See "Approval of the Acquisitions -- Interests of Certain
Persons in the Acquisitions."

Change in Control

In connection with the July 1998 change in control of PPR, PPR issued
warrants to P-PR Transfer, LLP and Suarez dated July 17, 1998 for the purchase
of 1,360,000 shares of PPR Class B Common Stock and 340,000 shares of PPR
Class B Common Stock, respectively, exercisable at $6.875 per share at any
time during a period of seven years and six months after the date of the
warrants. The warrants may be transferred and give the holders one demand and
unlimited piggyback registration rights.

P-PR Transfer, LLP is governed by an agreement that provides that the PPR
common stock owned by P-PR Transfer, LLP will be voted so that one member of
PPR's Board of Directors will be a person designated by BFSI. Pohlad Companies
has the right to designate and vote all of the other PPR common stock owned by
P-PR Transfer, LLP for all of the other members of PPR's Board of Directors,
subject to the rules of the NYSE requiring the election of two independent
directors.

Shareholders' Agreement

PPR, P-PR Transfer, LLP and Suarez entered into a Shareholders' Agreement
dated as of August 5, 1998 (the "Shareholders' Agreement"). Under the
Shareholders' Agreement, Suarez has granted to Pohlad Companies the right to
vote 250,000 of the shares of PPR Class A Common Stock held by Suarez (or such
lesser number of shares as Suarez may own), so long as Pohlad Companies or an
affiliate owns directly or indirectly an equity interest in P-PR Transfer,
LLP. Pohlad Companies' right to vote such shares applies to all matters except
(a) the sale of all or substantially all of the assets or stock of PPR and (b)
a plan of transactions, exchange or consolidation of PPR with another entity
in which transaction PPR is not the surviving entity.

The Shareholders' Agreement includes an agreement by PPR to prepare and file
a registration statement under the Securities Act, covering the 1,242,085
shares of PPR Class B Common Stock purchased by Suarez on July 17, 1998, and
to use its best efforts to cause such registration statement to become
effective on or before January 31, 2000 and to remain effective until Suarez
no longer owns such shares of PPR Class B Common Stock or until Suarez is
eligible to sell all of its remaining shares of PPR Class B Common Stock in a
single transaction pursuant to Rule 144 under the Act. The registration rights
include standard expense and indemnification provisions.

Franchise Arrangements

PPR has entered into a master franchise commitment letter (the "Franchise
Commitment Letter") with PepsiCo with respect to the sale of PepsiCo soft
drink products in Puerto Rico. PPR has also entered into exclusive bottling
appointment agreements (each an "Exclusive Bottling Appointment" and
collectively, with the Franchise Commitment Letter, the "Franchise
Arrangements") for the relevant trademarks of Pepsi-Cola, Diet Pepsi-Cola,
Pepsi-Cola Free, Diet Pepsi-Cola Free, Lemon-Lime Slice, Diet Lemon-Lime
Slice, Mandarin Orange Slice, Diet Mandarin Orange Slice, Grape Slice, Teem,
Diet Teem, Wonder Kola and Mountain Dew. The Franchise Commitment Letter runs
concurrently with the Exclusive Bottling Appointments and will terminate in
the event of

92
<PAGE>

the termination or expiration of the Exclusive Bottling Appointments. All of
the Franchise Arrangements have the provisions described below and were
renegotiated with the change in ownership control effective July 17, 1998. PPR
anticipates that the Franchise Arrangements will be superceded by the
agreements described in the "The Franchise Agreements."

The Franchise Arrangements require PPR to purchase its entire requirements
of concentrates and syrups for all of the PepsiCo soft drink products from
certain affiliates of PepsiCo. Pursuant to the Franchise Commitment Agreement
between PPR and PepsiCo, PepsiCo charges PPR the actual price of a unit of
concentrate that is paid by bottlers for the same or similar concentrate in
the continental United States on an equivalent yield basis based upon the then
current domestic list price for each of the respective PepsiCo products.

The Exclusive Bottling Appointments have ten-year terms expiring on July 17,
2008. Thereafter, each agreement is automatically renewed for additional five-
year terms unless either party gives written notice of its intention not to
renew the agreement at least 12 months prior to the date of expiration of the
term. PepsiCo may terminate the Franchise Arrangements if PPR fails to comply
in any material respect with the terms and conditions of the Franchise
Arrangements, subject to a right to cure in certain instances. In addition,
PepsiCo may terminate the Franchise Arrangements if there is a change of
effective control of PPR without PepsiCo's prior written consent.

PPR Management Agreement

PPR entered into a management agreement with Pohlad Companies effective July
20, 1998 (the "PPR Management Agreement") under which the services of PPR's
Chief Executive Officer, Robert C. Pohlad, and Chief Financial Officer, John
F. Bierbaum, are provided to PPR. Robert C. Pohlad, PPR's Chairman and Chief
Executive Officer, is a director, President and Chief Executive Officer of
Pohlad Companies. Pohlad Companies currently holds a 33.1% economic interest
in PPR and 52.8% voting power over PPR. Robert C. Pohlad owns one-third of
Pohlad Companies. Pohlad Companies is a holding and management services
company which has interests in several entities, including Dakota, Delta and
PPR. Neither Robert C. Pohlad nor John F. Bierbaum receives any compensation
from PPR.

Subject to any limitations imposed by PPR's Certificate of Incorporation,
Bylaws, or PPR's Board of Directors, Pohlad Companies has the authority under
the PPR Management Agreement to: (i) manage and provide oversight and
supervision to PPR and its business and properties; (ii) supervise the day to
day operations of PPR and make recommendations with respect thereto; (iii)
investigate and make recommendations with respect to the selection and conduct
of relations with PPR's consultants and technical advisors; (iv) assist in the
preparation of all filings with the Securities Exchange Commission and the
information contained in such filings; (v) conduct all negotiations with the
franchisors under all franchise agreements held or to be held by PPR and any
of its subsidiaries relating to said franchise agreements; (vi) coordinate and
cause to be produced strategic and annual operating capital and other plans;
(vii) coordinate all negotiations with regard to potential acquisitions,
mergers, consolidations or the like between PPR and third parties; and (viii)
conduct all negotiations with regard to debt financing provided to, or to be
provided to, PPR by third parties.

The PPR Management Agreement provides that Pohlad Companies may devote as
much time to the management of PPR as Pohlad Companies deems necessary and
that Pohlad Companies may engage in any other businesses, including the
bottling and distribution of soft drinks.

For services performed pursuant to the PPR Management Agreement, PPR pays
Pohlad Companies an annual fee of $250,000, which will escalate each year with
increases in PPR's gross revenue. Management fees of approximately $63,000 and
$50,000 were incurred in the three-month period ended December 31, 1998 and in
fiscal year 1998, respectively, under the PPR Management Agreement.

The PPR Management Agreement may be terminated by either PPR or Pohlad
Companies at the end of ten years from the date of the PPR Management
Agreement. In addition, either party may terminate the PPR Management
Agreement when Pohlad Companies or its affiliates cease to hold PPR common
stock or when Pohlad

93
<PAGE>

Companies is no longer controlled by members of the Pohlad family. For
purposes of the PPR Management Agreement, an "affiliate" of Pohlad Companies
means any person or entity controlling or controlled by or under common
control with Pohlad Companies, and "control" means the power to direct the
management and policies of Pohlad Companies, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of the PPR Management Agreement, members of the Pohlad family means
Carl R. Pohlad and his spouse, children, grandchildren, sons-in-law,
daughters-in-law, any corporation or partnership controlled by or affiliated
with any of the foregoing and any employees of such corporations or
partnerships, and any trust or foundation in which any of the foregoing has a
substantial beneficial interest or serves as a trustee or in any similar
capacity and retains voting powers of securities held in the trust or
foundation. Robert C. Pohlad and his brothers, James O. Pohlad and William M.
Pohlad, are all sons of Carl R. Pohlad, and the owners of all the equity
interest of Pohlad Companies. Either party may terminate the PPR Management
Agreement after ten years.

The parties to the PPR Management Agreement expect that PPR will pay
directly the salaries and bonuses of certain of PPR's executive officers
following PPR's acquisition of Delta and Dakota. See "Approval of the
Acquisitions -- Interests of Certain Persons in the Acquisitions."

Accounting Services Agreement

PPR entered into an Accounting Services Agreement with Delta effective July
20, 1998 (the "Accounting Services Agreement") which provides for Delta to
perform accounting and management information systems services for PPR. PPR
must pay Delta an annual fee for such services in an amount equal to the
aggregate costs and expenses incurred by Delta and allocated by Delta based on
case volume of PPR. Accounting services fees of approximately $94,000 and
$76,000 were incurred in the three-month period ended December 31, 1998 and in
fiscal year 1998, respectively, under the Accounting Services Agreement.
Either party may terminate the Accounting Services Agreement after ten years.
Robert C. Pohlad, PPR's Chairman and Chief Executive Officer, is a director
and Chief Executive Officer of Delta. Pohlad Companies holds an equity
interest in Delta.

Delta Management Agreement

The services of Delta's Chief Executive Officer, Robert C. Pohlad, and Chief
Financial Officer, John F. Bierbaum, are provided to Delta pursuant to a
management agreement between Delta and Pohlad Companies (the "Delta Management
Agreement"). Pohlad Companies owns 59.3% of Delta's voting common stock.
Robert C. Pohlad owns one-third of Pohlad Companies. Pohlad Companies is a
holding and management services company which has interests in several
entities, including Dakota, PPR, and Delta. Neither Robert C. Pohlad nor John
F. Bierbaum receives any compensation from Delta, except that John F. Bierbaum
participates in Delta's Phantom Stock Plan.

Subject to any limitations imposed by Delta's Amended and Restated
Certificate of Incorporation, the Amended and Restated Bylaws, the
Shareholders' Agreement, or Delta's Board of Directors, Pohlad Companies has
the authority under the Delta Management Agreement to: (i) administer, manage
and direct Delta and its business and properties; (ii) monitor the day to day
operations of Delta and make recommendations with respect thereto; (iii)
investigate and make recommendations with respect to the selection and conduct
of relations with Delta's consultants and technical advisors; and (iv) conduct
all negotiations with franchisors. Subject to the limitations imposed by
Delta's Amended and Restated Certificate of Incorporation, the Amended and
Restated Bylaws or the Shareholders' Agreement, the Delta Management Agreement
and any other contractual limitations imposed on or obligating Delta, Pohlad
Companies also has the authority to, among other things: (i) cause Delta to
expend its funds to further its business; (ii) enter into amended franchise
agreements with existing franchisors; (iii) manage and operate the bottling
operations pursuant to the terms and provisions of the franchise agreements;
(iv) enter into, make and perform any and all contracts, leases and other
agreements in connection with the businesses and properties of Delta (v) sell,
hypothecate, exchange, trade or otherwise dispose of Delta's properties or its
interests therein; (vi) cause Delta to borrow money; (vii) refer to
arbitration, settle, prosecute or defend any legal matter, proceeding or claim
involving Delta; (viii) mortgage, pledge, grant security interests in or
otherwise encumber Delta's assets; and (ix) retain or employ and coordinate
the services of all employees necessary to further Delta's business.

94
<PAGE>

The Delta Management Agreement provides that Pohlad Companies may devote as
much time to the management of Delta as Pohlad Companies deems necessary and
that Pohlad Companies may engage in any other businesses, including the
bottling and distribution of soft drinks.

For services performed pursuant to the Delta Management Agreement, Delta
pays Pohlad Companies a management fee and a transaction fee. The management
fee is paid monthly in advance at an annual rate equivalent to the greater of
$500,000, or $400,000 multiplied by the ratio of the CPI as of the year
preceding the date of computation to the CPI as of 1987. The transaction fee
is payable upon the acquisition of additional franchises and is equivalent to
1.5% of Delta's acquisition cost of such franchises. During 1998 and 1997,
Delta paid Pohlad Companies $550,000 and $551,000, respectively, in management
fees pursuant to the Delta Management Agreement.

The Delta Management Agreement may be terminated by either Delta or Pohlad
Companies when Pohlad Companies or its affiliates cease to hold Delta common
stock or when Pohlad Companies is no longer controlled by members of the
Pohlad family. For purposes of the Delta Management Agreement, an "affiliate"
of Pohlad Companies means any person or entity controlling or controlled by or
under common control with Pohlad Companies, and "control" means the power to
direct the management and policies of Pohlad Companies, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise. For purposes of the Delta Management Agreement, members of the
Pohlad family means Carl R. Pohlad and his spouse, children, grandchildren,
sons-in-law, daughters-in-law, any corporation or partnership controlled by or
affiliated with any of the foregoing and any employees of such corporations or
partnerships, and any trust or foundation in which any of the foregoing has a
substantial beneficial interest or serves as a trustee or in any similar
capacity and retains voting powers of securities held in the trust or
foundation. Robert C. Pohlad and his brothers, James O. Pohlad and William M.
Pohlad, are all sons of Carl R. Pohlad, and the owners of all the equity
interest of Pohlad Companies.

The parties to the Delta Management Agreement expect that the agreement will
be amended following PPR's acquisition of Delta and Dakota. See "Approval of
the Acquisitions -- Interests of Certain Persons in the Acquisitions."

Dakota Management Agreement

The services of Dakota's Chief Executive Officer, Robert C. Pohlad, and
Chief Financial Officer, John F. Bierbaum, are provided to Dakota pursuant to
a management agreement between Dakota and Pohlad Companies (the "Dakota
Management Agreement"). Pohlad Companies owns 100% of Dakota's voting common
stock. Robert C. Pohlad owns one-third of Pohlad Companies. Pohlad Companies
is a holding and management services company which has interests in several
entities, including Delta, PPR, and Dakota. Neither Robert C. Pohlad nor John
F. Bierbaum receives any compensation from Dakota.

Subject to any limitations imposed by Dakota's Articles of Incorporation,
Bylaws, or Dakota's Board of Directors, Pohlad Companies has the authority
under the Dakota Management Agreement to: (i) administer, manage and direct
Dakota and its business and properties; (ii) monitor the day to day operations
of Dakota and make recommendations with respect thereto; (iii) investigate and
make recommendations with respect to the selection and conduct of relations
with Dakota's consultants and technical advisors; and (iv) conduct all
negotiations with franchisors. Subject to the limitations imposed by Dakota's
Articles of Incorporation, Bylaws, the Dakota Management Agreement and any
other contractual limitations imposed on or obligating Dakota, Pohlad
Companies also has the authority to, among other things: (i) cause Dakota to
expend its funds to further its business; (ii) enter into amended franchise
agreements with existing franchisors; (iii) manage and operate the bottling
operations pursuant to the terms and provisions of the franchise agreements;
(iv) enter into, make and perform any and all contracts, leases and other
agreements in connection with the businesses and properties of Dakota (v)
sell, hypothecate, exchange, trade or otherwise dispose of Dakota's properties
or its interests therein; (vi) cause Dakota to borrow money; (vii) refer to
arbitration, settle, prosecute or defend any legal matter, proceeding or claim
involving Dakota; (viii) mortgage, pledge, grant security interests in or
otherwise encumber Dakota's assets; and (ix) retain or employ and coordinate
the services of all employees necessary to further Dakota's business.

95
<PAGE>

The Dakota Management Agreement provides that Pohlad Companies may devote as
much time to the management of Dakota as Pohlad Companies deems necessary and
that Pohlad Companies may engage in any other businesses, including the
bottling and distribution of soft drinks.

For services performed pursuant to the Dakota Management Agreement, Dakota
paid Pohlad Companies a management fee of $2,576,808 in calendar year 1998.
Management fees for calendar year 1999 and each succeeding calendar year will
increase by ten percent per year.

The Dakota Management Agreement may be terminated by either Dakota or Pohlad
Companies when Pohlad Companies or its affiliates cease to hold Dakota common
stock or when Pohlad Companies is no longer controlled by members of the
Pohlad family. For purposes of the Dakota Management Agreement, an "affiliate"
of Pohlad Companies means any person or entity controlling or controlled by or
under common control with Pohlad Companies, and "control" means the power to
direct the management and policies of Pohlad Companies, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise. For purposes of the Dakota Management Agreement, members of the
Pohlad family means Carl R. Pohlad and his spouse, children, grandchildren,
sons-in-law, daughters-in-law, any corporation or partnership controlled by or
affiliated with any of the foregoing and any employees of such corporations or
partnerships, and any trust or foundation in which any of the foregoing has a
substantial beneficial interest or serves as a trustee or in any similar
capacity and retains voting powers of securities held in the trust or
foundation. Robert C. Pohlad and his brothers, James O. Pohlad and William M.
Pohlad, are all sons of Carl R. Pohlad, and the owners of all the equity
interest of Pohlad Companies.

The parties to the Dakota Management Agreement expect that the agreement
will be terminated following PPR's acquisition of Delta and Dakota. See
"Approval of the Acquisitions--Interest of Certain Persons in the
Acquisitions."

Other Business Relationships

Philip A. Marineau, one of Delta's directors, is President and Chief
Executive Officer of Pepsi-Cola North America, the domestic soft drink
division of PepsiCo. PepsiCo is Delta's primary franchiser.

Michael D. White, one of PPR's directors, is Senior Vice President and Chief
Financial Officer of PepsiCo.

Controlling Shareholder

As noted above, Pohlad Companies has voting control over PPR, Delta and
Dakota.

APPROVAL OF AMENDMENT TO PPR'S CERTIFICATE OF INCORPORATIONTO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK

Currently, PPR is authorized to issue a total of 40,000,000 shares of
capital stock, including 5,000,000 shares of Class A Common Stock and
35,000,000 shares of Class B Common Stock.

As of August 31, 1999, 16,690,000 shares of PPR Class B Common Stock were
issued and outstanding and 3,779,167 shares of PPR Class B Common Stock were
reserved for issuance upon exercise of options and warrants. As discussed in
this document, PPR will be required to issue 65,070,006 shares of PPR Class B
Common Stock in connection with the acquisitions of Delta and Dakota.
Consequently, unless PPR's authorized capital stock is increased, PPR will
have insufficient shares to complete the acquisitions. PPR's Board of
Directors has determined that it is advisable to increase the number of
authorized shares of PPR capital stock to 150,000,000 from 40,000,000 and to
increase the number of shares of authorized PPR Class B Common Stock to
145,000,000 from 35,000,000.

By action taken effective June 18, 1999, the Board approved the following
resolution, subject to approval by the shareholders at the Special Meeting.

RESOLVED, that the first sentence of Article FOURTH of the Certificate of
Incorporation of Pepsi-Cola Puerto Rico Bottling Company shall be amended
in its entirety to read as follows:

96
<PAGE>

FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is One Hundred Fifty Million
(150,000,000) shares, consisting of Five Million (5,000,000) shares of
Class A Common Stock, par value $.01 per share (herein called the "Class A
Common Stock") and One Hundred Forty-Five Million (145,000,000) shares of
Class B Common Stock, par value $.01 per share (herein called the "Class B
Common Stock").

PPR's Board of Directors also believes that PPR would be unable to engage in
future equity financing or acquisitions without additional shares of PPR Class
B Common Stock. PPR's Board of Directors believes that the availability of
additional shares of PPR Class B Common Stock for issuance in the future would
give PPR enhanced flexibility and permit such shares to be issued without the
expense and delay of holding a meeting of its shareholders. The shares would
be available for issuance by PPR's Board of Directors without further
shareholder authorization, except as may be required by the NYSE or any other
quotation system or stock exchange on which PPR Class B Common Stock may be
listed. The shareholders of PPR do not have preemptive rights to purchase or
subscribe for any part of any new or additional issuance of PPR's securities.

Other than the shares of Class B Common Stock to be issued in connection
with the acquisitions of Delta and Dakota and the grant of stock options to
employees and directors from time to time, there are at present no plans,
understandings, arrangements or agreements with respect to any transactions
that would require PPR to issue any new shares of PPR Class B Common Stock.

Although not intended as anti-takeover device, issuing additional shares of
PPR Class B Common Stock could impede a non-negotiated acquisition of PPR by
diluting the ownership interests of a substantial shareholder, increasing the
total amount of consideration necessary for a person to obtain control of PPR
or increasing the voting power of friendly third parties.

Approval of the amendment to the Certificate of Incorporation to increase
the number of authorized shares of PPR capital stock and PPR Class B Common
Stock requires (a) the affirmative vote of the holders of a majority of the
shares of PPR common stock present in person or represented by proxy voting
together and (b) the affirmative vote of the holders of a majority of the
shares of PPR Class B Common stock present in person or represented by proxy.
PPR's Board of Directors considers this amendment to be advisable and in the
best interests of PPR and its shareholders and recommends that shareholders
vote FOR approval of this amendment.

APPROVAL OF AMENDMENT TO PPR'S CERTIFICATE OF INCORPORATION TO
CHANGE PPR'S NAME TO PEPSIAMERICAS, INC.

Following the acquisitions, PPR will operate within a broader geographic
scope. PPR believes that changing its name to PepsiAmericas, Inc. will more
accurately reflect its increased scope of operations. PPR's Board of Directors
has adopted, subject to shareholder approval, a resolution to amend PPR's
Certificate of Incorporation to change its corporate name to PepsiAmericas,
Inc. PPR's Board of Directors recommends that the shareholders approve this
name change and adopt the following resolution at the Special Meeting.

RESOLVED, that Article FIRST of the Certificate of Incorporation of Pepsi-
Cola Puerto Rico Bottling Company shall be amended in its entirety to read as
follows:

FIRST: The name of the corporation (hereinafter called the "Corporation") is
PepsiAmericas, Inc.

Approval of the amendment to the Certificate of Incorporation to change
PPR's name requires the affirmative vote of the holders of a majority of the
shares of PPR common stock present in person or represented by proxy voting
together and not by class. PPR's Board of Directors considers this amendment
to be advisable and in the best interests of PPR and its shareholders and
recommends that shareholders vote FOR approval of this amendment.

97
<PAGE>

ADOPTION OF 1999 STOCK OPTION PLAN

General

To provide PPR with the flexibility to issue stock options following the
acquisitions of Delta and Dakota, PPR's Board of Directors has adopted,
subject to shareholder approval, PPR's 1999 Stock Option Plan (the "Plan").
PPR's Board of Directors has reserved 4,000,000 shares of PPR Class B Common
Stock for issuance under the Plan. A general description of the Plan is set
forth below, but such description is qualified in its entirety by reference to
the full text of the Plan, a copy of which appears at Appendix D to this
document.

Description of the Plan

Purpose. The purpose of the Plan is to promote the long-term financial
interest of PPR and its subsidiaries by (a) attracting and retaining employees
and others providing services to PPR, (b) motivating such individuals, by
means of appropriate incentives, to achieve long-range goals, (c) providing
incentive compensation opportunities that are competitive with those of other
similar companies, and (d) conforming employees' interests with those of PPR's
shareholders through compensation based on PPR Class B Common Stock.

Term. The Plan is unlimited in duration; however, no incentive stock options
("ISOs") may be granted under the Plan after September 3, 2009. Further, the
Plan may be terminated at any time, provided that such termination will not
adversely affect options then outstanding.

Administration. The Plan is administered by the Compensation Committee of
PPR's Board of Directors (the "Committee"). The Committee has authority and
discretion (a) to select from among eligible individuals those persons who
will receive awards, (b) to determine the time or times of receipt, (c) to
determine the types of awards and the number of shares covered by the awards,
(d) to establish the terms, conditions, performance criteria, restrictions and
other provisions of such awards, (e) to cancel or suspend awards, (f) to
interpret the Plan and (g) to delegate any of its powers to any member of the
Committee or to any other person. The Committee may establish, amend and
rescind any rules and regulations relating to the Plan and make all other
determinations that may be necessary or advisable for the administration of
the Plan. The Committee may also grant awards as alternatives to or
replacements of awards outstanding under the Plan or any other plan or
arrangement.

Eligibility. All employees of PPR and its subsidiaries are eligible to
receive stock options (ISO or non-qualified) under the Plan. As of August 31,
1999, PPR and its subsidiaries had approximately 550 employees who were
eligible to receive awards under the Plan. Outside consultants or advisors to
PPR and its subsidiaries, as well as non-employee directors, are also eligible
to receive non-qualified options under the Plan.

Options. When an option is granted under the Plan, the Committee, in its
discretion, specifies the exercise price, the type of option (ISO or non-
qualified) to be granted, and the number of shares which may be purchased upon
exercise of the option. The exercise price of an ISO may not be less than 100%
of the fair market value of one share of PPR Class B Common Stock on the date
of grant. Any ISO granted to a holder of more than 10% of the outstanding PPR
Class B Common Stock must be at an exercise price of at least 110% of fair
market value. On August 31, 1999, the closing price of PPR Class B Common
Stock as reported by the NYSE was $5.6875 per share. No individual may receive
an option grant to purchase more than 250,000 shares in any year, except that
this limit shall not apply to an employee in the fiscal year in which his or
her service as an employee first commences.

The term during which an option may be exercised and whether an option will
be exercisable immediately, in stages or otherwise are set by the Committee,
but the term of any ISO may not exceed ten years from the date of grant.
Optionees may pay for shares upon exercise of options with cash, cashier's
check, PPR Class B Common Stock valued at the stock's then fair market value,
or a combination of these methods. Each option granted under the Plan is
nontransferable during the life of the optionee.

The Committee will determine the form of stock option agreements which will
be used for stock options granted under the Plan. Such agreements will govern
the right of an optionee to exercise an option upon termination of employment
during the life of an optionee and following an optionee's death. The
Committee may

98
<PAGE>

impose additional or alternative conditions and restrictions on ISOs or non-
qualified stock options granted under the Plan; however, each ISO must contain
such limitations and restrictions upon its exercise as are necessary to ensure
that the option will be an ISO as defined under the Internal Revenue Code.

Change in Control. Upon a change in control (as defined in the Plan), an
award will become fully exercisable as to all shares subject to such award if
such award is not assumed by the surviving corporation or its parent and the
surviving corporation or its parent does not substitute such award with
another award of substantially the same terms.

Amendment. The Committee may amend or terminate the Plan at any time.
However, the Committee may not, without shareholder approval, increase the
number of shares of PPR Class B Common Stock reserved for issuance under the
Plan.

Antidilution Provisions. In the event of a corporate transaction involving
PPR, including without limitation any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares, the
Committee may adjust awards to preserve the benefits or potential benefits of
the awards. Actions by the Committee may include (a) adjustment of the number
and kind of shares which may be delivered under the Plan, (b) adjustment of
the number and kind of shares subject to outstanding awards, (c) adjustment of
the exercise price of outstanding options, and (d) any other adjustments that
the Committee determines to be equitable.

Automatic Option Grants to Outside Directors. At the conclusion of each
regular annual meeting of PPR shareholders after this Plan is effective, each
non-employee director (excepting Robert Pohlad and Michael White) shall
receive a non-qualified option for 1,000 shares of PPR Class B Common Stock at
the fair market value of the stock on the date the option is issued. Such
option is immediately fully vested. It must be exercised within three months
of termination of PPR service or, in the case of death or disability, within
one year of the termination of such service. In no event may it be exercised
later than ten years from the grant date.

Tax Information

An optionee will not incur any federal income tax liability as a result of
the grant of a stock option. The same is true when any option becomes
exercisable.

If an option not be qualified for tax purposes as an ISO, upon exercise, the
optionee will generally recognize ordinary income for federal income tax
purposes in an amount equal to the difference between the fair market value of
the shares at the time of exercise and the exercise price. The income
recognized by the optionee will be subject to tax withholding by PPR, and PPR
will be entitled to a tax deduction in an amount equal to the amount of
ordinary income recognized by the optionee. Upon resale of such shares by the
optionee, any difference between the sale price and the fair market value of
the shares at the time the option was exercised will be treated as capital
gain or loss.

Generally, an optionee will not incur federal income tax liability as the
result of an exercise of an ISO. However, except in the case of death or
disability, if an ISO is exercised more than three months after an optionee's
termination of employment (a "disqualifying exercise"), the optionee will
recognize ordinary income in an amount equal to the difference between the
fair market value of the shares on the date of exercise and the exercise
price. For purposes of calculating an optionee's alternative minimum tax, if
any, the difference between the fair market value of the shares at the time
the stock option is exercised and the exercise price becomes an item of
adjustment. When the shares acquired upon exercise of an ISO are sold, the
optionee will be taxed on the difference between the sale price and the
exercise price. If such a sale does not occur within two years of the date the
ISO was granted or within one year of the date it was exercised, then the
gain, if any, will be treated as long-term capital gain. If such a sale occurs
within either of the time periods specified in the preceding sentence, a
disqualifying disposition, then the portion of the optionee's gain equal to
the difference between the fair market value of the stock on the date of
exercise (or, if less, the selling price) and the exercise price will be
treated as

99
<PAGE>

ordinary compensation income, while the balance of any gain would be treated
as capital gain. PPR is generally not entitled to a deduction as the result of
the grant or exercise of an ISO. However, if the optionee recognizes ordinary
income as the result of a disqualifying exercise or disposition, PPR is
entitled to a deduction in an equivalent amount in the taxable year of PPR in
which the disqualifying event occurs.

The foregoing is only a summary of the general effect of U.S. federal income
taxation upon the optionee and PPR with respect to the grant and exercise of
options under the Plan and the subsequent sale of such shares. This summary
does not discuss the income tax laws of any state or foreign country in which
an optionee may be employed or reside.

New Plan Benefits

The following table indicates the options to be issued under the Plan in
connection with the acquisitions of Delta and Dakota to the persons and groups
listed in the table as of September 3, 1999. Options are being issued to the
executive group, the non-executive officer employee group and one non-
executive director in consideration of the cancellation of rights previously
granted under phantom stock plans of Delta and Dakota.

<TABLE>
<CAPTION>
Dollar Number of Shares
Name and Position Value Underlying Options
- ----------------- ------ ------------------
<S> <C> <C>
Robert C. Pohlad, Chairman and Chief Executive
Officer............................................ $ 0 0
A. David Velez, Vice President...................... 0 0
Rafael Nin, former President and Chief Executive
Officer............................................ 0 0
Executive Group..................................... (1) 387,357
Non-Executive Director Group........................ (1) 20,856(2)
Non-Executive Officer Employee Group................ (1) 104,585
</TABLE>
- --------
(1) Indeterminable.
(2) Includes shares underlying options which would have been automatically
granted to PPR's outside directors during the last fiscal year if the Plan
had been in effect. Directors who serve on PPR's Board of Directors as
representatives of PepsiCo or Pohlad Companies are ineligible to receive
such awards under the Plan.

Vote Required

Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of PPR common stock present in person or represented by
proxy voting together and not by class. PPR's Board of Directors considers the
Plan to be advisable and in the best interests of PPR and its shareholders and
recommends that shareholders vote FOR approval of the Plan.

100
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth each component of compensation paid or
awarded to, or earned by both of the persons who served as PPR's Chief
Executive Officer during the fiscal year ended December 31, 1998 and each of
the executive officers whose total annual salary and bonus exceeded $100,000
in the fiscal year ended December 31, 1998 (collectively referred to as the
"Named Executive Officers"). Effective January 1, 1999, PPR changed its fiscal
year to a calendar year. The information in the following table is presented
for the fiscal year ended December 31, 1998 and the fiscal years ended
September 30, 1998, 1997 and 1996. Following PPR's acquisition of Delta and
Dakota, Pohlad Companies expects that PPR will pay directly the salaries and
bonuses of certain of PPR's executive officers. See "Approval of the
Acquisitions -- Interests of Certain Persons in the Acquisitions."

Summary Compensation Table

<TABLE>
<CAPTION>
Annual
Compensation
----------------
Year Other Annual
Name and Principal Position Ended Salary Bonus Compensation
- --------------------------- -------- -------- ------- ------------
<S> <C> <C> <C> <C>
Robert C. Pohlad (1).................... 12/31/98 $ 0 $ 0 $ 0
Chairman and Chief Executive Officer 09/30/98 0 0 0

A. David Velez (2)...................... 12/31/98 $141,835 $20,000 $114,857(3)
Vice President 09/30/98 137,596 0 55,993(4)
09/30/97 76,558 0 56,000(5)

Rafael Nin (6).......................... 12/31/98 $108,858 $ 0 $ 92,117(7)
09/30/98 163,975 0 171,473(8)
09/30/97 291,500 0 100,000(9)
09/30/96 92,304 0 0
</TABLE>
- --------
(1) Mr. Pohlad became Chairman and Chief Executive Officer of PPR in July
1998. Mr. Pohlad receives no compensation from PPR but is compensated
through Pohlad Companies. PPR receives executive management services from
Pohlad Companies pursuant to a Management Agreement. See "Certain
Relationships and Related Transactions."
(2) Mr. Velez became Vice President in March 1997.
(3) Of this amount, $2,857 represents travel and entertainment expenses,
$12,000 represents a car allowance, $10,000 represents a moving allowance,
and $90,000 represents dividends on management stock paid by Beverage
Plastics Company ("BEV"), a wholly owned subsidiary of PPR.
(4) Of this amount, $3,493 represents travel and entertainment expenses,
$12,000 represents a car allowance, $18,000 represents a moving allowance
and $22,500 represents dividends on management stock paid by BEV.
(5) Of this amount, $6,000 represents a car allowance and $50,000 represents
dividends on management stock paid by BEV.
(6) Mr. Nin served as President and Chief Executive Officer of PPR from June
1996 until his resignation in July 1998.
(7) Of this amount, $87,600 represents dividends paid on management stock by
BEV and $4,517 represents other expenses.
(8) Of this amount, $71,473 represents travel and entertainment expenses and
$100,000 represents dividends on management stock paid by BEV.
(9) Represents compensation received in the form of dividends on management
stock paid by BEV.

101
<PAGE>

Option Grants for the Fiscal Year Ended December 31, 1998

<TABLE>
<CAPTION>
Percentage Annual Rates of
Number of of Total Stock Price
Securities Options Exercise Appreciation for
Underlying Granted to or Base Option Term (1)
Options Employees in Price Per Expiration -----------------
Name Granted Fiscal Year Share Date 5% 10%
- ---- ---------- ------------ --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
A. David Velez.. 40,000 36.3% $6.25 03/03/08 $157,224 $398,436
</TABLE>
- --------
(1) These amounts are based on the assumed rates of appreciation as suggested
by the rules of the SEC and do not represent a prediction by PPR of future
stock prices. Actual gains, if any, on stock option exercises are
dependent upon the future performance of PPR common stock.

Aggregated Option Exercises in Fiscal Year Ended December 31, 1998 and Fiscal
Year-End Option Values

<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-The-Money
Acquired Value Options At Options At
Name On Exercise Realized Fiscal Year-End Fiscal Year-End
- ---- ----------- -------- --------------- ---------------
<S> <C> <C> <C> <C>
A. David Velez............. None None 40,000 None
Rafael Nin................. None None 1,516,667(1) $284,375(2)
</TABLE>
- --------
(1) On October 15, 1996, PPR granted Rafael Nin an option to purchase
1,516,667 shares of PPR Class B Common Stock at an exercise price of $5.00
per share. This option may be exercised in whole or in part and is
unlimited in duration until exercised in full.
(2) This value represents the difference between the market value of the
1,516,667 shares of PPR Class B Common Stock and the exercise price of the
option on December 31, 1998. On December 31, 1998, the market value of
1,516,667 shares of PPR Class B Common Stock was $7,867,710, which is the
product of 1,516,667 shares of PPR Class B Common Stock and $5.1875, the
last reported sale price of such shares on the NYSE on December 31, 1998.
The exercise price of the option is $7,583,335, which is the product of
1,516,667 shares of PPR Class B Common Stock and the exercise price of
$5.00 per share.

Employment Agreement

On June 11, 1996, PPR entered into an employment agreement with Rafael Nin
providing for an annual base salary of $300,000, subject to yearly review, as
well as a year-end bonus of 50% of the annual salary, predicated on the
satisfactory completion of established and agreed-upon objectives. PPR also
agreed to give Mr. Nin a management stock dividend from BEV of $100,000
annually, payable in four quarterly installments of $25,000. Under the
employment agreement, Mr. Nin was also entitled to receive other benefits
including an automobile with all operating expenses paid, and health and life
insurance. During the fiscal year ended December 31, 1998, Mr. Nin did not
receive any bonus, and his compensation reflected a voluntary salary reduction
as of April 1, 1997. Mr. Nin's employment was terminated on in July 1998 in
connection with the change in control of PPR.

Stock Option Plans

PPR has established two stock option plans for the granting of stock options
to purchase shares of PPR Class B Common Stock to certain employees and
directors of PPR and its affiliates ("Key Employees") who have served in such
capacities for at least one year prior to the date Options are granted. One
stock option plan (the "1996 Qualified Stock Option Plan") permits the grant
of ISOs under Section 422 of the Internal Revenue Code. The other stock option
plan does not permit the grant of ISOs (the "1996 Non-Qualified Stock Option
Plan"). The purposes of the stock option plans are to attract and retain
individuals of experience and ability, as well as to motivate such persons to
exert their best efforts on behalf of PPR.

102
<PAGE>

Key Employees of PPR and its subsidiaries and affiliates are eligible to
participate under the stock option plans, as deemed appropriate by PPR's Board
of Directors. However, the stock option plans do not permit the granting of
Options to employees or directors prior to their being employed by or serving
as director, for one year. The stock option plans are administered by PPR's
Board of Directors. PPR's Board of Directors has appointed the Committee to
assist in the management and administration of the stock option plans. The
Committee may recommend to PPR's Board of Directors any action to be taken
under the stock option plans but does not have any decision-making authority.

The total number of shares of PPR Class B Common Stock reserved and
available for issuance under each of the stock option plans in connection with
grants of Options is 500,000, subject to adjustment in the case of any change
in the outstanding shares of PPR Class B Common Stock by reason of any stock
split, stock dividend, recapitalization or exchange of such shares. No Option
is transferable except by will or the laws of descent and distribution, and
each Option is exercisable during the Option holder's lifetime only by the
Option holder.

The Options granted pursuant to PPR's 1996 Qualified Stock Option Plan will
have exercise prices equal to the fair market value of the shares of PPR Class
B Common Stock at the date of grant. The "fair market value" of the shares of
PPR Class B Common Stock is the mean of the sales price for such shares on the
NYSE at the close of business on the date of grant of the relevant Option.
Pursuant to the 1996 Non-Qualified Stock Option Plan, under certain
circumstances PPR may grant options at an exercise price below fair market
value. An Option holder is able to exercise Options from time to time as
specified in the grantee's individual Option agreement. Options must be
exercised during the grantee's employment with PPR, except that (i) upon an
Option holder's death, total disability or retirement, all vested Options
immediately become exercisable and may be exercised until the expiration of
such Options and (ii) upon voluntary resignation or termination of an Option
holder's employment without cause, vested Options are exercisable for a period
of 30 days following the date of resignation or termination. Upon the
occurrence of an event specified in (i) and (ii) above, all unvested Options
held by an Option holder will automatically expire and terminate. Subject to
the foregoing, PPR's Board of Directors will have the sole discretion to
determine the timing, amount, vesting and exercise periods of any Options
granted pursuant to the stock option plan and the manner in which such options
are exercised.

SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING

If a shareholder of PPR wishes to present a proposal for consideration for
inclusion in the proxy materials for the 2000 Annual Meeting of Shareholders,
the proposal must be sent by certified mail, return receipt requested, and
must be received at the executive offices of PPR, Carretera 865, Km. 0.4,
Barrio Candelaria Arenas, Toa Baja, Puerto Rico 00949, Attn: Secretary, no
later than September 21, 1999. All proposals must conform to the rules and
regulations of the SEC. Under SEC rules, if a shareholder notifies PPR after
December 5, 1999 of his or her intent to present a proposal for consideration
at the 2000 Annual Meeting of Shareholders, PPR, acting through the persons
named as proxies in the proxy materials for such meeting, may exercise
discretionary authority with respect to such proposal without including
information regarding such proposal in its proxy materials.

INDEPENDENT PUBLIC ACCOUNTANTS

PPR's Board of Directors has appointed Arthur Andersen LLP as independent
public accountants for PPR for the fiscal year ending December 31, 1999.
Representatives of Arthur Andersen LLP are expected to be present at the
Special Meeting, will have an opportunity to make a statement if they desire
to do so, and will be available to respond to appropriate questions from
shareholders in attendance.

EXPERTS

The financial statements and schedule of Pepsi-Cola Puerto Rico Bottling
Company as of December 31, 1998 and for the three-month period then ended, and
as of September 30, 1998 and for the fiscal year then ended,

103
<PAGE>

included in this proxy statement, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.

The financial statements and schedule of Pepsi-Cola Puerto Rico Bottling
Company as of September 30, 1997 and for each of the years ended September 30,
1997 and 1996, included in this proxy statement, have been audited by KPMG
LLP, independent auditors, as indicated in their reports with respect thereto,
and are included herein in reliance upon the authority of said firm as experts
in accounting and auditing in giving said reports.

The financial statements of Delta as of December 31, 1998 and 1997, and for
each of the three years in the period ended December 31, 1998 have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto, and are included herein in reliance
upon the authority of said firm as experts in accounting and auditing in
giving said reports.

The financial statements of Dakota as of December 31, 1998 and 1997, and for
each of the three years in the period ended December 31, 1998 have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto, and are included herein in reliance
upon the authority of said firm as experts in accounting and auditing in
giving said reports.

104
<PAGE>

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index

<TABLE>
<CAPTION>
Page
----
<S> <C>
Pepsi-Cola Puerto Rico Bottling Company and Subsidiaries
Report of Independent Public Accountants, dated March 11, 1999.......... F-2
Independent Auditors' Report, dated December 5, 1997.................... F-3
Consolidated Balance Sheets as of December 31, 1998 and September 30,
1998 and 1997.......................................................... F-4
Consolidated Statements of Income (Loss) for the Three Months Ended
December 31, 1998 and the Years Ended September 30, 1998, 1997 and
1996................................................................... F-5
Consolidated Statements of Shareholders' Equity for the Three Months
Ended December 31, 1998 and the Years Ended September 30, 1998, 1997
and 1996............................................................... F-6
Consolidated Statements of Cash Flows for the Three Months Ended
December 31, 1998 and the Years Ended September 30, 1998, 1997 and
1996................................................................... F-7
Notes to Consolidated Financial Statements as of December 31, 1998 and
September 30, 1998, 1997 and 1996...................................... F-8
Report of Independent Public Accountants on Financial Statement
Schedule............................................................... F-24
Independent Auditors' Report on Financial Statement Schedule............ F-25
Schedule II--Valuation and Qualifying Accounts.......................... F-26
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998
(Unaudited)............................................................ F-27
Consolidated Statements of Income (Loss) for the Three Months and Six
Months Ended June 30, 1999 and 1998 (Unaudited)........................ F-28
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
1999 and 1998 (Unaudited).............................................. F-29
Notes to Consolidated Financial Statements as of June 30, 1999
(Unaudited)............................................................ F-30
Delta Beverage Group, Inc. and Subsidiary
Report of Independent Public Accountants................................ F-33
Consolidated Balance Sheets as of December 31, 1998 and 1997............ F-34
Consolidated Statements of Operations for the Years Ended December 31,
1998, 1997 and 1996.................................................... F-35
Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1998,
1997 and 1996.......................................................... F-36
Consolidated Statements of Cash Flows for the Years Ended December 31,
1998, 1997 and 1996.................................................... F-37
Notes to Consolidated Financial Statements as of December 31, 1998, 1997
and 1996............................................................... F-38
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998
(Unaudited)............................................................ F-46
Consolidated Statements of Operations for the Three Months and Six
Months Ended June 30, 1999 and 1998 (Unaudited)........................ F-47
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
1999 and 1998 (Unaudited).............................................. F-48
Notes to Consolidated Financial Statements as of June 30, 1999
(Unaudited)............................................................ F-49
Dakota Beverage Company, Inc. and Subsidiaries
Report of Independent Public Accountants................................ F-50
Consolidated Balance Sheets as of December 31, 1998 and 1997............ F-51
Consolidated Statements of Operations for the Years Ended December 31,
1998, 1997 and 1996.................................................... F-52
Consolidated Statements of Shareholder's Equity (Deficit) for the Years
Ended December 31, 1998,
1997 and 1996.......................................................... F-53
Consolidated Statements of Cash Flows for the Years Ended December 31,
1998, 1997 and 1996.................................................... F-54
Notes to Consolidated Financial Statements as of December 31, 1998, 1997
and 1996............................................................... F-55
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998
(Unaudited)............................................................ F-61
Consolidated Statements of Operations for the Three Months and Six
Months Ended June 30, 1999 and 1998 (Unaudited)........................ F-62
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
1999 and 1998 (Unaudited).............................................. F-63
Notes to Consolidated Financial Statements as of June 30, 1999
(Unaudited)............................................................ F-64
</TABLE>

F-1
<PAGE>

Report Of Independent Public Accountants

To Pepsi-Cola Puerto Rico Bottling Company:

We have audited the accompanying consolidated balance sheets of Pepsi-Cola
Puerto Rico Bottling Company and subsidiaries as of December 31, 1998 and
September 30, 1998, and the related consolidated statements of income (loss),
shareholders' equity and cash flows for the three months ended December 31,
1998 and the year ended September 30, 1998. These financial statements 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 financial statements referred to above present fairly,
in all material respects, the financial position of Pepsi-Cola Puerto Rico
Bottling Company and subsidiaries as of December 31, 1998 and September 30,
1998, and the results of their operations and their cash flows for the three
months ended December 31, 1998 and the year ended September 30, 1998 in
conformity with generally accepted accounting principles.

Arthur Andersen LLP

Memphis, Tennessee,
March 11, 1999.

F-2
<PAGE>

Independent Auditors' Report

The Board of Directors Pepsi-Cola Puerto Rico Bottling Company and
Subsidiaries:

We have audited the accompanying consolidated balance sheets of Pepsi-Cola
Puerto Rico Bottling Company and Subsidiaries as of September 30, 1997, and
the related consolidated statements of income (loss), shareholders' equity and
cash flows for each of the years in the two-year period ended September 30,
1997. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Pepsi-Cola
Puerto Rico Bottling Company and Subsidiaries as of September 30, 1997, and
the results of their operations and their cash flows for each of the years in
the two-year period ended September 30, 1997, in conformity with generally
accepted accounting principles.

KPMG LLP

San Juan, Puerto Rico,
December 5, 1997.

Stamp No. 1527981 of the Puerto Rico
Society of Certified Public Accountants
was affixed to the record copy of this report.

F-3
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)

<TABLE>
<CAPTION>
September 30,
December 31, ------------------
1998 1998 1997
------------ -------- --------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................... $ 19,418 $ 24,720 $ 19,621
Accounts receivable:
Trade, less allowance for doubtful accounts
of $637, $1,265, and $1,389............... 13,043 11,722 11,681
Due from PepsiCo, Inc. and affiliated
companies................................. 2,008 1,408 943
Other...................................... 2,248 2,623 4,273
Inventories.................................. 2,505 2,480 2,802
Bottles, cases and shells.................... 1,409 1,357 1,559
Deferred income taxes........................ 49 224 97
Prepaid expenses and other current assets.... 4,422 4,743 2,073
-------- -------- --------
Total current assets..................... 45,102 49,277 43,049
DEFERRED INCOME TAXES......................... 1,221 1,607 1,619
LONG-LIVED ASSETS FOR SALE, principally land
and building................................. 2,615 2,615 3,752
PROPERTY AND EQUIPMENT, net................... 42,462 42,374 45,788
INTANGIBLE ASSETS, net of accumulated
amortization................................. 1,259 1,544 1,644
OTHER ASSETS.................................. 192 15 58
-------- -------- --------
Total assets............................. $ 92,851 $ 97,432 $ 95,910
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt....... $ 1,007 $ 1,007 $ 1,007
Current installments of capital lease
obligations................................. 41 176 908
Notes payable to bank........................ -- -- 5,430
Accounts payable:
Trade...................................... 3,842 8,115 13,587
Affiliates................................. -- -- 32
Income taxes payable......................... 237 150 199
Accrued expenses............................. 9,218 7,466 4,993
-------- -------- --------
Total current liabilities................ 14,345 16,914 26,156
LONG-TERM DEBT, excluding current
installments................................. 22,073 22,355 23,636
CAPITAL LEASE OBLIGATIONS, excluding current
installments................................. 7 8 513
ACCRUED PENSION COST.......................... 1,805 3,110 2,213
-------- -------- --------
38,230 42,387 52,518
-------- -------- --------
COMMITMENTS AND CONTINGENCIES (Note 18)
SHAREHOLDERS' EQUITY:
Class A common shares, $0.01 par value;
authorized,
issued and outstanding 5,000,000 shares..... 50 50 50
Class B common shares, $0.01 par value;
authorized 35,000,000 shares;
issued and outstanding 16,690,000,
16,690,000 and 16,500,000 shares............ 167 167 165
Additional paid-in-capital................... 127,516 127,009 103,910
Accumulated deficit.......................... (70,765) (69,345) (59,735)
Deferred compensation........................ (457) -- --
Accumulated other comprehensive income
(loss)...................................... (1,890) (2,836) (998)
-------- -------- --------
Total shareholders' equity............... 54,621 55,045 43,392
-------- -------- --------
Total liabilities and shareholders'
equity.................................. $ 92,851 $ 97,432 $ 95,910
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(U.S. Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Three Months Fiscal Years Ended
Ended September 30,
December 31, ---------------------------
1998 1998 1997 1996
------------ ------- -------- --------
<S> <C> <C> <C> <C>
Net sales........................... $28,328 $99,405 $ 99,172 $102,891
Cost of sales....................... 20,327 70,503 68,237 74,956
------- ------- -------- --------
Gross profit........................ 8,001 28,902 30,935 27,935
Selling and marketing expenses...... 6,868 30,072 30,224 42,456
Administrative expenses............. 1,843 6,047 8,424 9,606
Restructuring charges............... -- 1,728 535 2,700
Provision for legal and
environmental reserves............. -- 760 -- --
Losses on asset impairments......... 250 800 -- --
Insurance proceeds from business
interruption and other losses...... (346) (1,309) -- --
Litigation settlement expenses...... -- -- 13,172 --
------- ------- -------- --------
Loss from operations.............. (614) (9,196) (21,420) (26,827)
Other income (expense):
Gain on early termination of
supply agreement................. -- -- -- 2,111
Interest expense.................. (475) (2,437) (2,644) (1,523)
Interest income................... 270 839 1,218 2,418
Other, net........................ (7) 206 1 (256)
------- ------- -------- --------
Total other income (expense).... (212) (1,392) (1,425) 2,750
------- ------- -------- --------
Loss before income tax benefit
(expense) and equity
in net loss of BAESA............... (826) (10,588) (22,845) (24,077)
Income tax benefit (expense)........ (594) 978 3,342 1,205
------- ------- -------- --------
Loss before equity in net loss of
BAESA.............................. (1,420) (9,610) (19,503) (22,872)
Equity in net loss of BAESA, net of
income tax benefit of $20,062 in
1996............................... -- -- -- (51,458)
------- ------- -------- --------
Net loss............................ $(1,420) $(9,610) $(19,503) $(74,330)
======= ======= ======== ========
Net loss per common share........... $ (0.07) $ (0.45) $ (0.91) $ (3.46)
======= ======= ======== ========
Net loss per common share--assuming
dilution........................... $ (0.07) $ (0.45) $ (0.91) $ (3.46)
======= ======= ======== ========
Weighted average number of common
shares outstanding
(in thousands)..................... 21,690 21,516 21,500 21,500
======= ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For The Three Months Ended December 31, 1998 And
The Years Ended September 30, 1998, 1997 And 1996
(U.S. Dollars in thousands)

<TABLE>
<CAPTION>
Class Class Retained Accumulated
A B Additional Earnings Other Total
Common Common Paid-In (Accumulated Treasury Deferred Comprehensive Shareholders' Comprehensive
Shares Shares Capital Deficit) Stock Compensation Income (Loss) Equity Income (Loss)
------ ------ ---------- ------------ -------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
September 30,
1995............. $50 $165 $ 90,738 $ 39,472 $ -- $ -- $(1,776) $128,649
Cash dividends on
common shares
declared in
December 1995
(per share
$0.24)........... -- -- -- (5,374) -- -- -- (5,374)
Minimum pension
liability
adjustment....... -- -- -- -- -- -- 180 180 $ 180
Foreign currency
translation
adjustment....... -- -- -- -- -- -- 232 232 232
Net loss......... -- -- -- (74,330) -- -- -- (74,330) (74,330)
--- ---- -------- -------- ------- ----- ------- -------- --------
BALANCE,
September 30,
1996............. 50 165 90,738 (40,232) -- -- (1,364) 49,357 $(73,918)
=== ==== ======== ======== ======= ===== ======= ======== ========
Contribution of
2,500,000 Class B
common shares by
founding
shareholders..... -- -- 13,172 -- (13,172) -- -- --
Tendering of
2,500,000 Class B
common shares in
partial
settlement of
litigation....... -- -- -- -- 13,172 -- -- 13,172
Minimum pension
liability
adjustment....... -- -- -- -- -- -- 366 366 $ 366
Net loss......... -- -- -- (19,503) -- -- -- (19,503) (19,503)
--- ---- -------- -------- ------- ----- ------- -------- --------
BALANCE,
September 30,
1997............. 50 165 103,910 (59,735) -- -- (998) 43,392 $(19,137)
=== ==== ======== ======== ======= ===== ======= ======== ========
Sale of 190,000
Class B common
shares........... -- 2 948 -- -- -- -- 950
Sale of 5,000,000
Class A common
shares, net of
equity insurance
costs of $1,599.. -- -- 22,151 -- -- -- -- 22,151
Minimum pension
liability
adjustment....... -- -- -- -- -- -- (1,838) (1,838) $ (1,838)
Net loss......... -- -- -- (9,610) -- -- -- (9,610) (9,610)
--- ---- -------- -------- ------- ----- ------- -------- --------
BALANCE,
September 30,
1998............. 50 167 127,009 (69,345) -- -- (2,836) 55,045 $(11,448)
=== ==== ======== ======== ======= ===== ======= ======== ========
Deferred
compensation on
stock options.... -- -- 507 -- -- (457) -- 50
Minimum pension
liability
adjustment....... -- -- -- -- -- -- 946 946 $ 946
Net loss......... -- -- -- (1,420) -- -- -- (1,420) (1,420)
--- ---- -------- -------- ------- ----- ------- -------- --------
BALANCE, December
31, 1998......... $50 $167 $127,516 $(70,765) $ -- $(457) $(1,890) $ 54,621 $ (474)
=== ==== ======== ======== ======= ===== ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. Dollars in thousands)

<TABLE>
<CAPTION>
Three Months Fiscal Years Ended
Ended September 30,
December 31, ---------------------------
1998 1998 1997 1996
------------ ------- -------- --------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss........................... $(1,420) $(9,610) $(19,503) $(74,330)
Adjustments to reconcile net loss
to net cash used in operating
activities--
Gain on early termination of
supply agreement................ -- -- -- (2,111)
Litigation settlement expenses... -- -- 13,172 --
(Gain) loss on disposition of
property, plant and equipment... 11 80 238 (675)
Losses on asset impairments...... 250 800 -- 1,134
Restructuring charges............ -- 1,728 -- --
Provision for legal and
environmental reserves.......... -- 760 -- --
Insurance proceeds from business
interruption and other losses... (346) (1,309) -- --
Intangible asset write-off....... -- -- -- 624
Depreciation and amortization.... 1,127 5,312 5,971 5,589
Deferred compensation expense.... 50 -- -- --
Deferred income taxes............ 561 190 547 (1,462)
Equity in net loss of BAESA...... -- -- -- 51,458
Changes in assets and
liabilities--
Accounts receivable............ (1,200) 2,453 (2,335) 4,778
Inventories.................... (25) 322 1,627 113
Bottles, cases and shells...... (52) 202 (114) 184
Prepaid expenses and other
current assets................ 321 (2,670) (216) 659
Intangible assets.............. -- (109) (272) --
Accounts payable............... (4,273) (5,399) (3,050) 5,063
Other liabilities and accrued
expenses...................... 1,393 (84) (3,669) 2,195
Income taxes payable........... 87 (49) 84 (8)
Other, net..................... (177) (154) 16 247
------- ------- -------- --------
Net cash used in operating
activities................... (3,693) (7,537) (7,504) (6,542)
------- ------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from sales of property,
plant and equipment............... 12 480 406 1,347
Redemption of (investment in)
short-term investments............ -- -- 12,904 (12,904)
Capital expenditures............... (1,203) (2,997) (4,663) (24,421)
Dividends received from affiliate.. -- -- -- 2,839
------- ------- -------- --------
Net cash provided by (used in)
investing activities......... (1,191) (2,517) 8,647 (33,139)
------- ------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Sales of common stock, net of
equity issuance costs............. -- 23,101 -- --
Proceeds from short-term
borrowings........................ -- 72,784 712 47,900
Repayment of short-term
borrowings........................ -- (78,214) -- (27,500)
Principal payments on long-term
debt.............................. (282) (1,281) (1,722) (1,552)
Proceeds from capital leases....... -- -- 1,793 --
Repayment of capital lease
obligations....................... (136) (1,237) (985) (1,204)
Dividends paid..................... -- -- -- (5,374)
------- ------- -------- --------
Net cash provided by (used in)
financing activities......... (418) 15,153 (202) 12,270
------- ------- -------- --------
CHANGE IN CASH AND CASH
EQUIVALENTS........................ (5,302) 5,099 941 (27,411)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 24,720 19,621 18,680 46,091
------- ------- -------- --------
CASH AND CASH EQUIVALENTS, end of
period............................. $19,418 $24,720 $ 19,621 $ 18,680
======= ======= ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for--
Interest......................... $ 481 $ 2,437 $ 2,560 $ 2,416
Income taxes..................... -- 321 258 186
Noncash transactions--
Capital leases reclassified as
operating leases.............. -- -- 599 --
Proceeds from sale of asset,
net of underlying debt........ -- -- 287 --
Deferred compensation on stock
options....................... 507 -- -- --
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-7
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(U.S. Dollars in thousands, except per share data)

1. ORGANIZATION AND NATURE OF OPERATIONS:

Pepsi-Cola Puerto Rico Bottling Company ("PCPRB") and its manufacturing and
distribution subsidiaries bottle, sell and distribute beverages sold primarily
under the Pepsi-Cola trademark in the Commonwealth of Puerto Rico. The
Company's division of Cristalia Premium Water ("Cristalia") is engaged in
extracting, processing, bottling and distributing bottled water in Puerto
Rico. Beverage Plastics Company ("BEV"), a wholly owned subsidiary,
manufactures plastic preforms and plastic bottles in Puerto Rico, primarily
for use by the Company. All of the companies operate under exclusive bottling
appointments and franchise agreements with the franchiser, which include
operating and marketing commitments, term limitations and extensions, and
conditions for termination. The Pepsi-Cola exclusive bottling appointments
have ten-year terms expiring on July 17, 2008. Each of the exclusive bottling
appointments will automatically be extended for additional five-year terms
unless either party gives one year's written notice.

The consolidated financial statements include the accounts of PCPRB and its
wholly owned subsidiaries (the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation. As of
September 30, 1997 and 1996, the Company maintained an effective equity
interest in Buenos Aires Embotelladora S. A. ("BAESA") of approximately 17%,
which was accounted for using the equity method until such investment was
reduced to zero in fiscal year 1996. Effective June 17, 1998, the Company's
remaining ownership in BAESA was transferred to the Company's existing
shareholders (refer to Note 11).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include temporary investments in short-term
securities, primarily discount notes, with original maturities of three months
or less.

Income Taxes

The Company uses the liability method of accounting for deferred income
taxes. Deferred income taxes reflect the estimated future tax consequences
attributable to operating loss and tax credit carryforwards, and temporary
differences between the Company's assets and liabilities for financial
reporting and income tax purposes, using income tax rates currently in effect.
Deferred tax assets are recognized if management believes, based on available
evidence, that it is "more likely than not" that the future income tax
benefits will be realized.

Deferred tax assets or liabilities are classified based upon the current or
long-term classification of the asset or liability giving rise to the
temporary difference or the expected future use of the loss or credit
carryforward.

Earnings Per Share

The Company presents basic and diluted earnings per share in accordance with
the provisions of Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share." Accordingly, the Company's net loss per

F-8
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)
common share is computed by dividing the net loss by the weighted average
number of common shares outstanding. Net loss per common share--assuming
dilution does not include the Company's potentially dilutive securities (refer
to Note 17) because to do so would be antidilutive.

Stock-Based Compensation

Stock options and other stock-based compensation awards are accounted for
using the intrinsic value method prescribed by Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and
related interpretations.

Environmental Remediation Costs

Costs associated with environmental remediation obligations are accrued when
such costs are probable and reasonably estimable. Such accruals are adjusted
as further information develops or circumstances change. Costs of future
expenditures for environmental remediation obligations are not discounted to
their present value.

Concentration of Credit Risk

Trade receivables subject the Company to concentrations of credit risk as
substantially all of the Company's customers are located in Puerto Rico and
two customers accounted for approximately 14%, 16%, 20% and 22% of the
Company's net sales during the three month period ended December 31, 1998 and
the fiscal years 1998, 1997 and 1996, respectively. However, the Company's
customer base is comprised of a large number of entities and the Company
performs background checks and other reviews before extending credit to
potential customers. In addition, the Company establishes allowances for
doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information. Management believes there
are no significant concentrations of credit risk with any individual party or
groups of parties.

Fair Values of Financial Instruments

The estimated fair value of the Company's financial instruments approximate
their carrying values.

Reclassifications

Certain fiscal year 1998, 1997 and 1996 balances have been reclassified to
conform to the December 31, 1998 presentation.

3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Effective October 1, 1998 the Company adopted the provisions of SFAS No.
132, "Employers' Disclosures about Pensions and Other Postretirement Benefits"
which required, among other items, additional disclosures on changes in the
Company's pension benefit obligations and fair values of plan assets (refer to
Note 16).

F-9
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

4. RESTRUCTURING CHARGE

During the fourth quarter of fiscal year 1998, a restructuring charge of
$1,728 was established under a plan to improve the Company's performance. The
charge included approximately $679 of severance and related charges for the
elimination of 17 administrative personnel, $224 of accruals for future
payments to exit activities, including canceling lease agreements, and $825 of
asset write-downs related to the elimination of certain product lines and
exiting certain other business strategies. Management anticipates the
restructuring plan will provide annual savings of approximately $1,300 to
$1,400 beginning in 1999. Severance payments in the three month period ended
December 31, 1998 and in fiscal year 1998 totaled approximately $409 and $47,
respectively, while payments relating to other exit activities approximated
$116 and $108, respectively.

5. IMPAIRMENT OF LONG-LIVED ASSETS

In fiscal year 1996, the Company adopted the provisions of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of." This statement addresses the timing of recognition and the
measurement of impairment of (a) long-lived assets, certain identifiable
intangibles and goodwill related to those assets to be held and used, and (b)
long-lived assets and certain identifiable intangibles to be disposed of. This
statement requires that such assets be reviewed for impairment whenever events
or changes in circumstances indicate that their carrying amount may not be
recoverable, and that such assets be reported at the lower of carrying amount
or fair value.

During fiscal year 1996, the Company consolidated its manufacturing
activities into a new manufacturing facility. Based upon a 1996 appraisal of
the former facility, the Company recorded a noncash charge of $1,400; $800 for
the impairment of the manufacturing plant no longer in operation and being
held for sale, and $600 for certain manufacturing equipment and furniture no
longer in use. During fiscal year 1998, the Company recorded a noncash charge
of $800 for the additional impairment of the idle manufacturing plant held for
sale. This charge represented management's best estimate of an anticipated
loss from the disposition of the plant in a current transaction between
willing parties. The resulting carrying value of the manufacturing plant is
consistent with a 1998 appraisal on the facility obtained during the three
months ended December 31, 1998.

The Company has agreed to sell substantially all net assets relating to the
bottling, sale and distribution of potable water under the "Cristalia"
tradename to Cristalia Acquisition Corp., a corporation whose president is a
former officer of the Company. The sales price is based upon the net book
value of the net assets of the business as of December 31, 1998, and resulted
in a charge of $250 for the impairment of the net assets. The noncash charge
was recorded in the three month period ended December 31, 1998 as a write-down
of Cristalia's long-lived assets and is reflected as an asset impairment loss
in the accompanying consolidated statement of income (loss).

6. INSURANCE PROCEEDS FROM BUSINESS INTERRUPTION AND OTHER LOSSES

For the period from September 22, 1998 through October 21, 1998, the Company
incurred business interruption losses resulting from Hurricane Georges. In the
opinion of management and pursuant to a preliminary review by the insurer,
collection of a claim filed under the Company's business interruption
insurance policy is probable. As a result, included in the accompanying
consolidated statements of income (loss) are anticipated recoveries of $346
for the three month period ended December 31, 1998 and $1,309 for fiscal year
1998 attributable to business interruption and other losses.

F-10
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

7. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market and included the following:

<TABLE>
<CAPTION>
September 30,
December 31, -------------
1998 1998 1997
------------ ------ ------
<S> <C> <C> <C>
Raw materials................................. $1,074 $1,438 $1,070
Finished goods................................ 1,431 877 1,254
Spare parts and supplies...................... -- 117 121
Work-in process............................... -- 48 357
------ ------ ------
$2,505 $2,480 $2,802
====== ====== ======
</TABLE>

8. PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Property and equipment renewals
and betterments are capitalized, while maintenance and repair expenditures are
charged to operations currently. Property and equipment under capital leases
are stated at the present value of minimum lease payments. Depreciation is
calculated using the straight-line method over the estimated useful lives of
purchased assets, or the shorter of the lease terms or the estimated useful
lives of assets acquired under capital lease arrangements. Those lives are as
follows:

<TABLE>
<CAPTION>
Years
-----
<S> <C>
Building and improvements........................................... 40
Machinery, equipment and vehicles................................... 10-15
Furniture and fixtures.............................................. 5-10
</TABLE>

Property and equipment included the following:

<TABLE>
<CAPTION>
September 30,
December 31, ------------------
1998 1998 1997
------------ -------- --------
<S> <C> <C> <C>
Land and improvements.................... $ 6,893 $ 6,893 $ 7,057
Building and improvements................ 14,779 14,790 14,682
Machinery, equipment and vehicles........ 47,881 48,040 46,780
Furniture and fixtures................... 1,809 1,809 1,580
Construction in process.................. 1,250 134 86
-------- -------- --------
72,612 71,666 70,185
Less--Accumulated depreciation........... (30,150) (29,292) (24,397)
-------- -------- --------
$ 42,462 $ 42,374 $ 45,788
======== ======== ========
</TABLE>

F-11
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

9. INTANGIBLE ASSETS

Goodwill, the cost in excess of the assigned value of businesses acquired,
is being amortized using the straight-line method over its economic life not
to exceed 40 years. Other intangibles are amortized using the straight-line
method over their estimated useful lives. Intangible assets consisted of the
following:

<TABLE>
<CAPTION>
September 30,
December 31, --------------
1998 1998 1997
------------ ------ ------
<S> <C> <C> <C>
Goodwill..................................... $ 1,277 $1,277 $1,277
Trademark (14 years)......................... 300 300 300
Water distribution rights (20 years)......... 165 165 165
Deferred costs and other..................... 587 587 478
------- ------ ------
2,329 2,329 2,220
Less--Accumulated amortization............... (1,070) (785) (576)
------- ------ ------
$ 1,259 $1,544 $1,644
======= ====== ======
</TABLE>

The Company periodically evaluates the recoverability of its intangible
assets as well as their amortization periods to determine whether an
adjustment to the carrying value or a revision to the estimated useful lives
is appropriate. The Company recorded a noncash charge of approximately $600 in
fiscal year 1996 in order to write off intangible assets.

10. ACCRUED EXPENSES

Accrued expenses consisted of the following:

<TABLE>
<CAPTION>
September 30,
December 31, -------------
1998 1998 1997
------------ ------ ------
<S> <C> <C> <C>
Accrued payroll and related benefits.......... $1,449 $1,854 $2,176
Accrued taxes other than income............... 529 364 374
Marketing and advertising accruals............ 1,946 1,313 825
Accrued restructuring charges................. 223 748 163
Legal and environmental reserves.............. 660 760 --
Customer deposits............................. 562 484 436
Accrued trade payables........................ 3,257 1,884 891
Other accrued expenses........................ 592 59 128
------ ------ ------
$9,218 $7,466 $4,993
====== ====== ======
</TABLE>

11. INVESTMENT IN BAESA

As of September 30, 1997, the Company owned 12,345,348 shares, or
approximately 17%, of the outstanding capital stock of BAESA. In May 1997, the
Buenos Aires Stock Exchange suspended trading of BAESA's Class B shares after
its fiscal second quarter results for the period ended March 31, 1997 showed a
negative net worth under Argentine Accounting Principles. The New York Stock
Exchange also halted trading in BAESA's American Depository Shares.

During fiscal year 1998, BAESA entered into a long-term financial
restructuring plan with its major debt holders in Argentina whereby BAESA's
unsecured lenders exchanged debt for substantially all of the equity in BAESA.
The Company did not exercise its right under a related rights offering to
retain its current proportionate

F-12
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

ownership in BAESA, resulting in a dilution of the Company's equity interest
from approximately 17% to approximately 0.34%. Effective June 17, 1998, the
Company's remaining ownership in BAESA was transferred to the Company's
existing shareholders. The Company's recorded investment in BAESA had already
been reduced to zero in fiscal year 1996.

12. NOTES PAYABLE TO BANK AND LONG-TERM DEBT

The Company maintains a credit agreement with Banco Popular which provides
for a term loan of $25,000, payable with 120 principal payments and a balloon
payment at maturity on April 1, 2007 of $11,800. The term loan is
collateralized with a priority lien on substantially all of the Company's real
estate, machinery and equipment, receivables and inventory. The Company is
also required to maintain a specified cash balance with the bank ($5,000 at
December 31, 1998 and September 30, 1998, and $2,500 at September 30, 1997)
which is restricted from use by the Company.

The credit agreement also includes a $5,000 revolving credit facility, with
borrowings limited to the sum of stipulated percentages of the Company's
eligible receivables and inventory. There were no borrowings outstanding under
the revolving credit facility as of December 31, 1998 or September 30, 1998,
while it was fully drawn at September 30, 1997.

The term loan and revolving credit facility bear interest at 2.5% over the
LIBOR rate, if Eurodollar funds are available, otherwise at the highest prime
rate or base rate of interest published from time to time in the Wall Street
Journal by principal commercial banks headquartered in New York, NY. The
credit agreement contains various covenants and events of default, including
the maintenance of certain minimum financial ratios and financial requirements
and additional debt restrictions.

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
September 30,
December 31, ----------------
1998 1998 1997
------------ ------- -------
<S> <C> <C> <C>
Term Loan.................................. $23,048 $23,330 $24,583
Other...................................... 32 32 60
------- ------- -------
23,080 23,362 24,643
Less--current installments................. (1,007) (1,007) (1,007)
------- ------- -------
$22,073 $22,355 $23,636
======= ======= =======
</TABLE>

Scheduled maturities of long-term debt for the four years subsequent to 1999
are as follows:

<TABLE>
<CAPTION>
Year Amount
---- -------
<S> <C>
2000.............................................................. $ 1,157
2001.............................................................. 1,225
2002.............................................................. 1,250
2003.............................................................. 1,437
Thereafter........................................................ 17,004
-------
$22,073
=======
</TABLE>

F-13
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

13. INCOME TAXES:

PCPRB and its subsidiaries are Delaware corporations subject to U.S. federal
income taxes; however, PCPRB's subsidiaries are eligible for and have elected
the benefit of Section 936 of the U.S. Internal Revenue Code. Section 936
presently allows a tax credit equal to a portion of the amount of U.S. income
taxes attributable to earnings derived from operations within Puerto Rico and
to certain qualified investments maintained in Puerto Rico, subject to certain
limitations. PCPRB's subsidiaries have elected to claim the credit under the
Economic Activity Limitation method. The 1996 Small Business Act (the "Act")
repealed the Section 936 credit prospectively. However, the Act grandfathered
in "existing credit claimants" during a ten-year transition period. The credit
under the Economic Activity Limitation for Puerto Rico will be calculated
under the rules existing prior to the adoption of the Act for taxable years
beginning after 1995 and before 2002. For taxable years beginning after
December 31, 2001, a cap is placed upon the Puerto Rican source business
income eligible for the credit. For tax years beginning after January 1, 2006,
the economic activity credit is repealed in its entirety.

In order to utilize income tax credits available under Section 936, each
subsidiary is required to derive at least 80% of its gross income from sources
within Puerto Rico, and at least 75% of gross income must be from an active
trade or business in Puerto Rico. PCPRB's subsidiaries were in compliance with
these gross income requirements for the three months ended December 31, 1998
and the fiscal years ended September 30, 1998, 1997 and 1996.

Effective October 1998, the Company was granted an additional ten-year
Puerto Rican tax incentives exemption for its plastic preforms manufacturing
and sales operation. Under the terms of the grant, BEV received a 90%
exemption from Puerto Rico income tax, a 60% exemption from municipal tax and
a 90% exemption from property tax. In exchange for these tax exemptions, the
Company agreed to manufacture plastic preforms and plastic bottles, employ a
minimum number of persons and maintain equipment and facilities in Puerto
Rico.

F-14
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

The combined income tax expense (benefit) of PCPRB and its subsidiaries
attributable to income (loss) from continuing operations consisted of the
following:

<TABLE>
<CAPTION>
Three Months Fiscal Years Ended
Ended September 30,
December 31, -------------------------
1998 1998 1997 1996
------------ ------- ------- -------
<S> <C> <C> <C> <C>
Current:
U.S.............................. $-- $(1,251) $(4,231) $ (150)
Puerto Rico...................... 33 83 342 185
---- ------- ------- -------
Total current income tax
expense (benefit)............. 33 (1,168) (3,889) 35
---- ------- ------- -------
Deferred:
U.S.............................. 99 223 -- (326)
Puerto Rico...................... 462 (33) 547 (914)
---- ------- ------- -------
Total deferred income tax
expense (benefit)............. 561 190 547 (1,240)
---- ------- ------- -------
Total income tax expense
(benefit)..................... $594 $ (978) $(3,342) $(1,205)
==== ======= ======= =======
</TABLE>

Income tax expense (benefit) attributable to income (loss) from continuing
operations differed from the amounts computed by applying the U.S. statutory
federal tax rate (34% for the three months ended December 31, 1998; 35% for
fiscal years 1998, 1997 and 1996) as a result of the following:

<TABLE>
<CAPTION>
Three Months Fiscal Years Ended
Ended September 30,
December 31, -------------------------
1998 1998 1997 1996
------------ ------- ------- -------
<S> <C> <C> <C> <C>
Computed statutory federal tax
expense (benefit)................. $(281) $(3,706) $(7,984) $(8,209)
Change in the beginning-of-the-year
balance of the valuation allowance
for deferred tax assets........... (673) 11,234 13,829 17,734
Calculated NOL value of
aforementioned loss, as adjusted,
for Puerto Rico income taxes...... -- -- (6,437) --
Puerto Rico income taxes........... 1,503 (6,094) 342 (9,668)
Puerto Rico economic activity
credit............................ (790) (1,304) (2,050) (1,484)
Income tax credit related to prior
year's losses..................... -- -- (745) --
Carryback of U.S. federal net
operating losses, previously
reserved.......................... 196 (1,251) -- --
Tax rate changes................... 585 -- -- --
Meals and entertainment
disallowance...................... 51 227 -- --
Other, net......................... 3 (84) (297) 422
----- ------- ------- -------
Total income tax expense
(benefit)..................... $ 594 $ (978) $(3,342) $(1,205)
===== ======= ======= =======
</TABLE>
Current and deferred income tax benefit of $20,062 in fiscal year 1996 was
also provided in connection with the equity in net loss of BAESA.

F-15
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

The significant components of deferred income tax expense (benefit)
attributable to income (loss) from continuing operations are as follows:

<TABLE>
<CAPTION>
Three Months Fiscal Years Ended
Ended September 30,
December 31, ----------------------------
1998 1998 1997 1996
------------ -------- -------- --------
<S> <C> <C> <C> <C>
Deferred income tax expense
(benefit)....................... $1,234 $(11,044) $(13,282) $(18,974)
Increase (decrease) in beginning
of the year balance of the
valuation allowance for deferred
tax assets...................... (673) 11,234 13,829 17,734
------ -------- -------- --------
Total deferred income tax
expense (benefit)............. $ 561 $ 190 $ 547 $ (1,240)
====== ======== ======== ========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below:

<TABLE>
<CAPTION>
September 30,
December 31, ------------------
1998 1998 1997
------------ -------- --------
<S> <C> <C> <C>
Property and equipment, principally due to
differences in depreciable lives......... $ 2,201 $ 1,204 $ 496
U.S. federal net operating loss
carryforwards............................ 18,412 17,656 13,200
Puerto Rico net operating loss and tax
credit carryforwards..................... 29,897 31,178 26,986
Accrued expenses.......................... 1,733 2,373 387
Past service cost for pension plan........ (107) (110) 426
Inventories, principally due to additional
costs inventoried for tax purposes....... 52 73 90
Accounts receivable....................... 593 1,296 1,005
Other, net................................ 73 418 149
-------- -------- --------
Total deferred tax assets............... 52,854 54,088 42,739
Less--Valuation allowance............... (51,584) (52,257) (41,023)
-------- -------- --------
Net deferred tax asset.................. $ 1,270 $ 1,831 $ 1,716
======== ======== ========
</TABLE>

The subsequent recognition of tax benefits related to the valuation
allowance for deferred tax assets as of December 31, 1998 and September 30,
1998 and 1997 will be allocated to income from continuing operations.

At December 31, 1998, the Company had U.S. federal net operating loss
carryforwards approximating $54,200 which expire through 2019, and Puerto Rico
tax net operating loss carryforwards approximating $76,300 which expire
through 2006. As a result of the change in control transaction in fiscal year
1998 (refer to Note 15), the Company's utilization of its U.S. federal net
operating loss carryforwards is limited annually. Realization of all of these
future income tax benefits is dependent on the existence of future taxable
income. Valuation allowances covering substantially all of the Company's net
operating loss carryforwards have been provided as the Company does not
believe it is "more likely than not" that the future income tax benefits will
be realized.

14. RELATED PARTY TRANSACTIONS

In fiscal year 1998, the Company entered into a management agreement with
the controlling partner in P-PR Transfer, LLP (refer to Note 15). For services
performed pursuant to the management agreement, the Company

F-16
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)
pays that company a management fee. Management fees of approximately $63 and
$50 were incurred in the three-month period ended December 31, 1998 and in
fiscal year 1998, respectively.

Also in fiscal year 1998, the Company entered into an accounting services
agreement with a separate entity in which the same controlling partner in P-PR
Transfer, LLP maintains a controlling interest. For services performed
pursuant to the accounting services agreement, the Company pays this affiliate
an accounting services fee. Accounting services fees of approximately $94 and
$76 were incurred with this affiliate in the three-month period ended December
31, 1998 and in fiscal year 1998, respectively. During the three months ended
December 31, 1998, the Company purchased approximately $5,411 of beverage
product from this affiliate at cost, and as of December 31, 1998, had a
liability to this affiliate of approximately $255.

During the three months ended December 31, 1998 and in fiscal years 1998,
1997 and 1996 the Company paid approximately $175, $744, $3,671 and $2,105,
respectively, in advertising fees to a firm controlled by a former shareholder
of the Company.

During the three months ended December 31, 1998 and in fiscal years 1998,
1997 and 1996 the Company paid approximately $16, $241, $411 and $57,
respectively, in legal fees to a firm with a partner who is a relative of the
Company's former president.

Certain former members of the Company's Board of Directors and certain of
its former executive officers were also directors and/or officers of BAESA
until approximately mid-1996. During fiscal year 1996, BAESA charged PCPRB
management fees totaling approximately $888. In addition, PCPRB sold $2,235 in
preforms to BAESA pursuant to a long-term supply contract. In management's
opinion, the terms of this contract were reasonable, and at the time of the
contract no other comparable contract from an outside party was available to
BAESA. The above described contract was terminated during the year ended
September 30, 1997. Pursuant to the termination agreement, Company obligations
to BAESA of approximately $2,065 were settled for a cash payment of $50. In
addition, the Company was relieved of obligations relating to certain
operating leases. The resulting gain on early termination of the supply
agreement was recorded in fiscal year 1996.

During fiscal year 1996, the Company paid approximately $151 in construction
management fees to a former shareholder and director of the Company.

During fiscal year 1996, the Company paid approximately $232 in consulting
fees to a former shareholder of BAESA and a former director of the Company.

15. SHAREHOLDERS' EQUITY

Pursuant to the terms of a ten-year voting trust agreement and related stock
option agreement executed on September 28, 1996, the 5,000,000 authorized and
outstanding Class A shares were placed into a voting trust. The then trustee
of the trust was the president of the Company, who held an unrestricted right
to vote such shares and had the right to purchase such shares, for the benefit
of the Company, through September 28, 1998 at $1 per share. In a transfer
agreement (the "Agreement") effective July 17, 1998, the president assigned to
P-PR Transfer, LLP (the "Partnership") the stock option agreement for the
purchase of the Class A shares. The Partnership paid the Company $23,750 under
the Agreement and simultaneously purchased the 5,000,000 Class A shares for $1
per share. Payments by the Partnership to the Company pursuant to the
Agreement are recorded as additional shareholders' equity, net of
approximately $1,599 in equity issuance costs.

F-17
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

Also effective July 17, 1998, the Partnership purchased a total of 6,210,429
Class B shares under stock option agreements between the Partnership and the
Class B shareholders. V. Suarez & Co., Inc. ("Suarez") then purchased
1,000,000 Class A shares and 1,242,085 Class B shares from the Partnership.
The combination of these transactions resulted in a change in control of the
Company.

On July 17, 1998, the Company issued a warrant to the Partnership and Suarez
for the purchase of an additional 1,360,000 and 340,000 Class B shares,
respectively, for $6.875 per share, exercisable at any time during the 90
month period from the date of the warrant.

The Class A shares have a six-to-one voting preference over the Class B
shares.

16. PENSION PLANS

The Company maintains separate non-contributory salaried and hourly defined
benefit pension plans covering eligible salaried and hourly employees of the
Company. Benefits under the salaried plan are based upon years of service and
average earnings during the last five years of employment, while benefits
under the hourly plan represent a fixed amount times years of credited
service. The Company makes annual contributions to the plans as required by
applicable regulations. Contributions provide benefits for service rendered to
date and for services expected to be performed in the future. The plans are
insured by the Pension Benefit Guaranty Corporation. On April 16, 1997, the
Company suspended future participation in the plans for an indeterminable
period. As a result, the projected benefit obligation is equal to the
accumulated benefit obligation for each plan. At present management does not
intend to terminate the plans.

The Company recognizes a minimum pension liability, computed as the excess
of the accumulated benefit obligation over the fair value of plan assets, with
an adjustment to shareholders' equity.

F-18
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

The following table presents the changes in benefit obligation and plan
assets for the three months ended December 31, 1998 and the fiscal years 1998
and 1997, and the plans' funded status and amounts recognized in the
consolidated balance sheets as of December 31, 1998 and September 30, 1998 and
1997.

<TABLE>
<CAPTION>
Fiscal Years
Three Months Ended September
Ended 30,
December 31, ----------------
1998 1998 1997
------------ ------- -------
<S> <C> <C> <C>
Changes in benefit obligation:
Benefit obligation, beginning of period....... $ 7,650 $ 7,195 $ 7,711
Service cost.................................. -- -- 108
Interest cost................................. 131 491 557
Actuarial (gain) loss......................... -- 791 (271)
Benefits paid................................. (119) (827) (910)
------- ------- -------
Benefit obligation, end of period............. $ 7,662 $ 7,650 $ 7,195
======= ======= =======
Change in plan assets:
Fair value of plan assets, beginning of
period....................................... $ 4,498 $ 4,903 $ 4,579
Actual return on plan assets.................. 1,024 (599) 724
Employer contribution......................... 404 1,021 510
Benefits paid................................. (119) (827) (910)
------- ------- -------
Fair value of plan assets, end of period...... $ 5,807 $ 4,498 $ 4,903
======= ======= =======
Funded status................................... $(1,855) $(3,152) $(2,292)
Unrecognized actuarial loss..................... 1,890 2,836 998
Unrecognized prior service cost................. -- -- --
------- ------- -------
Prepaid (accrued) benefit cost recognized....... $ 35 $ (316) $(1,294)
======= ======= =======
Amounts recognized in the consolidated balance
sheets
consist of:
Accrued pension cost, including a $50, $42 and
$79
current portion.............................. $(1,855) $(3,152) $(2,292)
Minimum pension liability adjustment included
in accumulated other comprehensive income.... 1,890 2,836 998
------- ------- -------
Net amount recognized........................... $ 35 $ (316) $(1,294)
======= ======= =======
</TABLE>

Net periodic pension cost for the Company's pension plans comprised the
following:

<TABLE>
<CAPTION>
Fiscal Years
Three Ended
Months Ended September 30,
December 31, -----------------
1998 1998 1997 1996
------------ ----- ---- ----
<S> <C> <C> <C> <C>
Changes in benefit obligation:
Service cost.............................. $ -- $ -- $108 $160
Interest cost............................. 131 491 557 518
Expected return on plan assets............ (104) (478) (425) (329)
Amortization of prior service cost........ -- -- 11 25
Amortization of actuarial loss............ 23 24 165 213
----- ----- ---- ----
Net periodic pension cost................. $ 50 $ 37 $416 $587
===== ===== ==== ====
</TABLE>

F-19
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

Key assumptions used in preparing the December 31, 1998 and September 30,
1998, 1997 and 1996 actuarial valuations include the following:

<TABLE>
<CAPTION>
Fiscal Years
Three Ended
Months Ended September 30,
December 31, --------------
1998 1998 1997 1996
------------ ---- ---- ----
<S> <C> <C> <C> <C>
Discount rate.................................... 7% 7% 7% 7%
Salary scale for salaried plan N/A N/A 4% 4%
Expected return on plan assets................... 9% 9% 9% 9%
</TABLE>

17. STOCK OPTION PLANS:

In fiscal year 1997, the Company adopted two stock option plans (the
"plans") pursuant to which the Company's Board of Directors may grant stock
options to certain employees and directors of the Company and its affiliates
who have served in such capacities for at least one year prior to the date the
options are granted. The plans authorize grants of options to purchase up to
1,000,000 shares of authorized but unissued Class B common stock. At December
31, 1998, there were 247,500 shares available for grant under these plans. One
of these stock option plans is designed to be qualified for income tax
purposes, whereas the other is not a qualified plan.

Stock options under the qualified plan are granted with an exercise price
equal to the stock's fair market value at the date of the grant. Stock options
under the nonqualified plan may have an exercise price below the stock's fair
market value at the date of grant ("below market options"). In accordance with
APB Opinion No. 25, deferred compensation is recorded to reflect any
difference between the exercise price and market value of shares granted under
the nonqualified plan for below market options, and is expensed over the
vesting period of the options. During the three months ended December 31,
1998, the Company granted below market options to acquire 452,500 shares of
the Company's Class B stock, which vest over five years. Accordingly, deferred
compensation expense of $50 was recorded related to this grant. All stock
options vest and become fully exercisable in accordance with the terms of
their grant.

In fiscal year 1997, the Company entered into a stock option agreement with
its former president to acquire 1,516,667 Class B common shares of the Company
at an exercise price of $5.00 per share. These stock options will be
exercisable in whole or in part until exercised in full.

The Company accounts for these plans using the intrinsic value method. Had
compensation cost for these plans been determined consistent with SFAS No.
123, "Accounting for Stock-Based Compensation," the Company's net loss and net
loss per common share would have been reduced to the following pro forma
amounts:

<TABLE>
<CAPTION>
Fiscal Years
Three Ended
Months Ended September 30,
December 31, -----------------
1998 1998 1997
------------ ------- --------
<S> <C> <C> <C>
Net loss:
As reported............................. $(1,420) $(9,610) $(19,503)
Pro forma............................... (1,646) (10,262) (25,510)
Net loss per common share:
As reported............................. $ (0.07) $ (0.45) $ (0.91)
Pro forma............................... (0.08) (0.47) (1.19)
</TABLE>

F-20
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

The effect on pro forma net loss and net loss per common share of expensing
the estimated fair value of stock options is not necessarily representative of
the effect on reported earnings in future years due to the vesting period of
stock options and the potential for issuance of additional stock options in
future years.

The weighted average fair value of options granted for the three months
ended December 31, 1998 and in fiscal years 1998 and 1997 were $3.06, $4.91
and $3.52, respectively. The fair value of each option grant was estimated on
the date of grant using the Black-Scholes option pricing model with the
following assumptions:

<TABLE>
<CAPTION>
Fiscal
Years Ended
Three September
Months Ended 30,
December 31, ------------
1998 1998 1997
------------ ----- -----
<S> <C> <C> <C>
Risk-free interest rate....................... 6.0% 6.0% 6.1%
Price volatility.............................. 33.7% 66.7% 51.5%
Expected dividend yield....................... 0.0% 0.0% 0.0%
Expected term (in years)...................... 10 10 10
</TABLE>

A summary of the Company's stock option plans at December 31, 1998 and
September 30, 1998 and 1997, and changes during the periods then ended, is as
follows:

<TABLE>
<CAPTION>
No. of
Shares Price Range
--------- -----------
<S> <C> <C>
Outstanding at September 30, 1996................ -- --
Granted.......................................... 1,706,667 $ 5.00
Exercised........................................ -- --
Lapsed or canceled............................... -- --
--------- -----------
Outstanding at September 30, 1997................ 1,706,667 $ 5.00
Granted.......................................... 110,000 $6.25-$8.75
Exercised........................................ (190,000) $ 5.00
Lapsed or canceled............................... -- --
--------- -----------
Outstanding at September 30, 1998................ 1,626,667 $5.00-$8.75
Granted.......................................... 452,500 $ 3.63
Exercised........................................ -- $ --
Lapsed or canceled............................... -- --
--------- -----------
2,079,167 $3.63-$8.75
========= ===========
</TABLE>

At December 31, 1998, the number of options exercisable was 1,626,667. The
weighted average exercise price of all options and options exercisable was
$4.77 and $5.17, respectively, and the weighted average remaining contractual
life of all options and options exercisable was 8.93 years and 8.28 years,
respectively.

18. COMMITMENTS AND CONTINGENCIES:

Lease Commitments

The Company leases certain office space and other facilities under
agreements expiring through 2006. Total rent expense during the three months
ended December 31, 1998 and fiscal years 1998, 1997 and 1996 was approximately
$406, $1,657, $1,661 and $1,387, respectively.

F-21
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

Future minimum rental payments under all noncancellable operating leases
with initial or remaining lease terms of one year or more were as follows at
December 31, 1998:

<TABLE>
<CAPTION>
Total
Operating
Year Leases
---- ---------
<S> <C>
1999............................................................ $2,026
2000............................................................ 1,869
2001............................................................ 1,800
2002............................................................ 1,800
2003............................................................ 1,800
</TABLE>

Future minimum lease payments under capital leases were as follows at
December 31, 1998:

<TABLE>
<CAPTION>
Total Capital
Year Leases
---- -------------
<S> <C>
1999.................... $47
2000.................... 7
---
Total minimum lease
payments............... 54
Less--amount
representing interest
at 10.25% to 12%....... (6)
---
Present vale of minimum
lease payments......... 48
Less--Current
installments........... (41)
---
Capital lease
obligations, excluding
current installments... $ 7
===
</TABLE>

Legal and Environmental Reserve

In fiscal year 1998, the Company recorded a provision of $760 to increase
its legal and environmental reserves, principally to remove four underground
storage tanks and remediate soil contamination at the former manufacturing
facility, to settle two outstanding supplier claims and to establish legal
reserves for various litigation, claims and assessments. All payments related
to this reserve are expected to be made within one year.

Settlement of Litigation

The Company was formerly a defendant in nine class actions alleging federal
securities violations by the Company and various former officers and directors
of the Company. These claims were settled as of September 30, 1997. The
Company has recorded the cost of the settlement in fiscal year 1997 as
follows:

<TABLE>
<S> <C>
Cost of 2,500,000 Class B shares effectively contributed by the
founding shareholders, valued using the average trading price
of the stock for a period of trade dates prior to the date of
the settlement................................................ $ 13,172
Cash payments of $2,500, less recovery from insurers........... --
--------
$ 13,172
========
</TABLE>

As a part of the settlement, the Company was reimbursed $4,000 from its
directors liability insurers, $2,500 of which were deemed a reimbursement of
amounts paid to claimants, with the remainder offset against legal expenses
incurred in connection with the settlement. The contribution of the 2,500,000
Class B shares by the founding shareholders was reflected as a contribution of
capital using the average trading price of the stock referred to above.

F-22
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(U.S. Dollars in thousands, except per share data)

The effect of the settlement on the pre-tax results of the Company for the
fiscal year ended September 30, 1997, was as follows:

<TABLE>
<S> <C>
Reduction in administrative expenses............................. $ 1,500
Settlement of the litigation..................................... (13,172)
-------
Net effect on net income (loss)................................ (11,672)
Contribution of Class B shares by founding shareholders.......... 13,172
-------
Net effect on shareholders' equity............................. $ 1,500
=======
</TABLE>

In addition, the Securities and Exchange Commission (the "Commission") was
pursuing a formal order of investigation in connection with accounting
irregularities discovered in fiscal year 1996. In fiscal year 1998, the
Company settled the Commission's charges with an agreement to cease and desist
from committing any violation or future violation of specified securities
laws. The Company was not required to pay any fines or penalties associated
with this settlement.

General Litigation

The Company is subject to various litigation, claims and assessments arising
in the normal course of business. Management believes that the ultimate
resolution of these matters, either individually or in the aggregate, will not
have a materially adverse effect on the Company's consolidated financial
position or results of operations.

19. CHANGE IN YEAR-END

Effective January 1, 1999, the Company changed its fiscal year-end from
September 30 to December 31. As a result, the Company will hereafter report
its results on a calendar year basis. Summarized financial information for the
three months ended December 31 is as follows:

<TABLE>
<CAPTION>
1997
1998 (Unaudited)
------- -----------
<S> <C> <C>
Net sales........................................... $28,328 $25,517
Gross profit........................................ 8,001 8,318
Income tax expense.................................. 594 125
Net loss............................................ (1,420) (991)
Net loss per common share--basic.................... (0.07) (0.05)
Net loss per common share--assuming dilution........ (0.07) (0.05)
Weighted average number of common shares outstanding
(in thousands)..................................... 21,690 21,500
</TABLE>

F-23
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE

To Pepsi-Cola Puerto Rico Bottling Company:

We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Pepsi-Cola Puerto Rico Bottling
Company and subsidiaries as of and for the three month period ended December
31, 1998 and the year ended September 30, 1998, and have issued our report
thereon dated March 11, 1999. Our audit was made for the purpose of forming an
opinion on those statements taken as a whole. The accompanying schedule is the
responsibility of the Company's management and is presented for the purpose of
complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the December 31,
1998 and September 30, 1998 financial data required to be set forth in
relation to the basic financial statements taken as a whole.

Arthur Andersen LLP

Memphis, Tennessee,
March 11, 1999.

F-24
<PAGE>

INDEPENDENT AUDITORS' REPORT
ON FINANCIAL STATEMENT SCHEDULE

The Board of Directors of Pepsi-Cola Puerto Rico Bottling Company and
Subsidiaries:

We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Pepsi-Cola Puerto Rico Bottling
Company and Subsidiaries as of September 30, 1997, and for each of the years
in the two-year period ended September 30, 1997, and have issued our report
thereon dated December 5, 1997. Our audit was made for the purpose of forming
an opinion on those statements taken as a whole. The schedule listed in Item
14(a)2 is the responsibility of the Company's management and is presented for
the purpose of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material
respects the 1997 and 1996 financial data required to be set forth in relation
to the basic financial statements taken as a whole.

KPMG LLP

San Juan, Puerto Rico,
December 5, 1997.

Stamp No. 1527982 of the Puerto Rico
Society of Certified Public Accountants
was affixed to the record copy of this report.

F-25
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES
Schedule II Valuation and Qualifying Accounts
(U.S. Dollars in thousands)

<TABLE>
<CAPTION>
Additions
Balance at --------------------------------------------
Beginning of Charged to Costs Charged to Other Balance at End
Period and Expenses Accounts Deductions of Period
------------ ---------------- ---------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Three Months Ended
December 31, 1998:
Allowance for Doubtful
Accounts............. $ 1,265 $ 174 $-- $ (802)(1) $ 637
Restructuring
Charges.............. 748 -- -- (525)(3) 223
Fiscal Year Ended
September 30, 1998:
Allowance for Doubtful
Accounts............. 1,389 498 -- (622)(1) 1,265
Restructuring
Charges.............. 163 903 -- (318)(2) 748
Fiscal Year Ended
September 30, 1997:
Allowance for Doubtful
Accounts............. 1,158 355 -- (124)(1) 1,389
Restructuring
Charges.............. -- 535 -- (372) 163
Fiscal Year Ended
September 30, 1996:
Allowance for Doubtful
Accounts............. 1,458 511 -- (811)(1) 1,158
Restructuring
Charges.............. -- 2,700 -- (2,700) --
</TABLE>
- --------
(1) Write off of uncollectible receivables.
(2) Comprised of $215 of severance payments and other exit costs and $103
reversed into income.
(3) Comprised of $525 of severance payments and other exit costs.

F-26
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(U. S. Dollars in thousands, except share data)

CURRENT LIABILITIES:
Current installments of long-term debt............... $ 1,070 $ 1,007
Current installments of capital lease obligations.... 17 41
Accounts payable..................................... 6,411 3,842
Accrued expenses..................................... 7,571 9,455
-------- --------
Total current liabilities........................ 15,069 14,345
-------- --------
LONG-TERM DEBT, excluding current installments........ 20,823 22,073
CAPITAL LEASE OBLIGATIONS, excluding current
installments......................................... -- 7
ACCRUED PENSION COST.................................. 1,558 1,805
SHAREHOLDERS' EQUITY:
Class A common shares, $0.01 par value; authorized,
issued and outstanding 5,000,000 shares............. 50 50
Class B common shares, $0.01 par value; authorized
35,000,000 shares, issued and outstanding
16,690,000 shares................................... 167 167
Additional paid-in capital........................... 127,516 127,516
Accumulated deficit.................................. (75,955) (70,765)
Deferred compensation................................ (406) (457)
Accumulated other comprehensive income (loss)........ (1,890) (1,890)
-------- --------
Total shareholders' equity....................... 49,482 54,621
-------- --------
Total liabilities and shareholders' equity....... $ 86,932 $ 92,851
======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-27
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited
(U.S. Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------- ----------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATIONS:
Net sales............................... $26,808 $25,842 $50,075 $48,785
Cost of sales........................... 19,939 19,261 37,936 36,193
------- ------- ------- -------
Gross profit.......................... 6,869 6,581 12,139 12,592
Selling, general and administrative
expenses............................... 8,057 8,950 15,760 16,982
Fees related to combination of
interests.............................. 692 -- 692 --
Losses on asset impairments............. -- -- 267 --
------- ------- ------- -------
Loss from operations.................. (1,880) (2,369) (4,580) (4,390)
------- ------- ------- -------
OTHER INCOME (EXPENSE):
Interest expense.......................... (418) (610) (860) (1,239)
Interest income........................... 54 176 217 332
Other, net................................ -- (116) 102 166
------- ------- ------- -------
(364) (550) (541) (741)
------- ------- ------- -------
LOSS BEFORE INCOME TAXES.................. (2,244) (2,919) (5,121) (5,131)
INCOME TAX BENEFIT (EXPENSE).............. (52) (139) (69) 922
------- ------- ------- -------
NET LOSS.................................. $(2,296) $(3,058) $(5,190) $(4,209)
======= ======= ======= =======
COMPREHENSIVE INCOME (LOSS)............... $(2,296) $(3,058) $(5,190) $(4,209)
======= ======= ======= =======
NET LOSS PER COMMON SHARE................. $ (0.11) $ (0.14) $ (0.24) $ (0.20)
======= ======= ======= =======
NET LOSS PER COMMON SHARE--ASSUMING
DILUTION................................. $ (0.11) $ (0.14) $ (0.24) $ (0.20)
======= ======= ======= =======
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (IN THOUSANDS)............... 21,690 21,500 21,690 21,500
======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-28
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Six Months Ended June 30

Unaudited
(U.S. Dollars in thousands)
<TABLE>
<CAPTION>
1999 1998
-------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (5,190) $(4,209)
Adjustments to reconcile net loss to net cash used in
operating activities--
Losses on asset impairments............................. 267 --
Depreciation and amortization........................... 2,474 2,646
Deferred income taxes................................... 17 --
Amortization of deferred compensation................... 51 --
Fees related to combination of interests, net of
payments............................................... 600 --
Changes in current assets and liabilities:
Receivables........................................... (1,665) (971)
Inventories........................................... (818) (843)
Bottles, cases and shells............................. (63) --
Prepaid expenses and other current assets............. (325) (1,358)
Accounts payable...................................... 2,690 2,910
Accrued expenses...................................... (2,202) 595
Other, net.............................................. (178) (273)
-------- -------
Net cash used in operating activities................... (4,342) (1,503)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (6,793) (1,053)
Proceeds from sales of property and equipment............. -- 316
Proceeds from sale of business............................ 700 --
-------- -------
Net cash used in investing activities................... (6,093) ( 737)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of short-term debt............................. -- (266)
Borrowings (repayments) of long-term debt................. (1,159) 282
Repayment of capital lease obligations.................... (23) (632)
-------- -------
Net cash used in financing activities................... (1,182) ( 616)
-------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS..................... (11,617) (2,856)
CASH AND CASH EQUIVALENTS, beginning of period.............. 19,418 13,814
-------- -------
CASH AND CASH EQUIVALENTS, end of period.................... $ 7,801 $10,958
======== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-29
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited
(U.S. Dollars in thousands)

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Pepsi-Cola
Puerto Rico Bottling Company and Subsidiaries (the "Company") have been
prepared in accordance with generally accepted accounting principles for
interim financial information and, in the opinion of management, include all
adjustments (consisting of normal and recurring adjustments) which are
considered necessary for a fair presentation of financial position, results of
operations and cash flows as of June 30, 1999, and for all interim periods
presented. These condensed interim financial statements do not include all of
the financial information and disclosures required by generally accepted
accounting principles for complete financial statements, and should be read in
conjunction with the Company's audited consolidated financial statements and
related notes thereto for the three months ended December 31, 1998. Also, the
results of operations for the interim periods presented may not be indicative
of the results for the entire year.

2. RECLASSIFICATIONS

Certain prior year balances have been reclassified to conform to the current
year presentation.

3. COMBINATION OF INTERESTS

On June 28, 1999, the Company entered into share exchange agreements with
the shareholders of two related party entities, Delta Beverage Group, Inc.
("Delta") and Dakota Beverage Company, Inc. ("Dakota"). The Company, Delta and
Dakota share common ownership and are under the common control of Pohlad
Companies, the principal partner in P-PR Transfer, LLP. Accordingly, the
combination will be accounted for as a merger of entities under common
control. The combination is subject to the approval of the Company's
shareholders.

During the three months ended June 30, 1999, the Company incurred
approximately $1,120 in professional fees and other related costs related to
the combination of interests. Costs of approximately $692 attributable to
combining the common equity interests of the Company, Delta and Dakota have
been expensed, while remaining costs of approximately $428 attributable to the
acquisition of Delta's minority interests under the "purchase" method of
accounting have been capitalized as other long-term assets in the accompanying
consolidated balance sheet.

4. SALE OF BUSINESS

During the three months ended December 31, 1998, the Company agreed to sell
substantially all net assets relating to the bottling, sale and distribution
of potable water under the "Cristalia" tradename to Cristalia Acquisition
Corp. (the "purchaser"), and recorded a $250 non-cash charge for the estimated
impairment of the net assets. The non-cash charge was reflected as a writedown
of Cristalia's long-lived assets in the December 31, 1998 consolidated balance
sheet.

The sale was finalized in April 1999 and resulted in an additional
impairment charge of $267. This charge was recorded during the three months
ended March 31, 1999. The sales price of $1,200 consisted of $700 cash and a
$500 note receivable due in four annual installments beginning March 31, 2000.
The note receivable bears interest at the Treasury Rate, as defined
(approximately 6% as of June 30, 1999), and is unsecured. Current installments
on the note receivable of approximately $121 are included in prepaid expenses
and other current assets in the accompanying consolidated balance sheet.

F-30
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Unaudited
(U.S. Dollars in thousands)

5. LONG-TERM DEBT

The Company maintains a credit agreement with Banco Popular which provides
for a term loan of $25,000, payable with 120 principal payments and a balloon
payment at maturity on April 1, 2007 of $11,800. The credit agreement also
includes a $5,000 revolving credit facility. There were no borrowings
outstanding under the revolving credit facility as of June 30, 1999 or
December 31, 1998. In connection with the sale of the business described in
Note 4, the Company made an additional $650 principal payment on outstanding
long-term debt.

6. RESTRUCTURING CHARGE

In July 1998, a restructuring charge of $1,728 was established under a plan
to improve the Company's performance. The charge included approximately $679
of severance and related charges, $224 of accruals for future payments to exit
activities, including canceling lease agreements, and $825 of asset writedowns
related to the elimination of certain product lines and exiting certain other
business strategies. During 1998, severance payments and payments relating to
other exit activities approximated $456 and $224, respectively. Severance
payments during the six month period ended June 30, 1999 approximated $171.

7. INVENTORIES:

Inventories include the following:

<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
Raw materials.................................... $1,540 $1,074
Finished goods................................... 1,768 1,431
------ ------
$3,308 $2,505
====== ======
</TABLE>

8. INSURANCE PROCEEDS FROM BUSINESS INTERRUPTION LOSSES

In 1998, the Company incurred business interruption and other losses
resulting from Hurricane Georges. As the collection of a claim filed under the
Company's business interruption insurance policy was probable, the Company
recorded $1,655 in anticipated recoveries attributable to business
interruption and other losses. During the six months ended June 30, 1999, the
Company collected the anticipated amount of insurance recoveries.

9. STOCK OPTION PLANS

The Company maintains two stock option plans pursuant to which the Company's
Board of Directors may grant stock options to certain employees and directors
of the Company and its affiliates. One of these stock option plans is not a
qualified plan. Stock options under this plan may have an exercise price below
the stock's fair market value at the date of grant ("below market options").
In accordance with the APB Opinion No. 25, deferred compensation is recorded
to reflect any difference between the exercise price and market value of
shares granted under the plan for below market options, and is expensed over
the vesting period of the options. In 1998, the Company granted below market
options to acquire 452,500 shares of the Company's Class B stock, which vest
over five years. During the six months ended June 30, 1999, deferred
compensation expense of $51 was recorded related to this grant.

F-31
<PAGE>

PEPSI-COLA PUERTO RICO BOTTLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Unaudited
(U.S. Dollars in thousands)

10. EARNINGS PER SHARE

The Company presents basic and diluted earnings per share in accordance with
the provisions of Statement of Financial Accounting Standards No. 128,
"Earnings Per Share." Accordingly, the Company's net loss per common share is
computed by dividing the net loss by the weighted average number of common
shares outstanding. Net loss per common share-assuming dilution does not
include the Company's potentially dilutive securities because to do so would
be antidilutive.

11. SUBSEQUENT EVENT

On July 30, 1999, the Company entered into a contract rights release
agreement with Seven-UP/RC Bottling Company of Puerto Rico, Inc ("Seven-UP")
pursuant to which Seven-UP released its exclusive rights for the production
and distribution of the "Seven-UP," "Sunkist," "Welch's" and "Schweppes"
brands in Puerto Rico. The purchase price consisted of $12,000 cash. The
Company obtained such releases as a precondition to its entry into franchise
agreements with each respective franchisor. On July 30, 1999, the Company
amended their note with Banco Popular de Puerto Rico to $40,000. The
additional increase was used to fund the Seven-UP acquisition.

F-32
<PAGE>

Report of Independent Public Accountants

To Delta Beverage Group, Inc.:

We have audited the accompanying consolidated balance sheets of Delta
Beverage Group, Inc. (a Delaware corporation) and subsidiary as of December
31, 1998 and 1997, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the years in the three year
period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Delta Beverage Group, Inc.
and subsidiary as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three year period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

Arthur Andersen LLP

Memphis, Tennessee,
March 2, 1999.

F-33
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

<TABLE>
<CAPTION>
December 31,
------------------
1998 1997
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 3,818 $ 4,680
Receivables, net of allowance for doubtful accounts of
$597 and $562
Trade................................................... 24,201 19,644
Marketing and advertising............................... 7,407 7,228
Other................................................... 2,715 2,924
Inventories, at cost...................................... 16,149 18,153
Shells, tanks and pallets................................. 6,378 6,340
Prepaid expenses and other................................ 1,783 986
Deferred income taxes..................................... 4,186 5,747
-------- --------
Total current assets.................................. 66,637 65,702
-------- --------
PROPERTY AND EQUIPMENT:
Land...................................................... 4,662 4,639
Buildings and improvements................................ 18,732 16,286
Machinery and equipment................................... 94,621 90,211
-------- --------
118,015 111,136
Less accumulated depreciation and amortization............ (56,476) (55,880)
-------- --------
61,539 55,256
-------- --------
OTHER ASSETS:
Cost of franchises in excess of net assets acquired, net
of accumulated
amortization of $54,300 and $50,652...................... 108,992 112,634
Deferred income taxes..................................... 21,071 19,481
Deferred financing costs and other........................ 13,413 7,841
-------- --------
143,476 139,956
-------- --------
$271,652 $260,914
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and other
liabilities.............................................. $ 240 $ 215
Accounts payable.......................................... 14,038 9,530
Accrued liabilities....................................... 16,274 16,088
-------- --------
Total current liabilities............................. 30,552 25,833
-------- --------
LONG-TERM DEBT AND OTHER LIABILITIES....................... 180,490 170,189
MINORITY INTEREST.......................................... 3,600 4,575
COMMITMENTS AND CONTINGENCIES (Notes 9 and 12)
SHAREHOLDERS' EQUITY:
Preferred stock--
Series AA, $5,000 stated value, 30,000 shares
authorized, 6,158.84 and
5,802.77 shares issued and outstanding................. 30,794 29,014
Common stock--
Voting, $.01 par value, 60,000 shares authorized,
20,301.87 shares issued and outstanding................ -- --
Nonvoting, $.01 par value, 35,000 shares authorized,
32,949.93 shares issued and outstanding................ -- --
Additional paid-in capital................................ 115,765 115,765
Accumulated deficit....................................... (89,547) (84,456)
Deferred compensation..................................... (2) (6)
-------- --------
57,010 60,317
-------- --------
$271,652 $260,914
======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-34
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)

<TABLE>
<CAPTION>
Years Ended
December 31,
----------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
OPERATIONS:
Net sales...................................... $352,085 $323,221 $312,284
Cost of sales.................................. 245,683 216,560 215,085
-------- -------- --------
Gross profit................................. 106,402 106,661 97,199
Selling, general and administrative expenses... 87,019 83,344 76,883
Amortization of franchise costs and other
intangibles................................... 3,648 3,648 3,664
-------- -------- --------
Operating income............................. 15,735 19,669 16,652
-------- -------- --------
OTHER EXPENSES (INCOME):
Interest....................................... 18,770 17,865 15,094
Other, net..................................... 175 (32) 620
-------- -------- --------
18,945 17,833 15,714
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES, MINORITY
INTEREST AND EXTRAORDINARY ITEM................. (3,210) 1,836 938
Income tax provision........................... (436) (2,040) (1,745)
Minority interest, net of taxes................ 335 65 48
-------- -------- --------
LOSS BEFORE EXTRAORDINARY ITEM................... (3,311) (139) (759)
Extraordinary item--loss on extinguishment of
debt, net of income tax benefit of $953....... -- -- (1,519)
-------- -------- --------
NET LOSS......................................... $ (3,311) $ (139) $ (2,278)
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-35
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For The Years Ended December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Common Stock
Preferred Stock ---------------------------------
Series AA Voting Nonvoting
------------------ ---------------- ---------------- Additional
Number Number of Number of Paid-In Accumulated Deferred
of Shares Amount Shares Amount Shares Amount Capital Deficit Compensation Total
--------- -------- --------- ------ --------- ------ ---------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER
31, 1995............ 5,151.18 $ 25,756 20,301.87 $-- 32,949.93 $-- $115,765 $(78,781) $(22) $62,718
Preferred stock
dividends.......... 316.09 1,580 -- -- -- -- -- (1,580) -- --
Recognition of
expense under
deferred
compensation plan.. -- -- -- -- -- -- -- -- 9 9
Net loss............ -- -- -- -- -- -- -- (2,278) -- (2,278)
-------- -------- --------- ---- --------- ---- -------- --------- ---- -------
BALANCE AT DECEMBER
31, 1996............ 5,467.27 27,336 20,301.87 -- 32,949.93 -- 115,765 (82,639) (13) 60,449
Preferred stock
dividends.......... 335.50 1,678 -- -- -- -- -- (1,678) -- --
Recognition of
expense under
deferred
compensation plan.. -- -- -- -- -- -- -- -- 7 7
Net loss............ -- -- -- -- -- -- -- (139) -- (139)
-------- -------- --------- ---- --------- ---- -------- --------- ---- -------
BALANCE AT DECEMBER
31, 1997............ 5,802.77 29,014 20,301.87 -- 32,949.93 -- 115,765 (84,456) (6) 60,317
Preferred stock
dividends.......... 356.07 1,780 -- -- -- -- -- (1,780) -- --
Recognition of
expense under
deferred
compensation plan.. -- -- -- -- -- -- -- -- 4 4
Net loss............ -- -- -- -- -- -- -- (3,311) -- (3,311)
-------- -------- --------- ---- --------- ---- -------- --------- ---- -------
BALANCE AT DECEMBER
31, 1998............ 6,158.84 $ 30,794 20,301.87 $-- 32,949.93 $-- $115,765 $(89,547) $(2) $57,010
======== ======== ========= ==== ========= ==== ======== ========= ==== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-36
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
Years Ended
December 31,
----------------------------
1998 1997 1996
-------- ------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................... $ (3,311) $ (139) $ (2,278)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization................ 13,938 11,441 10,314
Noncash interest on long-term debt........... 5,884 5,514 4,891
Write-off of deferred financing fees......... -- -- 2,472
Change in deferred income taxes.............. (29) 1,670 357
Minority interest expense (income), before
taxes....................................... (367) 70 98
Net expense (payments) under deferred
compensation plans.......................... 325 1,812 (3)
Changes in current assets and liabilities:
Receivables................................ (4,527) (5,444) 3,426
Inventories................................ 2,004 (3,781) (692)
Shells, tanks and pallets.................. (38) (671) (147)
Prepaid expenses and other................. (655) (512) 665
Accounts payable and accrued liabilities... 3,822 198 2,606
-------- ------- ---------
Net cash provided by operating activities.. 17,046 10,158 21,709
-------- ------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... (14,885) (14,988) (8,964)
Payments for exclusive beverage pouring
rights........................................ (7,495) (1,625) (594)
Acquisitions of businesses..................... -- -- (1,130)
Deposit on land lease.......................... (540) -- --
Purchase of franchise rights................... -- -- (1,994)
Proceeds from sales of property and equipment.. 304 388 --
Collections on note receivable................. -- -- 110
Other.......................................... (21) 37 --
-------- ------- ---------
Net cash used in investing activities...... (22,637) (16,188) (12,572)
-------- ------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt....... -- -- 120,000
Retirement of long-term debt................... -- -- (111,250)
Borrowings under revolving line of credit...... 20,500 12,000 --
Payments on revolving line of credit........... (14,900) (12,000) --
Payment of deferred financing costs............ -- (78) (5,946)
Principal payments on long-term debt and other
liabilities................................... (263) (585) (7,703)
Cash distribution to minority interest holder.. (608) (798) --
-------- ------- ---------
Net cash provided by (used in) financing
activities................................ 4,729 (1,461) (4,899)
-------- ------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS.............. (862) (7,491) 4,238
CASH AND CASH EQUIVALENTS, beginning of year..... 4,680 12,171 7,933
-------- ------- ---------
CASH AND CASH EQUIVALENTS, end of year........... $ 3,818 $ 4,680 $ 12,171
======== ======= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-37
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1. ORGANIZATION AND NATURE OF OPERATIONS

Delta Beverage Group, Inc. ("Delta") and the partnership described below
(collectively, the "Company") bottle and distribute beverage products,
principally Pepsi-Cola and Seven-Up products, in the mid-southern United
States. The franchise territories cover portions of Arkansas, Louisiana,
Mississippi, Tennessee and Texas. The partnership also distributes alcoholic
malt beverages in southern Louisiana.

The Company operates under exclusive bottling appointments and franchise
agreements with a number of soft drink concentrate and syrup producers. These
agreements contain provisions regarding the manufacturing, bottling, canning,
distribution and sale of the franchisors' products. The Company also
distributes alcoholic beverages pursuant to distributor agreements that
contain provisions regarding the distribution and sale of alcoholic beverages.

The Pepsi-Cola/Seven-Up Beverage Group of Louisiana (the "Joint Venture") is
a partnership between Delta and Poydras Street Investors, L.L.C. ("Poydras").
Delta's percentage ownership is 62% and Poydras' percentage ownership is 38%.
Beginning January 1, 2000, Delta can purchase the percentage interest of
Poydras at fair market value (as defined).

The Joint Venture's operations and net assets are consolidated with those of
Delta in the accompanying financial statements. All significant intercompany
accounts and transactions have been eliminated in consolidation. Poydras'
share of the Joint Venture's income (loss) and net assets is reflected as a
minority interest in the accompanying consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Accounting Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities, at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The more
significant estimates with regard to these financial statements are disclosed
in Note 12.

Cash and Cash Equivalents

Cash and cash equivalents include temporary investments in short-term
securities with original maturities of three months or less. As of December
31, 1998, the Company had bank overdrafts of $2,054. Bank overdrafts are
included in accounts payable in the accompanying consolidated balance sheet.

Property and Equipment

Property and equipment are stated at cost. Property and equipment renewals
and betterments are capitalized, while maintenance and repair expenditures are
charged to operations currently. Depreciation is computed using the straight-
line method over the estimated useful lives of purchased property and
equipment, or the shorter of the lease terms or the estimated useful lives of
assets acquired under capital lease arrangements. Those lives are as follows:

<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings and improvements.......................................... 20-40
Machinery and equipment............................................. 2-10
</TABLE>

F-38
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

Intangibles and Other Assets

The cost of franchises in excess of net assets acquired is being amortized
on a straight-line basis over 35 to 40 years. The Company, at least annually,
evaluates whether events or circumstances have occurred that may impact the
recoverability of franchise costs. Upon the occurrence of any such event or
circumstance, the Company remeasures the realizable portion of franchise costs
and adjusts the asset to the lesser of its carrying value or fair value.

Costs incurred to obtain long-term financing are deferred and amortized as
adjustments of interest using the effective interest method over the terms of
the related debt.

Amounts paid pursuant to contracts with outside parties providing the
Company with exclusive beverage pouring rights are capitalized as other assets
in the consolidated balance sheets and are amortized over the terms of the
related contracts.

Income Taxes

The Company uses the liability method of accounting for deferred income
taxes. Accordingly, deferred income taxes reflect both the estimated future
tax consequences attributable to operating loss and tax credit carryforwards,
and temporary differences between the Company's assets and liabilities for
financial reporting and income tax purposes, using income tax rates currently
in effect.

Supplemental Cash Flow Information

During 1998, 1997 and 1996, the Company issued additional preferred shares
as payment-in-kind dividends on preferred stock of $1,780, $1,678 and $1,580,
respectively (see Note 8).

Interest paid in cash during 1998, 1997 and 1996 was $12,931, $12,281 and
$12,363, respectively. Income taxes of $371, $247 and $177 were paid in 1998,
1997 and 1996, respectively.

Concentration of Credit Risk

The Company's business activities are concentrated within the mid-southern
United States. However, management believes that there are no significant
concentrations of credit risk with any individual party or groups of parties.

Fair Values of Financial Instruments

The estimated fair values of the Company's financial instruments, except for
fixed rate long-term debt, approximate their carrying amounts. For fixed rate
long-term debt, fair value was estimated based on the current rates offered
for similar obligations and maturities. The estimated fair value of total
long-term debt and other liabilities was $187,000 at December 31, 1998 and
$178,000 at December 31, 1997, compared to a recorded value of $180,000 at
December 31, 1998 and $170,000 at December 31, 1997.

3. ACQUISITIONS

In April 1996, the Joint Venture acquired substantially all of the assets of
Delta Distributing Company, a wholesale distributor of Miller Brewing Company
alcoholic beverages in Raceland, Louisiana. In May 1996, the Joint Venture
acquired the franchise rights from Heineken USA to distribute Heineken beer
products in the greater New Orleans area. The acquisitions were accounted for
as purchases, and the Company's consolidated results of operations include the
results of the acquisitions since their respective purchase dates. The impact
of the 1996 acquisitions on the Company's consolidated results of operations
was not material.

F-39
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

In connection with the 1996 acquisition of Delta Distributing Company and
the 1995 acquisition of the assets of Miller Brands of Greater New Orleans,
Inc. and certain assets of Svoboda Distributing Company, Inc., the Joint
Venture entered into marketing support agreements with Miller Brewing
Company's advertising agency for the general promotion of Miller products in
the greater New Orleans area. The marketing support obligations have been
capitalized and are being amortized over five years.

4. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market and included the following at December 31:

<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
Raw materials............................................ $ 3,116 $ 4,988
Finished goods........................................... 13,033 13,165
-------- -------
$ 16,149 $18,153
======== =======
</TABLE>

5. ACCRUED LIABILITIES

Accrued liabilities consisted of the following at December 31: 1998

<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
Payroll and related benefits............................ $ 1,713 $ 2,841
Income and other taxes.................................. 2,970 2,689
Insurance and related costs............................. 4,632 4,203
Interest................................................ 1,858 1,768
Marketing and advertising costs......................... 4,665 4,180
Other................................................... 436 407
-------- -------
$ 16,274 $16,088
======== =======
</TABLE>

6. INCOME TAXES

At December 31, 1998, the Company had federal income tax net operating loss
carryforwards of $27,074 which had been incurred since the predecessor
business was acquired in March 1988. These net operating loss carryforwards
expire through 2007. In addition, as of December 31, 1998 the Company had
similar net operating loss and tax credit carryforwards of $3,803 and $1,187,
respectively, which were incurred prior to March 1988. Effective at that date,
the predecessor business was acquired in a transaction accounted for as a
purchase. The Internal Revenue Code limits the Company's utilization of the
acquired net operating loss and tax credit carryforwards to $3,000 per year.
These net operating loss and tax credit carryforwards may be used through
2003.

The Company has recognized deferred income tax assets for the estimated
future income tax benefits of the pre- and post-acquisition net operating loss
and tax credit carryforwards that are expected to be realized through the
reduction of future taxable income from operations within the carryforward
periods.

F-40
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

Deferred income taxes were composed of the following at December 31:

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Current deferred income tax assets...................... $ 4,186 $ 5,747
Noncurrent deferred income tax assets................... 27,245 25,109
------- -------
31,431 30,856
Noncurrent deferred income tax liabilities.............. (6,174) (5,628)
------- -------
$25,257 $25,228
======= =======
</TABLE>

The tax effects of significant temporary differences representing deferred
income tax assets and liabilities at December 31, 1998 and 1997 were as
follows:

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Net operating loss and tax credit carryforwards....... $12,398 $14,213
Basis difference in preferred stock and common stock.. 8,020 8,120
Difference in book and tax basis of property and
equipment, deferred financing costs and other
assets............................................... (5,280) (4,590)
Deferred interest on subordinated debt, deferred
compensation, and reserves not currently deductible
for income tax purposes.............................. 10,119 7,485
------- -------
$25,257 $25,228
======= =======
</TABLE>

Income tax provision recorded in the consolidated statements of operations,
net of taxes applicable to minority interest and extraordinary item, was as
follows:

<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Current........................................ $ (465) $ (235) $ (289)
Deferred....................................... 29 (1,805) (1,456)
------- ------- -------
$ (436) $(2,040) $(1,745)
======= ======= =======
</TABLE>

A reconciliation of the income tax provision to the amount computed by
applying the federal statutory tax rate to income or loss before income taxes
was as follows:

<TABLE>
<CAPTION>
1998 1997 1996
----- ------ ------
<S> <C> <C> <C>
Statutory federal income
tax rate............... 34.0 % (34.0)% (34.0)%
State income taxes, net
of federal benefit..... (1.1) (4.5) (4.6)
Franchise cost
amortization........... (39.8) (70.4) (138.0)
Change in effective
state tax rate......... (5.0) -- --
Meals and entertainment
disallowance........... (2.6) (4.9) (8.4)
State tax credits....... 1.8 5.2 --
Other, net.............. (0.9) (2.5) (1.0)
----- ------ ------
(13.6)% (111.1)% (186.0)%
===== ====== ======
</TABLE>

F-41
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

7. LONG-TERM DEBT AND OTHER LIABILITIES

Long-term debt and other liabilities consisted of the following at December
31:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Senior notes payable, 9.75%, due December 16, 2003... $120,000 $120,000
Subordinated notes payable, 11%, due December 23,
2003................................................ 48,573 43,640
Revolving line of credit............................. 5,600 --
Note payable to Poydras, interest at the prime rate
plus 1% (8.75% and 9.50% at December 31, 1998 and
1997, respectively), due December 31, 2007.......... 1,839 1,839
Capital lease obligations, 10.89%, due in monthly
installments through May 1999....................... 96 202
Marketing support obligation, imputed interest at
8.25% to 8.75%, payments due quarterly through June
30, 2000............................................ 331 489
Obligations under deferred compensation plans........ 3,333 3,276
Deferred purchase obligation......................... 900 900
Other long-term debt................................. 58 58
-------- --------
180,730 170,404
Less current maturities.............................. (240) (215)
-------- --------
$180,490 $170,189
======== ========
</TABLE>

In December 1996, the Company placed $120 million of new senior notes and
executed a new $30 million bank revolving line of credit. The net proceeds of
the debt offering were used primarily to retire the Company's prior senior
notes and the amounts outstanding under the Company's prior revolving line of
credit.

In a registration statement filed with the Securities and Exchange
Commission under the Securities Act of 1933 and declared effective on February
12, 1997, the Company exchanged the $120 million senior notes for new $120
million senior notes. The new senior notes retained the same interest rate,
maturity date and ranking as the original senior notes. The Company did not
receive any cash proceeds from this transaction.

The senior notes are general unsecured obligations of the Company and are
senior to all existing and future subordinated indebtedness of the Company.
Interest on the senior notes is payable semi-annually on June 15 and December
15.

The new bank revolving line of credit matures on December 16, 2001 and bears
interest, at Delta's option, at LIBOR or a defined margin over the higher of
(1) the bank's prime rate or (2) the federal funds rate plus 0.5% (the "base
rate"). Borrowings are limited to the sum of 80% of Delta's eligible
receivables and 50% of Delta's eligible inventory. The line of credit includes
a swing line facility of up to $2.5 million. Swing line loans bear interest at
either the base rate or at an otherwise mutually agreed upon rate of interest.
The line of credit also includes a $10 million limit for the issuance of
letters of credit; the letter of credit facility fee is based on the
Eurodollar applicable margin less 0.125%. The agreement also provides for a
fee on the unused commitment ranging from 0.25% to 0.50%. Borrowings under the
line of credit are secured by Delta's accounts receivable and inventory.
Interest and commitment fees are payable quarterly.

As of December 31, 1998, $5,600 was outstanding under the revolving line of
credit, including $2,500 under the swing line facility. The interest rate as
of December 31, 1998 on amounts outstanding under the swing line facility was
6.88%, while the interest rate on remaining amounts outstanding was 8.25%.
There were no borrowings outstanding under the revolving line of credit as of
December 31, 1997.

F-42
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

In connection with the debt placement described above, the Company incurred
financing fees of $4,885. These fees have been capitalized and are being
amortized over the terms of the related debt agreements. Deferred financing
costs relating to debt retired in 1996 of $2,472 were written off. This write-
off, less a related income tax benefit of $953, is reported as an
extraordinary item in the 1996 consolidated statement of operations.

Interest on the subordinated notes is due semi-annually on April 1 and
October 1, and may be paid in cash or, at the option of the Company, by the
issuance of additional subordinated notes ("PIK Notes"). The PIK Notes bear
interest at 11% or 15% depending upon whether the terms of the note agreement
would have permitted the Company to pay any portion of the interest in cash.
The Company issued additional subordinated notes of $4,935 and $4,431 under
this provision in 1998 and 1997, respectively. These additional notes bear
interest at 11% and are included with subordinated notes payable in the
preceding table.

Certain of the subordinated debt holders are also preferred and non-voting
common shareholders of the Company.

The Company's long-term debt agreements require, among other things, the
maintenance of certain minimum financial ratios and financial requirements,
and limit additional indebtedness, sales of assets, investments and capital
expenditures. The agreements also restrict the payment of dividends and limit
capital stock transactions.

In 1995, the Company acquired Miller Brands of Greater New Orleans, Inc. The
purchase price included a $900 deferred obligation payable upon the Miller
business achieving an annual $8,000 gross profit.

Scheduled maturities of long-term debt and other liabilities during the four
years subsequent to 1999 are as follows:

<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
2000.......................................... $ 154
2001.......................................... 5,634
2002.......................................... --
2003.......................................... 168,573
</TABLE>

8. SHAREHOLDERS' EQUITY

Preferred Stock

Authorized preferred stock consists of 30,000 designated Series AA preferred
shares. The Series AA preferred stock does not contain voting rights. Series
AA preferred shareholders receive cumulative dividends at an annual rate of 6%
based on the $5 thousand stated value per share. The rate will increase 2%
annually beginning October 1, 2004, but is limited to a cumulative increase of
8%. Dividends are payable quarterly in cash or in additional shares of Series
AA preferred stock. The Company is obligated to pay the dividends in cash once
the senior notes are retired. The preferred stock dividends for 1998, 1997 and
1996 were paid with additional preferred shares and are included in
shareholders' equity at December 31, 1998, 1997 and 1996. So long as the
Series AA preferred stock is outstanding, the Company cannot declare or pay
dividends on its common stock.

In the event of a liquidation, Series AA preferred shareholders have a $5
thousand per share liquidation preference.

Voting Common Stock

Voting common stock consists of 60,000 authorized shares.

F-43
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

Non-Voting Common Stock

Non-voting common stock consists of 35,000 authorized shares. Should the
Company register its shares in a public offering, the non-voting common stock
may be converted, at the holder's option, into voting common stock. The
conversion rate is one share of non-voting common stock for one share of
voting common stock. The conversion rate is subject to adjustment in certain
instances as defined in the Certificate of Incorporation.

The transfer and sale of shares by and among the shareholders and the
Company are restricted by a Shareholders' Agreement.

9. LEASES

The Company leases certain buildings and other facilities, vehicles and
equipment under agreements expiring through 2010.

Future minimum rental payments under all noncancellable operating leases
with initial or remaining lease terms of one year or more were as follows at
December 31, 1998:

<TABLE>
<CAPTION>
Year Amount
---- -------
<S> <C>
1999........................................... $ 3,983
2000........................................... 3,054
2001........................................... 2,459
2002........................................... 1,785
2003........................................... 1,184
Thereafter..................................... 1,643
-------
$14,108
=======
</TABLE>

Total rent expense during 1998, 1997 and 1996 was $5,130, $4,252 and $3,587,
respectively.

10. RELATED PARTY TRANSACTIONS

The Company has entered into a management agreement with a company (the
"management company") controlled by three individuals who own shares of the
Company's common stock. For services performed pursuant to the agreement, the
Company pays the management company a management fee and a transaction fee.
Management fees of $550, $551 and $533 were paid during 1998, 1997 and 1996,
respectively. The transaction fee is payable upon the acquisition of
additional franchises and is equal to 1.5% of the acquisition cost of such
franchises. Affiliates of the management company also own common stock of the
Company.

In 1998 the Company entered into an accounting services agreement with a
separate entity in which the management company described above owns a
controlling interest. For services performed pursuant to this agreement, the
affiliate pays the Company an accounting services fee. Accounting services
fees of $170 were incurred with this affiliate in 1998. In addition, the
Company sold $5,411 of product at cost to this affiliate in 1998 and as of
December 31, 1998 had a receivable from this affiliate of $255.

11. EMPLOYEE BENEFITS

The Company sponsors a defined contribution employee benefit plan which
covers all eligible full-time employees. Prior to April 1, 1997, employees who
participated in the plan could defer up to 10% of their salaries and wages and
receive matching payments by the Company of 50% of those deferrals, limited to
annual employer contributions of $5 hundred per employee. Effective April 1,
1997, the plan was amended to increase the maximum employee deferral
percentage to 15% and maximum annual employer contributions to $1 thousand per
employee. The Company's contributions were $546 for 1998, $581 for 1997 and
$257 for 1996.

F-44
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

The Company also maintains a nonqualified deferred compensation plan which
is available for certain executives of the Company, as selected by the
Company's board of directors. Executives who participate in the plan may elect
to defer a percentage of their compensation (as defined), subject to
limitations imposed by the Internal Revenue Service and the Company, and are
eligible to receive discretionary contributions from the Company. Employee
deferrals and employer discretionary contributions are held in a trust
restricted from the general assets of the Company. Restricted assets held in
trust, included in other assets in the accompanying consolidated balance
sheets, totaled $1,692 and $1,225 at December 31, 1998 and 1997, respectively.

The Company has a restricted stock bonus plan under which executives and key
employees may be awarded shares of the Company's common stock. All shares
granted contain restrictions on sale or transfer; these restrictions lapse
over an eleven-year period. A maximum of 250 shares of common stock may be
awarded under this plan. At December 31, 1998 and 1997, 22 restricted shares
were outstanding, all of which were held by an officer.

The Company maintains a phantom stock plan available to certain key members
of management. This plan allows eligible executives to participate in the
continued success of the Company based upon the annual appreciation in the
equity value of the Company, as defined. The equivalent of 38,200 shares have
been granted under this plan. Each phantom stock award vests over a three-year
period, and is payable in cash or shares of the Company's common stock upon
the earlier of the participant's death, disability, termination or retirement.
Each participant is subject to a noncompete and nonsolicitation restriction in
consideration of the share equivalent grant. All grants contain restrictions
on assignment or transfer. There was no appreciation in the equity value of
the Company, as defined, in 1996. Effective December 31, 1997, the phantom
stock plan was amended to redefine the beginning equity value upon which
appreciation in the equity value of the Company is determined. As a result, in
1998 and 1997 benefits of $295 and $1,900, respectively, were earned under the
amended plan.

12. CERTAIN SIGNIFICANT ESTIMATES

Self Insurance

The Company maintains self insurance reserves for estimated workers'
compensation and product, automobile and general liability claims. These
estimates are based on historical information along with certain assumptions
about future events. Changes in assumptions for items such as medical costs,
environmental hazards and legal actions, as well as changes in actual
experience, could cause these estimates to change in the near term.

As of December 31, 1998 and 1997, the Company had $8,454 and $9,124 in
outstanding letters of credit to secure the obligations to insurance companies
for workers' compensation and product, automobile and general liability
claims.

Loss Contingencies

Deferred Income Tax Assets

The Company has recorded deferred income tax assets reflecting the expected
future benefits of operating loss and tax credit carryforwards which expire in
varying amounts through 2007 (see Note 6). Realization is dependent on
generating sufficient taxable income prior to expiration of these
carryforwards. Although realization is not assured, management believes that
it is more likely than not that all of the deferred income tax assets will be
realized. The amount of the deferred income tax assets considered realizable,
however, could be reduced in the near term if estimates of future taxable
income during the carryforward periods are reduced.

F-45
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................ $ 3,976 $ 3,818
Receivables, net of allowance for doubtful accounts
of $341 and $597
Trade.............................................. 27,601 24,201
Marketing and advertising.......................... 3,862 7,407
Other.............................................. 2,650 2,715
Inventories, at cost................................. 19,701 16,149
Shells, tanks and pallets............................ 6,216 6,378
Prepaid expenses and other........................... 2,936 1,783
Deferred income taxes................................ 4,628 4,186
--------- --------
Total current assets............................... 71,570 66,637
--------- --------
PROPERTY AND EQUIPMENT:
Land................................................. 4,662 4,662
Buildings and improvements........................... 19,562 18,732
Machinery and equipment.............................. 101,532 94,621
--------- --------
125,756 118,015
Less accumulated depreciation........................ (60,190) (56,476)
--------- --------
65,566 61,539
--------- --------
OTHER ASSETS:
Cost of franchises in excess of net assets acquired,
net of accumulated amortization of
$56,123 and $54,300................................. 107,169 108,992
Deferred income taxes................................ 21,169 21,071
Deferred financing costs and other................... 15,134 13,413
--------- --------
143,472 143,476
--------- --------
$280,608 $271,652
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and other
liabilities......................................... $ 149 $ 240
Accounts payable..................................... 16,087 14,038
Accrued liabilities.................................. 17,433 16,274
--------- --------
Total current liabilities.......................... 33,669 30,552
--------- --------
LONG-TERM DEBT AND OTHER LIABILITIES.................. 186,513 180,490
MINORITY INTEREST..................................... 3,563 3,600
SHAREHOLDERS' EQUITY:
Preferred stock:
Series AA, $5,000 stated value, 30,000 shares
authorized, 6,344.99 and 6,158.84 shares issued
and outstanding................................... 31,725 30,794
Common stock:
Voting, $.01 par value, 60,000 shares authorized,
20,301.87 shares issued and outstanding........... -- --
Nonvoting, $.01 par value, 35,000 shares
authorized, 32,949.93 shares issued
and outstanding................................... -- --
Additional paid-in capital........................... 115,765 115,765
Accumulated deficit.................................. (90,626) (89,547)
Deferred compensation................................ (1) (2)
--------- --------
56,863 57,010
--------- --------
$ 280,608 $271,652
========= ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-46
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited
(Dollars in thousands)

<TABLE>
<CAPTION>
Three Months
Ended Six Months Ended
June 30, June 30,
---------------- ------------------
1999 1998 1999 1998
------- ------- -------- --------
<S> <C> <C> <C> <C>
OPERATIONS:
Net sales............................. $96,487 $96,045 $177,742 $171,778
Cost of sales......................... 65,677 65,867 121,979 119,259
------- ------- -------- --------
Gross profit........................ 30,810 30,178 55,763 52,519
Selling, general and administrative
expenses............................. 22,739 22,369 44,595 43,368
Amortization of franchise costs and
other intangibles.................... 912 912 1,824 1,824
------- ------- -------- --------
Operating income.................... 7,159 6,897 9,344 7,327
------- ------- -------- --------
OTHER EXPENSES:
Interest.............................. 4,908 4,718 9,618 9,358
Other, net............................ 61 3 74 57
------- ------- -------- --------
4,969 4,721 9,692 9,415
------- ------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTEREST...................... 2,190 2,176 (348) (2,088)
Income tax (provision) benefit........ (4,152) (1,430) 129 1,264
Minority interest, net of taxes....... (117) (77) 71 214
------- ------- -------- --------
NET INCOME (LOSS)....................... $(2,079) $ 669 $ (148) $ (610)
======= ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-47
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Six Months Ended June 30

Unaudited
(Dollars in thousands)

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................. $ (148) $ (610)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization.......................... 7,625 6,558
Non-cash interest on long-term debt.................... 3,138 2,879
Change in deferred income taxes........................ (540) (1,076)
Minority interest, before taxes........................ (37) (258)
Net expense under deferred compensation plans.......... 64 529
Changes in current assets and liabilities:
Receivables.......................................... 210 (3,573)
Inventories.......................................... (3,552) 41
Shells, tanks and pallets............................ 162 (50)
Prepaid expenses and other........................... (1,153) (2,058)
Accounts payable and accrued liabilities............. 3,067 5,992
-------- --------
Net cash provided by operating activities............ 8,836 8,374
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures..................................... (8,630) (10,928)
Payments for exclusive beverage pouring rights........... (3,182) (2,164)
Proceeds from sales of property and equipment............ 41 37
Other.................................................... (26) (21)
-------- --------
Net cash used in investing activities................ (11,797) (13,076)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving line of credit................ 13,800 10,000
Payments on revolving line of credit..................... (10,500) (4,500)
Principal payments on long-term debt and other
liabilities............................................. (181) (141)
Cash distribution to minority interest holder............ -- (342)
-------- --------
Net cash provided by financing activities............ 3,119 5,017
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.................... 158 315
CASH AND CASH EQUIVALENTS, beginning of period............. 3,818 4,680
-------- --------
CASH AND CASH EQUIVALENTS, end of period................... $ 3,976 $ 4,995
======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-48
<PAGE>

DELTA BEVERAGE GROUP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Delta
Beverage Group, Inc. ("Delta," a Delaware corporation) and subsidiary
(collectively, the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and, in the
opinion of management, include all adjustments (consisting of normal and
recurring adjustments) which are considered necessary for a fair presentation
of financial position, results of operations and cash flows as of June 30,
1999, and for all interim periods presented. These condensed interim financial
statements do not include all of the financial information and disclosures
required by generally accepted accounting principles for complete financial
statements, and should be read in conjunction with the Company's audited
consolidated financial statements and related notes thereto for the year ended
December 31, 1998. Also, the results of operations for the interim periods
presented may not be indicative of the results for the entire year.

2. PREFERRED STOCK

Authorized preferred stock consists of 30,000 designated Series AA preferred
shares. Series AA preferred shareholders receive cumulative dividends at an
annual rate of 6% based on the $5,000 stated value per share. Dividends are
paid quarterly in cash or in additional shares of Series AA preferred stock.
During the six months ended June 30, 1999, the Company issued additional
preferred shares as payment-in-kind dividends on preferred stock of
approximately $0.9 million. The additional preferred shares are included in
shareholders' equity as of June 30, 1999.

3. LONG-TERM DEBT AND OTHER LIABILITIES

The Company maintains subordinated notes payable due in December 2003.
Interest on the subordinated notes is due semi-annually on April 1 and October
1, and may be paid in cash or, at the option of the Company, by the issuance
of additional subordinated notes ("PIK Notes"). The PIK Notes bear interest at
11% or 15% depending upon whether the terms of the note agreement would have
permitted the Company to pay any portion of the interest in cash. During the
six months ended June 30, 1999, the Company issued additional subordinated
notes of approximately $2.7 million. These additional notes bear interest at
11% and are included in long-term debt and other liabilities in the
accompanying June 30, 1999 consolidated balance sheet.

The Company maintains a $30.0 million bank revolving line of credit which
matures on December 16, 2001. The line of credit includes a swing line
facility of up to $2.5 million. Swing line loans bear interest at either the
base rate (defined below) or an otherwise mutually agreed upon rate of
interest. Interest on remaining amounts outstanding under the line of credit
bear interest, at the Company's option, at LIBOR or a defined margin over the
higher of (1) the bank's prime rate or (2) the federal funds rate plus 0.5%
(the "base rate"). Borrowings are limited to the sum of approximately 80% of
the Company's eligible receivables and approximately 50% of the Company's
eligible inventory. The line of credit also includes a $10.0 million limit for
the issuance of letters of credit. Borrowings under the line are secured by
the Company's accounts receivable and inventory. Borrowings outstanding under
the line of credit approximated $8.9 million as of June 30, 1999, including
$2.5 million under the swing line facility.

4. INVENTORIES

Inventories included the following (in thousands):

<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
Raw materials.................................... $ 4,291 $ 3,116
Finished goods................................... 15,410 13,033
------- -------
$19,701 $16,149
======= =======
</TABLE>

F-49
<PAGE>

Report of Independent Public Accountants

To Dakota Beverage Company, Inc.:

We have audited the accompanying consolidated balance sheets of Dakota
Beverage Company, Inc. (a Minnesota corporation and a wholly owned subsidiary
of Pohlad Companies) and subsidiaries as of December 31, 1998 and 1997, and
the related consolidated statements of operations, shareholder's equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based upon our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dakota Beverage Company,
Inc. and subsidiaries as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

Minneapolis, Minnesota,
March 5, 1999 (except with respect to
the matter discussed in Note 7,
regarding debt covenants, as to which
the date is June 25, 1999)

F-50
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

<TABLE>
<CAPTION>
December 31,
------------------
1998 1997
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 315 $ 7,242
Receivables, net of allowance for doubtful accounts of
$178 and $128--
Trade.................................................. 7,720 7,190
Marketing and advertising.............................. 480 332
Other.................................................. 307 594
Inventories, at cost..................................... 2,471 2,213
Shells, tanks and pallets................................ 313 310
Prepaid expenses and other............................... 1,643 606
-------- --------
Total current assets................................. 13,249 18,487
-------- --------
PROPERTY AND EQUIPMENT:
Land..................................................... 875 1,046
Buildings and improvements............................... 8,515 8,397
Machinery and equipment.................................. 37,692 34,192
-------- --------
47,082 43,635
Less accumulated depreciation............................ (29,741) (27,698)
-------- --------
17,341 15,937
-------- --------
OTHER ASSETS:
Cost of franchises in excess of net assets acquired, net
of accumulated amortization of $4,753 and $4,314........ 12,400 12,704
Investment in affiliated company......................... 1,077 1,083
-------- --------
$ 44,067 $ 48,211
======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
Current maturities of long-term debt and other
liabilities............................................. $ 2,500 $ 2,000
Accounts payable......................................... 2,150 2,431
Accrued liabilities...................................... 4,080 4,284
-------- --------
Total current liabilities............................ 8,730 8,715
-------- --------
LONG-TERM DEBT AND OTHER LIABILITIES....................... 35,750 9,483
COMMITMENTS AND CONTINGENCIES
SHAREHOLDER'S EQUITY (DEFICIT):
Common stock--$1 par value; 1,000 shares authorized,
issued and outstanding.................................. 1 1
Additional paid-in capital............................... 5,011 5,011
Retained earnings........................................ 27,975 25,001
Note receivable from Parent (Note 9)..................... (33,400) --
-------- --------
Total shareholder's equity (deficit)................. (413) 30,013
-------- --------
$ 44,067 $ 48,211
======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-51
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)

<TABLE>
<CAPTION>
Years Ended December
31,
-------------------------
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
OPERATIONS:
Net sales......................................... $97,360 $94,899 $89,485
Cost of sales..................................... 57,020 53,949 52,902
------- ------- -------
Gross profit.................................... 40,340 40,950 36,583
Selling, general and administrative expenses...... 24,497 23,968 20,833
Amortization of franchise costs and other
intangibles...................................... 439 438 437
------- ------- -------
Operating income................................ 15,404 16,544 15,313
------- ------- -------
OTHER EXPENSES (INCOME):
Interest.......................................... 573 726 885
Other, net........................................ (22) 69 (81)
------- ------- -------
Total other expenses............................ 551 795 804
------- ------- -------
INCOME BEFORE INCOME TAXES.......................... 14,853 15,749 14,509
Income tax provision (benefit) (Notes 2 and 6)...... -- (2,462) 5,618
------- ------- -------
NET INCOME.......................................... $14,853 $18,211 $ 8,891
======= ======= =======
UNAUDITED PRO FORMA NET INCOME (Notes 2 and 6):
INCOME BEFORE INCOME TAXES........................ $14,853 $15,749 $14,509
PRO FORMA INCOME TAX PROVISION (Note 6)........... 5,592 6,141 5,618
------- ------- -------
PRO FORMA NET INCOME (Note 6)..................... $ 9,261 $ 9,608 $ 8,891
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-52
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY (Deficit)
(Dollars in thousands)

<TABLE>
<CAPTION>
Common Stock
----------------
Additional Note
Number Paid-In Retained Receivable
of Shares Amount Capital Earnings From Parent Total
--------- ------ ---------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31,
1995................... 1,000 $ 1 $5,011 $13,152 $ -- $ 18,164
Net income............ -- -- -- 8,891 -- 8,891
Dividends............. -- -- -- (4,354) -- (4,354)
----- --- ------ ------- -------- --------
BALANCE AT DECEMBER 31,
1996................... 1,000 1 5,011 17,689 -- 22,701
Net income............ -- -- -- 18,211 -- 18,211
Tax distributions
(Note 9)............. -- -- -- (6,139) -- (6,139)
Dividends............. -- -- -- (4,760) -- (4,760)
----- --- ------ ------- -------- --------
BALANCE AT DECEMBER 31,
1997................... 1,000 1 5,011 25,001 -- 30,013
Net income............ -- -- -- 14,853 -- 14,853
Tax distributions
(Note 9)............. -- -- -- (6,523) -- (6,523)
Dividends............. -- -- -- (5,356) -- (5,356)
Note receivable from
Parent............... -- -- -- -- (33,400) (33,400)
----- --- ------ ------- -------- --------
BALANCE AT DECEMBER 31,
1998................... 1,000 $ 1 $5,011 $27,975 $(33,400) $ (413)
===== === ====== ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-53
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...................................... $ 14,853 $ 18,211 $ 8,891
Adjustments to reconcile net income to net cash
provided by
operating activities--
Depreciation and amortization................. 3,403 3,098 3,093
Change in deferred income taxes............... -- (2,462) (284)
Change in current assets and liabilities:
Receivables................................. (391) (1,027) (201)
Inventories, net............................ (258) (136) 85
Shells, tanks and pallets................... (3) 5 (33)
Prepaid expenses and other assets........... (1,037) (153) (235)
Accounts payable, accrued liabilities and
other liabilities.......................... (718) 1,195 1,390
-------- -------- -------
Net cash provided by operating
activities............................... 15,849 18,731 12,706
-------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and equipment, net........ (4,544) (5,401) (4,844)
Proceeds from sales of property and equipment... 213 359 421
Acquisition of business......................... (166) (77) --
-------- -------- -------
Net cash used in investing activities..... (4,497) (5,119) (4,423)
-------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of tax distribution..................... (6,523) (6,139) --
Payment of dividends............................ (5,356) (4,760) (3,957)
Repayment of long-term debt and other........... (8,217) (2,000) (2,000)
Borrowing on long-term debt and other........... 35,217 -- --
Note receivable for advances to Parent.......... (33,400) -- --
-------- -------- -------
Net cash used in financing activities..... (18,279) (12,899) (5,957)
-------- -------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS........... (6,927) 713 2,326
CASH AND CASH EQUIVALENTS, beginning of year...... 7,242 6,529 4,203
-------- -------- -------
CASH AND CASH EQUIVALENTS, end of year............ $ 315 $ 7,242 $ 6,529
======== ======== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-54
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)

1. ORGANIZATION

Organization and Principles of Consolidation

Dakota Beverage Company, Inc. (Dakota or the Company) and Subsidiaries is a
wholly owned subsidiary of Pohlad Companies (the Parent). The Company bottles
and distributes beverage products, principally Pepsi-Cola and Dr.
Pepper/Seven-Up products in the north-central United States. The franchise
territories cover portions of North and South Dakota, Minnesota and Iowa.
Additionally, the Company owns and operates a full-line vending subsidiary in
Sioux Falls, South Dakota.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Accounting Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The more
significant estimates with regard to these financial statements are disclosed
in Note 11.

Cash and Cash Equivalents

Cash and cash equivalents include temporary investments in short-term
securities with original maturities of three months or less.

Property and Equipment

Property and equipment are stated at cost. Property and equipment renewals
and betterments are capitalized, while maintenance and repair expenditures are
charged to operations currently. Depreciation is computed using the straight-
line method over the estimated useful lives of purchased property and
equipment. Those lives are as follows:

<TABLE>
<CAPTION>
Estimated
Useful Life
-----------
<S> <C>
Buildings and improvements.................................... 7-33 years
Machinery and equipment....................................... 3-12 years
</TABLE>

Intangibles and Other Assets

Costs incurred to obtain long-term financing are deferred and amortized as
adjustments of interest using the effective interest method over the term of
the related debt.

F-55
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

Income Taxes

Effective January 1, 1997, the Company elected S corporation status under
the applicable Internal Revenue Code and Minnesota Income Tax Act sections,
whereby the taxable income and any available tax credits of the Company are
included in the income tax returns of its shareholder.

Supplemental Cash Flow Information

Interest paid in cash during 1998, 1997 and 1996 was $1,511, $906 and
$1,074, respectively. There were no income taxes paid in 1998 or 1997. Income
taxes of $5,346 were paid in 1996.

Concentration of Credit Risk

The Company's business activities are concentrated within the north-central
United States. However, management believes that there are no significant
concentrations of credit risk with any individual party or groups of parties.

Fair Value of Financial Instruments

The estimated fair values of the Company's financial instruments, except for
fixed rate long-term debt, approximate their carrying amounts. For fixed rate
long-term debt, fair value was estimated based on the current rates offered
for similar obligations and maturities. The estimated fair value of total
long-term debt and other liabilities was $38,861 at December 31, 1998 and
$11,483 at December 31, 1997, compared to a recorded value of $38,250 at
December 31, 1998 and $11,483 at December 31, 1997.

3. ACQUISITIONS

On March 31, 1999, the Company purchased all of the outstanding stock of S&R
Vending, a full-line vending operation based in Wahpeton, North Dakota. The
transaction has been accounted for under the purchase method of accounting,
with the excess purchase price over the book value of assets being assigned to
goodwill. Pro forma financial information is not presented as the aggregate
impact of the acquisition is immaterial to the Company.

4. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market and include the following at December 31:

<TABLE>
<CAPTION>
1998 1997
------- ------
<S> <C> <C>
Raw materials.............................................. $ 228 $ 208
Finished goods............................................. 2,243 2,005
------- ------
$ 2,471 $2,213
======= ======
</TABLE>

F-56
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

5. ACCRUED LIABILITIES:

Accrued liabilities consisted of the following at December 31:

<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Payroll and related benefits............................... $ 919 $1,400
Income tax dividend........................................ 790 996
Marketing and advertising.................................. 1,428 830
Insurance and other related costs.......................... 186 442
Interest................................................... 368 131
Other...................................................... 389 485
------ ------
$4,080 $4,284
====== ======
</TABLE>

6. INCOME TAXES:

As part of the change in its tax status, the Company has eliminated the
effect of all basis differences as a benefit for income taxes. The effect of
those differences at January 1, 1997 was recorded in the consolidated
statements of operations as a benefit for income taxes. As the Company is no
longer required to pay corporate income taxes, no provision for income taxes
has been included in the accompanying consolidated statements of operations
subsequent to January 1, 1997.

Deferred income taxes were composed of the following at December 31, 1996
(prior to the change in tax status):

<TABLE>
<S> <C>
Current deferred income tax assets................................ $ 488
Noncurrent deferred income tax liabilities........................ $3,434
</TABLE>

The income tax provision recorded in the consolidated statements of
operations, was as follows:

<TABLE>
<CAPTION>
1997 1996
------- ------
<S> <C> <C>
Current.................................................. $ -- $5,902
Deferred................................................. (2,462) (284)
------- ------
$(2,462) $5,618
======= ======
</TABLE>

A reconciliation of the income tax provision to the amount computed by
applying the federal statutory tax rate to income or loss before income taxes
was as follows for the period in which the Company was a C Corporation:

<TABLE>
<CAPTION>
1996
-----
<S> <C>
Statutory federal income tax rate................................. (34.0)%
State income taxes, net of federal benefit........................ (6.9)
Franchise cost amortization....................................... 1.4
Other, net........................................................ .8
-----
(38.7)%
=====
</TABLE>

F-57
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

The unaudited pro forma income tax expense shown on the statement of
operations is presented assuming the Company had been a C corporation for the
years ended December 31, 1998 and 1997, using effective tax rates of 37.6% and
39.0%, respectively.

7. LONG-TERM DEBT AND OTHER LIABILITIES:

Long-term debt and other liabilities consisted of the following at December
31:

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Senior notes payable--
7.39%, due February 2003.............................. $ 8,450 $10,450
6.97%, due August 2008................................ 20,000 --
Term loan, 6.35%, due February 2004..................... 5,000 --
Line of credit.......................................... 4,000 --
Other long-term obligations............................. 800 1,033
Less--Current maturities................................ (2,500) (2,000)
------- -------
$35,750 $ 9,483
======= =======
</TABLE>

In 1993, the Company placed $20,000 in senior secured notes (the 1993 Senior
Notes) which bear interest at 7.39%, payable quarterly. As of December 31,
1998, the remaining principal balance on the 1993 Senior Notes is due in
varying semiannual installments through February 2003.

On July 15, 1998, the Company entered into a private placement offering for
$20,000 in additional senior secured notes (the 1998 Senior Notes) due
semiannually beginning February 1, 2002, which bear interest at a rate of
6.97%.

Under the terms of the 1993 and 1998 Senior Notes agreements, the Company's
tangible and intangible property is pledged as collateral. Additionally, the
Company is required to comply with certain requirements as defined in each of
the agreements. Effective June 25, 1999, the Company's Senior Notes agreements
were amended to revise certain financial covenants contained in the
agreements. The Company was in compliance with all covenants or had obtained
waivers for events of non-compliance as of December 31, 1998.

On July 15, 1998, the Company entered into an agreement with a bank for
$5,000 of term debt which bears interest at a rate of LIBOR plus 1.1% (6.2% at
December 31, 1998). The Company also has the option of locking in interest
rates for short periods of time (60 to 90 days), and has exercised this option
by locking into a rate of 6.35% as of December 31, 1998. The Company will make
semiannual payments on the term note commencing August 1, 1999.

The Company has a $25,000 line of credit with a bank. The line of credit
bears interest on outstanding advances, payable monthly, at LIBOR plus 1.1%
(6.2% at December 31, 1998). Additionally, the Company is required to pay a
fee of .125% per year on the unused portion of the line of credit. At December
31, 1998, there were $4,000 of outstanding borrowings on the line of credit.
There were no outstanding borrowings as of December 31, 1997. Fees of $24 and
$25 for 1998 and 1997, respectively, were paid on the unused portion, which is
included in interest expense on the accompanying consolidated statements of
operations.

F-58
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

Scheduled maturities of the long-term debt and other liabilities at December
31, 1998 are as follows:

<TABLE>
<S> <C>
1999........................................... $ 2,500
2000........................................... 3,000
2001........................................... 3,000
2002........................................... 3,700
2003........................................... 3,750
Thereafter..................................... 22,300
-------
$38,250
=======

8. LEASES

The Company is obligated for the following future minimum rentals under
noncancellable operating leases as of December 31, 1998:

1999........................................... $ 517
2000........................................... 501
2001........................................... 426
2002........................................... 364
2003........................................... 265
Thereafter..................................... 352
-------
$ 2,425
=======
</TABLE>

Rent expense was $681, $548 and $582 for 1998, 1997 and 1996, respectively.

9. RELATED PARTY TRANSACTIONS

The Company has entered into a management agreement with its Parent. For
services performed pursuant to the agreement, the Company pays the management
company a management fee and a transaction fee. Management fees of $2,577,
$2,343 and $2,130 were paid in 1998, 1997 and 1996, respectively. The
management fee is calculated based on the prior year fees plus an additional
10%. Affiliates of the management company also own common stock of the
Company.

During 1998, the Company advanced $33,400 in cash to its Parent in exchange
for a note receivable. The note receivable is due in annual principal
installments of $500 beginning December 31, 2001, with a balloon payment of
$29,900 due on June 30, 2008. The note receivable bears interest at 7%, and
all interest payments on the note have been made through December 31, 1998. It
is the Parent's intent to have the note forgiven by the Company and, as such,
the note has been reflected as a component of stockholder's equity (deficit)
on the accompanying consolidated balance sheet.

In conjunction with its change in tax status, as discussed in Note 1, the
Company has declared monthly tax distributions in the form of a dividend to
its Parent in amounts equal to the income or other tax liabilities incurred by
its Parent at the highest incremental rate, inclusive of state, local and
federal taxes, totaling $6,523 and $6,139 in 1998 and 1997, respectively.
These amounts are included in tax distributions on the accompanying
consolidated statements of shareholder's equity (deficit). These tax
distributions are calculated based on approximately 45% of net income and are
payable monthly.

The Company also declares and pays a quarterly dividend to its Parent for
50% of net income, net of tax distributions. This dividend is included in the
accompanying consolidated statements of shareholder's equity (deficit).

F-59
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except per share data)

The Company has an interest in Wis-Pak, in which the Company purchases
substantially all of its bottled and canned beverages from Wis-Pak. Amounts
related to unsettled transactions are recorded in the receivable/payable
accounts in the accompanying consolidated balance sheets. The Company's
investment in Wis-Pak is accounted for under the cost method.

10. EMPLOYEE BENEFITS

The Company sponsors a defined contribution employee benefit plan which
covers all eligible full-time employees. Employees who participate in the plan
can defer up to 15% of their salaries and wages and receive matching payments
by the Company of up to 4%, up to a maximum of 50% of the employee's total
contribution. The Company's contributions were $297 for 1998, $267 for 1997
and $236 for 1996.

The Company maintains a phantom stock plan available to certain key members
of management. This plan allows eligible executives to participate in the
continued success of the Company based upon the annual appreciation in the
equity value of the Company, as defined. The equivalent of 9,796 shares have
been granted under this plan. Each phantom stock award vests over a three-year
period, and is payable in cash or shares of the Company's common stock upon
the earlier of the participant's death, disability, termination or retirement.
Each participant is subject to a noncompete and nonsolicitation restriction in
consideration of the share-equivalent grant. All grants contain restrictions
on assignment or transfer. As of December 31, 1998 and 1997, benefits of $800
and $683, respectively, were earned under the plan.

11. CERTAIN SIGNIFICANT ESTIMATES

Self-Insurance

The Company maintains self-insurance reserves for estimated workers'
compensation and healthcare. These estimates are based on historical
information along with certain assumptions about future events. Changes in
assumptions for items such as medical costs, environmental hazards and legal
actions, as well as changes in actual experience, could cause these estimates
to change in the near term.

Loss Contingencies

F-60
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)

<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................... $ 646 $ 315
Receivables, net of allowance for doubtful accounts
of $92 and $178
Trade............................................. 9,106 7,720
Marketing and advertising......................... 340 480
Other............................................. 575 307
Inventories, at cost................................ 3,143 2,471
Shells, tanks and pallets........................... 401 313
Prepaid expenses and other.......................... 1,638 1,643
------- -------
Total current assets............................ 15,849 13,249
------- -------
PROPERTY AND EQUIPMENT:
Land................................................ 877 875
Buildings and improvements.......................... 8,589 8,515
Machinery and equipment............................. 41,406 37,692
------- -------
50,872 47,082
Less accumulated depreciation....................... (31,228) (29,741)
------- -------
19,644 17,341
------- -------
OTHER ASSETS
Cost of franchises in excess of net assets acquired,
net of accumulated amortization of $4,972 and
$4,753............................................. 12,819 12,400
Investment in affiliated company and other assets... 1,563 1,077
------- -------
$49,875 $44,067
======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and other
liabilities........................................ $ 2,500 $ 2,500
Accounts payable.................................... 3,398 2,150
Accrued liabilities................................. 6,484 4,080
------- -------
Total current liabilities....................... 12,382 8,730
------- -------
LONG-TERM DEBT AND OTHER LIABILITIES.................. 37,186 35,750
COMMITMENTS AND CONTINGENCIES
SHAREHOLDER'S EQUITY (DEFICIT):
Common stock--$1 par value; 1,000 shares authorized,
issued and outstanding............................. 1 1
Additional paid-in capital.......................... 5,011 5,011
Retained earnings................................... 28,695 27,975
Note receivable from parent......................... (33,400) (33,400)
------- -------
Total shareholder's equity (deficit)............ 307 (413)
------- -------
$49,875 $44,067
======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-61
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited
(Dollars in thousands)

<TABLE>
<CAPTION>
Six Months
Three Months Ended
Ended June 30, June 30,
--------------- ---------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATIONS:
Net sales.................................... $26,892 $26,439 $48,735 $47,571
Cost of sales................................ 15,341 15,746 27,791 28,085
------- ------- ------- -------
Gross profit............................... 11,551 10,693 20,944 19,486
Selling, general and administrative
expenses.................................... 6,688 5,941 13,048 11,922
Amortization of franchise costs and other
intangibles................................. 109 109 219 219
Fees related to combination of interests..... 1,349 -- 1,349 --
------- ------- ------- -------
Operating income........................... 3,405 4,643 6,328 7,345
------- ------- ------- -------
OTHER EXPENSES:
Interest, net................................ 113 158 225 292
Other, net................................... 24 117 55 190
------- ------- ------- -------
Total other expenses....................... 137 275 280 482
------- ------- ------- -------
INCOME BEFORE INCOME TAXES..................... 3,268 4,368 6,048 6,863
INCOME TAX PROVISION........................... -- -- -- --
------- ------- ------- -------
NET INCOME..................................... $ 3,268 $ 4,368 $ 6,048 $ 6,863
======= ======= ======= =======
UNAUDITED PRO FORMA NET INCOME:
INCOME BEFORE INCOME TAXES................... $ 3,268 $ 4,368 $ 6,048 $ 6,863
PRO FORMA INCOME TAX PROVISION............... 1,300 1,700 2,600 2,700
------- ------- ------- -------
PRO FORMA NET INCOME....................... $ 1,968 $ 2,668 $ 3,448 $ 4,163
======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-62
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Six Months Ended June 30

Unaudited
(Dollars in thousands)

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................. $ 6,048 $ 6,863
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization............................ 1,981 1,728
Fees related to combination of interests................. 1,349 --
Changes in current assets and liabilities:
Receivables............................................ (1,514) (1,417)
Inventories, net....................................... (672) (729)
Shells, tanks and pallets.............................. (88) (45)
Prepaid expenses and other assets...................... 5 (86)
Accounts payable, accrued liabilities and other........ 1,813 3
------- -------
Net cash provided by operating activities.............. 8,922 6,317
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and equipment........................ (4,154) (3,853)
Proceeds from sale of property and equipment............... 65 295
Investment in franchise.................................... (610) 18
------- -------
Net cash used in investing activities.................. (4,699) (3,540)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends....................................... (2,000) (3,253)
Payment of tax distribution................................ (3,328) (3,089)
Borrowings under revolving line of credit.................. 6,475 --
Payments on under revolving line of credit................. (4,030) --
Principal payments on long-term debt and other
liabilities............................................... (1,009) (1,000)
------- -------
Net cash used in financing activities.................. (3,892) (7,342)
------- -------
Net increase (decrease) in cash and cash equivalents... 331 (4,565)
CASH AND CASH EQUIVALENTS, beginning of period............... 315 7,242
------- -------
CASH AND CASH EQUIVALENTS, end of period..................... $ 646 $ 2,677
======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-63
<PAGE>

DAKOTA BEVERAGE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Dakota
Beverage Company, Inc. (Dakota or the Company), a Minnesota corporation and
subsidiaries have been prepared in accordance with generally accepted
accounting principles for interim financial information and, in the opinion of
management, include all adjustments (consisting of normal and recurring
adjustments) which are considered necessary for a fair presentation of
financial position, results of operations and cash flows as of June 30, 1999,
and for all interim periods presented. These condensed interim financial
statements do not include all of the financial information and disclosures
required by generally accepted accounting principles for complete financial
statements, and should be read in conjunction with the Company's audited
consolidated financial statements and related notes thereto for the year ended
December 31, 1998. Also, the results of operations for the interim periods
presented may not be indicative of the results for the entire year.

2. FEES RELATED TO COMBINATION OF INTERESTS

On June 28, 1999, the shareholder(s) of Dakota and Delta Beverage Group,
Inc. ("Delta") entered into share exchange agreements with Pepsi-Cola Puerto
Rico Bottling Company ("PPR"). Dakota, Delta and PPR share common ownership
and are under the common control of the Pohlad Companies. Accordingly, the
combination will be accounted for as a merger of entities under common
control. The combination is subject to the approval of PPR's shareholders.
During the three months ended June 30, 1999, Dakota expensed approximately
$1.3 million in professional fees and other related costs attributable to
combining the common equity interests of Dakota, Delta and PPR.

3. ACQUISITION

On March 1, 1999, the Company purchased all of the outstanding stock of S&R
Vending, a full-line vending operation based in Wahpeton, North Dakota. The
transaction has been accounted for under the purchase method of accounting
with the excess purchase price over the book value of assets being assigned to
goodwill. Pro forma financial information is not presented as the aggregate
impact of the acquisition is immaterial to the Company.

4. LONG TERM DEBT AND OTHER LIABILITIES

During the first quarter of 1999, the Company borrowed an additional $2.4
million on the line of credit, which bears interest on outstanding advances,
payable monthly, at LIBOR plus 1.1% (6.75% at June 30, 1999). Borrowings
outstanding on the line of credit approximated $6.5 million as of June 30,
1999.

5. INVENTORIES

Inventories included the following (in thousands):

<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
Raw materials.................................... $ 195 $ 228
Finished goods................................... 2,948 2,243
------ ------
$3,143 $2,471
====== ======
</TABLE>
6. SUBSEQUENT EVENT

On August 31, 1999, the Company purchased all of the assets of C&C Vending
Company, a full-line vending operation based in Aberdeen, South Dakota.

F-64
<PAGE>

APPENDIX A
DELTA EXCHANGE AGREEMENT

June 28, 1999

A-1
<PAGE>

DELTA EXCHANGE AGREEMENT

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I--THE EXCHANGE.................................................. A-5
Section 1.1 The Exchange............................................ A-5
Section 1.2 Exchange Procedures..................................... A-6
Section 1.3 Transfer Taxes.......................................... A-6
Section 1.4 Lost Certificates....................................... A-6
Section 1.5 Closing................................................. A-6

ARTICLE II--REPRESENTATIONS AND WARRANTIES OF PPR........................ A-6
Section 2.1 Organization, Standing and Power........................ A-7
Section 2.2 Capital Structure....................................... A-7
Section 2.3 Authority............................................... A-8
Section 2.4 Consents and Approvals; No Violation.................... A-8
Section 2.5 SEC Documents and Other Reports......................... A-9
Section 2.6 Absence of Certain Changes.............................. A-9
Section 2.7 Permits; Compliance and Contracts....................... A-10
Section 2.8 Tax Matters............................................. A-11
Section 2.9 Actions and Proceedings................................. A-11
Section 2.10 Certain Agreements...................................... A-12
Section 2.11 Employee Benefit Matters................................ A-12
Section 2.12 Compliance with Environmental Laws...................... A-13
Section 2.13 Labor Matters........................................... A-14
Section 2.14 Intellectual Property................................... A-14
Section 2.15 Title to Assets; Insurance.............................. A-15
Section 2.16 Real Property........................................... A-15
Section 2.17 Title Insurance......................................... A-16
Section 2.18 Zoning.................................................. A-16
Section 2.19 Brokers................................................. A-16
Section 2.20 Relationships........................................... A-16
Section 2.21 Compliance with Quality Standards....................... A-17
Section 2.22 Year 2000 Compliance.................................... A-17
Section 2.23 Delaware Business Combination Statute................... A-17
Section 2.24 Disclosure.............................................. A-17

ARTICLE III--REPRESENTATIONS AND WARRANTIES OF DELTA..................... A-17
Section 3.1 Organization, Standing and Power........................ A-17
Section 3.2 Capital Structure....................................... A-17
Section 3.3 Authority............................................... A-18
Section 3.4 Consents and Approvals; No Violation.................... A-18
Section 3.5 SEC Documents and Other Reports......................... A-19
Section 3.6 Absence of Certain Changes or Events.................... A-19
Section 3.7 Permits; Compliance and Contracts....................... A-20
Section 3.8 Tax Matters............................................. A-21
Section 3.9 Actions and Proceedings................................. A-21
Section 3.10 Certain Agreements...................................... A-22
Section 3.11 Employee Benefit Matters................................ A-22
Section 3.12 Compliance with Environmental Laws...................... A-23
Section 3.13 Indebtedness............................................ A-24
Section 3.14 Labor Matters........................................... A-24
</TABLE>

A-2
<PAGE>

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 3.15 Intellectual Property.................................. A-24
Section 3.16 Title to Assets; Insurance............................. A-24
Section 3.17 Real Property.......................................... A-24
Section 3.18 Title Insurance........................................ A-26
Section 3.19 Zoning................................................. A-26
Section 3.20 Brokers................................................ A-26
Section 3.21 Relationships.......................................... A-26
Section 3.22 Compliance with Quality Standards...................... A-26
Section 3.23 Year 2000 Compliance................................... A-26
Section 3.24 Disclosure............................................. A-27

ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF THE DELTA STOCKHOLDERS.. A-27
Section 4.1 Title; Authority....................................... A-27
Section 4.2 No Breach.............................................. A-27
Section 4.3 No Consents............................................ A-27
Section 4.4 Entire Interest........................................ A-27
Section 4.5 Accredited Investor Status; PPR Information............ A-27
Section 4.6 Unregistered Securities; Investment Intent............. A-28
Section 4.7 Restrictions on Transfer............................... A-28

ARTICLE V -- COVENANTS RELATING TO CONDUCT OF BUSINESS.................. A-28
Section 5.1 Actions by PPR......................................... A-28
Section 5.2 Actions by Delta....................................... A-29

ARTICLE VI -- ADDITIONAL AGREEMENTS..................................... A-31
Section 6.1 PPR Stockholder Meeting................................ A-31
Preparation of the Registration Statement and the Proxy
Section 6.2 Statement.............................................. A-31
Section 6.3 Access to Information and Properties................... A-34
Section 6.4 New Credit Facility.................................... A-35
Section 6.5 [This section intentionally left blank]................ A-35
Section 6.6 NYSE Listing........................................... A-35
Section 6.7 Fees and Expenses...................................... A-35
Section 6.8 Delta Senior Noteholders............................... A-35
Section 6.9 Reasonable Best Efforts to Consummate the Exchange..... A-35
Section 6.10 Public Announcements................................... A-36
Section 6.11 State Takeover Laws.................................... A-36
Section 6.12 Indemnification........................................ A-36
Section 6.13 Notification of Certain Matters........................ A-36
Section 6.14 Transfer Taxes......................................... A-36
Section 6.15 Treatment of Delta Phantom Stock Plan Participants..... A-36
Section 6.16 Title Commitments...................................... A-36
Section 6.17 Delta Preferred Stock Dividends........................ A-37
Section 6.18 Independent Directors.................................. A-37
Section 6.19 Transactions with Affiliates........................... A-37
Section 6.20 Lock-Up Agreement...................................... A-37

ARTICLE VII -- CONDITIONS PRECEDENT TO CLOSING.......................... A-38
Conditions to Each Party's Obligation to Effect the
Section 7.1 Exchange............................................... A-38
Conditions to Obligation of the Delta Stockholders to
Section 7.2 Effect the Exchange.................................... A-38
Conditions to Obligations of PPR to Effect the
Section 7.3 Exchange............................................... A-39
</TABLE>

A-3
<PAGE>

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE VIII -- TERMINATION, AMENDMENT AND WAIVER....................... A-40
Section 8.1 Termination............................................ A-40
Section 8.2 Effect of Termination.................................. A-41
Section 8.3 Amendment.............................................. A-41
Section 8.4 Waiver................................................. A-41

ARTICLE IX -- GENERAL PROVISIONS........................................ A-41
<CAPTION>
Non-Survival of Representations, Warranties and
Section 9.1 Agreements.............................................. A-41
<C> <S> <C>
Section 9.2 Notices................................................ A-42
Section 9.3 Interpretation......................................... A-42
Section 9.4 Counterparts........................................... A-42
Section 9.5 Entire Agreement; No Third-Party Beneficiaries......... A-42
Section 9.6 Governing Law.......................................... A-43
Section 9.7 Assignment............................................. A-43
Section 9.8 Severability........................................... A-43
Section 9.9 Enforcement of this Agreement.......................... A-43
Section 9.10 Rule of Construction................................... A-43
Section 9.11 Effect of Execution.................................... A-43
Rights Under Amended and Restated Shareholder's
Section 9.12 Agreement.............................................. A-44
Section 9.13 Termination of Amended and Restated Co-Sale Agreement.. A-44
Section 9.14 Amendment to Delta's Certificate of Incorporation...... A-44

Signatures.............................................................. A-45
</TABLE>

<TABLE>
<S> <C>
EXHIBITS
Exhibit A -- Voting Agreement
Exhibit B -- Lock-Up Agreement
Exhibit C -- Registration Rights Agreement
Exhibit D -- Names and Addresses of Delta Stockholders
</TABLE>

A-4
<PAGE>

DELTA EXCHANGE AGREEMENT

EXCHANGE AGREEMENT, dated as of June 28, 1999 (this "Agreement"), among
PEPSI-COLA PUERTO RICO BOTTLING COMPANY, a Delaware corporation ("PPR"), DELTA
BEVERAGE GROUP, INC., a Delaware corporation ("Delta"), and the stockholders
of Delta listed on the signature pages hereto (the "Delta Stockholders").

WITNESSETH:

WHEREAS, the Board of Directors of Delta has determined that the
transactions described in this Agreement are in Delta's best interests and,
accordingly, have authorized Delta to enter into this Agreement; and

WHEREAS, a special committee of the Board of Directors of PPR (the "PPR
Special Committee") and the Board of Directors of PPR have determined that the
transactions described in this Agreement are in PPR's and its stockholders'
respective best interests and, accordingly, have authorized PPR to enter into
this Agreement and agreed to recommend to its stockholders that this Agreement
and the transactions contemplated hereby be approved by PPR's stockholders;
and

WHEREAS, this Agreement provides for the issuance by PPR of shares of its
Class B common stock par value $.01 per share (the "PPR Class B Common Stock")
and for those holders of issued and outstanding shares of Delta voting common
stock and Delta nonvoting common stock (collectively, the "Delta Stock")
identified on Schedule 1 hereto to exchange their shares of Delta Stock for
PPR Class B Common Stock in the manner set forth herein (the "Exchange"), and
that, as a result, Delta will become a subsidiary of PPR; and

WHEREAS, as an inducement to PPR entering into this Agreement and incurring
the obligations set forth herein, concurrently with the execution and delivery
of this Agreement, P-PR Transfer, LLP, a Delaware limited liability
partnership ("P-PRT"), and PPR are entering into a Voting Agreement in the
form of Exhibit A hereto, pursuant to which P-PRT has agreed to vote its
shares of PPR Class A common stock par value $.01 per share (the "PPR Class A
Common Stock") and PPR Class B Common Stock in favor of this Agreement and the
transactions contemplated hereby; and

WHEREAS, simultaneously with the consummation of the Exchange, PPR will
acquire 100% of the issued and outstanding membership interests of Dak Bev
LLC, a Delaware limited liability company (the "Dakota Acquisition") and the
consummation of the Dakota Acquisition is a condition precedent to the
consummation of the Exchange; and

WHEREAS, for federal income tax purposes, it is intended that the Exchange
together with the Dakota Acquisition shall qualify as a transfer to a
controlled corporation within the meaning of Section 351(a) of the Internal
Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE, in consideration of the premises, and in reliance on the
representations, warranties and covenants contained herein, the parties agree
as follows:

ARTICLE I

THE EXCHANGE

Section 1.1 The Exchange. At the Closing (as defined in Section 1.5):

(a) each share of Delta Stock issued and outstanding immediately prior to
the Closing shall be exchanged for 343.8381 shares of validly issued, fully
paid and nonassessable shares of PPR Class B Common Stock; and

(b) each share of Delta Preferred Stock Series AA issued and outstanding
immediately prior to the Closing ("Delta Preferred") shall continue as an
issued and outstanding share of preferred stock subject to the terms and
conditions of the Delta Certificate of Incorporation and the provisions of
Section 6.17 hereof.

A-5
<PAGE>

(c) if as a result of the foregoing any of the Delta Stockholders would
receive a fractional share of PPR Class B Common Stock, such fractional share
shall be rounded up to the nearest whole share of PPR Class B Common Stock.

Section 1.2 Exchange Procedures.

(a) PPR shall authorize a commercial bank reasonably acceptable to Delta to
act as exchange agent hereunder (the "Exchange Agent"). At or prior to the
Closing, PPR shall deliver to and deposit with the Exchange Agent, in trust
for the Delta Stockholders, certificates representing the shares of PPR Class
B Common Stock to be issued pursuant to Section 1.1 in exchange for
outstanding certificates representing shares of Delta Stock (such shares of
PPR Class B Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund"). At the
Closing, PPR shall deliver to Delta a true and complete copy of the Depository
Agreement between PPR and the Exchange Agent pertaining to the Exchange Fund
and an original receipt of the Exchange Agent acknowledging receipt of the
Exchange Fund.

(b) At or prior to the Closing, each of the Delta Stockholders shall deliver
to the Exchange Agent, in trust for PPR, certificates representing the number
of shares of Delta Stock set forth opposite such Delta Stockholder's name on
Schedule 1 hereto (the "Delta Certificates") to be exchanged for PPR Class B
Common Stock, duly endorsed for transfer or with executed stock powers
attached thereto. At the Closing, Delta shall deliver to PPR an original
receipt of the Exchange Agent acknowledging receipt of Delta Certificates
representing all of the issued and outstanding shares of Delta Stock.

(c) As soon as practicable after the Closing, the Exchange Agent shall (i)
deliver to the Delta Stockholders certificates representing shares of PPR
Class B Common Stock for which their shares of Delta Stock have been
exchanged, and (ii) deliver to PPR all of the Delta Certificates.

Section 1.3 Transfer Taxes. If any certificate representing shares of PPR
Class B Common Stock is to be paid to or issued in a name other than that in
which the Delta Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the Delta Certificate so
surrendered shall be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange shall pay to the
Exchange Agent any transfer or other Taxes required by reason of the issuance
of certificates for such shares of PPR Class B Common Stock in a name other
than that of the registered holder of the Delta Certificate surrendered, or
shall establish to the satisfaction of the Exchange Agent that such Tax has
been paid or is not applicable.

Section 1.4 Lost Certificates. If any Delta Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Delta Certificate to be lost, stolen or destroyed and, if
required by PPR, the posting by such person of a bond, in such reasonable
amount as PPR may direct (but consistent with the practices PPR applies to its
own stockholders), as indemnity against any claim that may be made against it
with respect to such Delta Certificate, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Delta Certificate the shares of
PPR Class B Common Stock.

Section 1.5 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") and all actions specified in this Agreement to occur
at the Closing shall take place at the offices of Briggs and Morgan,
Professional Association, 2400 IDS Center, 80 South Eighth Street,
Minneapolis, Minnesota, at 10:00 a.m., local time, no later than the third
business day following the day on which the last of the conditions set forth
in Article VII shall have been fulfilled or waived (if permissible) or at such
later time and place as PPR and Delta shall agree in writing. Delta shall
notify all of the Delta Stockholders of the time of the Closing at least three
(3) business days prior to the Closing.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PPR

PPR represents and warrants to Delta and the Delta Stockholders as follows:

A-6
<PAGE>

Section 2.1 Organization, Standing and Power. PPR is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and has the requisite corporate power and authority to own, lease
or operate its properties and to carry on its business as now being conducted.
Each Subsidiary of PPR (the "PPR Subsidiaries") is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it
is organized and has the requisite corporate (in the case of a Subsidiary that
is a corporation) or other power and authority to own, lease or operate its
properties and to carry on its business as now being conducted. PPR and each
of the PPR Subsidiaries are duly qualified to do business, and are in good
standing, in each jurisdiction where the character of their properties owned
or held under lease or the nature of their activities makes such qualification
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect on PPR. For purposes of
this Agreement (a) "Material Adverse Change" or "Material Adverse Effect"
means, when used with respect to PPR or Delta, as the case may be, any change
or effect that is materially adverse to the business, assets, liabilities,
results of operation or condition (financial or otherwise) of PPR and the PPR
Subsidiaries, taken as a whole, or Delta and the Delta Subsidiaries, taken as
a whole, as the case may be, and (b) "Subsidiary" means any corporation,
partnership, limited liability company, joint venture or other legal entity of
which PPR or Delta, as the case may be (either alone or through or together
with any other Subsidiary), owns, directly or indirectly, 50% or more of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of
such corporation, partnership, limited liability company, joint venture or
other legal entity.

Section 2.2 Capital Structure.

(a) Capital Stock of PPR. The authorized capital stock of PPR consists of
40,000,000 shares, of which 5,000,000 shares are designated as PPR Class A
Common Stock and 35,000,000 are designated as PPR Class B Common Stock. As of
the date hereof, PPR has issued and outstanding 5,000,000 shares of PPR Class
A Common Stock and 16,690,000 shares of PPR Class B Common Stock. All
outstanding shares of PPR Class A Common Stock and PPR Class B Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in PPR's Form 10-K for the period ended
December 31, 1998, and except for option grants under the Pepsi-Cola Puerto
Rico Bottling Company Qualified Plan dated December 30, 1996 and the Pepsi-
Cola Puerto Rico Bottling Company Non-Qualified Plan dated December 30, 1996
(collectively, the "PPR Option Plans") in the ordinary course of business
since December 31, 1998, PPR has no outstanding securities convertible into or
exchangeable for common stock, no contracts, rights, options, warrants or
other agreements or commitments to purchase or otherwise issue any shares of
its capital stock or securities convertible into or exchangeable therefor, or
any shares reserved for issuance under any stock option, employee benefit or
other plans or otherwise. No holder of any security of PPR is entitled to any
preemptive or similar rights to purchase securities from PPR.

(b) Capital Stock of PPR After Exchange and Dakota Acquisition. On the date
of Closing, upon completion of the Exchange and the Dakota Acquisition, (i)
the authorized capital stock of PPR will consist of 150,000,000 shares, of
which 5,000,000 shares will be designated as PPR Class A Common Stock and
145,000,000 will be designated as PPR Class B Common Stock, and (ii) PPR will
have issued and outstanding 5,000,000 shares of PPR Class A Common Stock and
81,760,006 shares of PPR Class B Common Stock, not including any shares of PPR
Class B Common Stock that PPR is permitted to issue by this Agreement (other
than in connection with the Dakota Acquisition) during the period from the
date of this Agreement through the date of Closing. Assuming that the Closing
were to occur on the date hereof, immediately after such Closing, the issued
and outstanding PPR Class A Common Stock and PPR Class B Common Stock would be
owned as set forth on Schedule 2.2(b).

A-7
<PAGE>

similar interest in, any corporation, partnership, limited liability company,
joint venture or other legal entity. All outstanding shares of capital stock
of the PPR Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable. Except as set forth on Schedule 2.2(c), none of
the PPR Subsidiaries has any outstanding securities convertible into or
exchangeable for common stock, no contracts, rights, options, warrants or
other agreements or commitments to purchase or otherwise issue any shares of
capital stock or other equity interests of any of the PPR Subsidiaries or
securities convertible into or exchangeable therefor, or any shares reserved
for issuance under stock option, employee benefit or other plans or otherwise.
No holder of any security of any of the PPR Subsidiaries is entitled to any
preemptive or similar rights to purchase securities from any such Subsidiary.

Section 2.3 Authority. The PPR Special Committee and PPR's Board of
Directors have, on or prior to the date of this Agreement (a) declared that as
of such date the Exchange was advisable and fair to and in the best interests
of PPR and its stockholders, (b) approved this Agreement and resolved to
recommend the approval of this Agreement and the transactions contemplated
hereby by PPR's stockholders, and (c) directed that this Agreement and the
transactions contemplated hereby be submitted to PPR's stockholders for
approval. Subject to the approval by PPR's stockholders of the PPR Charter
Amendment (as defined in Section 6.1), PPR has all requisite corporate power
and authority to enter into this Agreement and, subject to approval by PPR's
stockholders of this Agreement and the transactions contemplated hereby
including the Exchange, to issue the PPR Class B Common Stock in connection
with the Exchange (the "Share Issuance") and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by PPR and
the consummation by PPR of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of PPR, subject to
the approval of this Agreement and the transactions contemplated hereby
including the Exchange, by the stockholders of PPR. This Agreement has been
duly executed and delivered by PPR and (assuming the valid authorization,
execution and delivery of this Agreement by Delta and the Delta Stockholders)
this Agreement constitutes the valid and binding obligation of PPR enforceable
against it in accordance with its terms except to the extent that (i)
enforcement may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to or limiting creditors' remedies, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief are subject to
certain equitable defenses and to the discretion of the court or other
tribunal before which any proceeding therefor may be brought. Subject to
approval by the stockholders of PPR, the Share Issuance has been duly
authorized by all necessary corporate action on the part of PPR. When issued
in accordance with the terms of this Agreement, the shares of PPR Class B
Common Stock to be issued under this Agreement will be duly authorized,
validly issued, fully paid and nonassessable.

Section 2.4 Consents and Approvals; No Violation. Except as disclosed on
Schedule 2.4 hereto, and assuming that all consents, approvals, authorizations
and other actions described in the second sentence of this Section 2.4 have
been obtained, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or the loss of any
present or future benefit under, or result in the creation of any Encumbrance
upon any of the properties or assets of PPR or any of the PPR Subsidiaries
under, any provision of (i) the Certificate of Incorporation or Bylaws of PPR,
(ii) the comparable charter or organizational documents of any of the PPR
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease, ground lease or other agreement, instrument, permit,
concession, franchise or license applicable to PPR or any of the PPR
Subsidiaries or (iv) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to PPR or any of the PPR Subsidiaries or any of
their respective real or personal properties or assets, other than, in the
case of clauses (ii), (iii) or (iv), any such violations, defaults, rights, or
Encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect on PPR, or prevent or materially delay the consummation of any
of the transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state),
foreign or supranational court, commission, governmental body, regulatory
agency, authority or tribunal (a "Governmental Entity") is required by or with
respect to PPR or any of the PPR Subsidiaries in connection with the execution
and delivery of this Agreement by PPR or is necessary for the

A-8
<PAGE>

consummation of the transactions contemplated by this Agreement, except for
(i) the filing with the SEC of (A) the proxy statement for the special meeting
of PPR's stockholders to be held for the purpose of obtaining the approvals
required for the transactions contemplated hereby (the "Proxy Statement"); and
(B) such reports and information under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby, (ii)
such as may be required under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (iii) applicable requirements, if any, of
Blue Sky Laws and the New York Stock Exchange, Inc. (the "NYSE") and (iv) such
other consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on PPR, or prevent or
materially delay the consummation of any of the transactions contemplated
hereby.

Section 2.5 SEC Documents and Other Reports. PPR has filed all required
forms, reports, documents, statements (including proxy statements) and
exhibits with the SEC that were required to be filed pursuant to the Exchange
Act or other federal securities laws since July 1, 1996 (the "PPR SEC
Documents"). As of their respective dates, the PPR SEC Documents complied in
all material respects with the then applicable requirements of the Securities
Act or the Exchange Act, as the case may be, and, at the respective times they
were filed, none of the PPR SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements (including, in each case, any notes thereto) of PPR
included in the PPR SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as of their respective dates of
filing, were prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of the unaudited statements, as
permitted by Regulation S-X of the SEC) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the consolidated
financial position of PPR and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended (subject, in the case
of unaudited statements, to the absence of footnote disclosure and any other
adjustments described therein and normal year-end audit adjustments). Except
as disclosed in the PPR SEC Documents or as required by GAAP, PPR has not,
since December 31, 1998, made any change in the accounting practices or
policies applied in the preparation of its financial statements.

Section 2.6 Absence of Certain Changes. Except as set forth on Schedule 2.6
hereof, since December 31, 1998, PPR and the PPR Subsidiaries have operated
their businesses only in the ordinary course and consistent with past
practices and there has not been:

(a) any Material Adverse Change in PPR;

(b) any dividend or other distribution on, or any recapitalization,
combination or subdivision with respect to, or any purchase or redemption
by PPR or the PPR Subsidiaries of, any shares of the capital stock of PPR
or any of the PPR Subsidiaries except for distributions in the ordinary
course of business and consistent with past practice on outstanding shares
of non-voting management stock of Beverage Plastics Company, a Delaware
corporation, of which all of its outstanding voting common stock is owned
by PPR;

(c) except for the sale of substantially all of the assets of PPR's
Cristalia premium water division, any sale, transfer, lease, or Encumbrance
of any of PPR's or any of the PPR Subsidiaries' assets or cancellation of
any claims of, or indebtedness or obligations owing to, PPR or any of the
PPR Subsidiaries, except in the ordinary course of business;

(d) any material increase in the salaries or other compensation or
employee benefits with respect to any employees of PPR or the PPR
Subsidiaries except regularly scheduled increases in accordance with prior
practices or existing agreements;

(e) any purchase of or agreement to purchase any additional assets by PPR
or any of the PPR Subsidiaries, except in the ordinary course of business
or for a purchase price of less than $500,000;

A-9
<PAGE>

(f) any loss, damage, destruction or other casualty to any of the
properties of PPR or the PPR Subsidiaries (whether or not covered by
insurance) (i) in excess of $100,000 per occurrence or $500,000 in the
aggregate or (ii) which has resulted in a Material Adverse Effect on PPR or
the PPR Subsidiaries;

(g) any entry into any additional, or modification of any existing,
agreements to borrow money (whether secured or unsecured), or any
refinancing of such agreements except in the ordinary course of business;

(h) any entry into any guarantee by PPR or the PPR Subsidiaries on behalf
of any third party;

(i) any capital expenditures by PPR or the PPR Subsidiaries in excess of
the amount set forth in PPR's 1999 Capital Expenditure Budget, a true and
correct copy of which is appended to Schedule 2.6 hereto, except for
expenditures related to repairs or replacements for which adequate
insurance was or is available;

(j) changes in accounting principles, elections, or procedures, other
than as required by changes in GAAP;

(k) any entry into any employment, consulting, management or severance
agreement by PPR or any of the PPR Subsidiaries other than severance
payments required to be made under Puerto Rican Law 80 except in the
ordinary course of business;

(l) any amendment of the Certificate of Incorporation or Bylaws of PPR or
any comparable charter or organizational documents of the PPR Subsidiaries;

(m) authorization for issuance, sale, delivery or agreement or commitment
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any shares of any class of PPR's or any of the PPR Subsidiaries'
capital stock or any securities convertible into or exchangeable for shares
of any class of such capital stock, other than the grant of options to
employees under the PPR Option Plans in the ordinary course of business;

(n) any amendment or termination of any material agreement to which PPR
or any of the PPR Subsidiaries is a party; or

(o) any action taken by PPR or the PPR Subsidiaries, or their directors,
officers or stockholders to authorize any of the actions contemplated
above.

Section 2.7 Permits; Compliance and Contracts. Except as disclosed on
Schedule 2.7: (a) each of PPR and the PPR Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates (including, without limitation,
certificates of occupancy), approvals, orders of any Governmental Entity and
other permits, including, without limitation, building, environmental, land-
use, health, safety, fire, utility or other rights or permits necessary for
PPR or any of the PPR Subsidiaries to own, lease and operate all of the PPR
Real Property (as defined in Section 2.16) or to carry on its business as it
is now being conducted (collectively, the "PPR Permits"), except where the
failure to have any of the PPR Permits would not, individually or in the
aggregate, have a Material Adverse Effect on PPR, and, (b) as of the date of
this Agreement, neither PPR nor any of the PPR Subsidiaries is in violation
of, or has been charged with, is in receipt of any notice or warning of, or to
the Knowledge of PPR (as hereinafter defined), under investigation with
respect to, any failure or alleged failure to comply with (A) its charter,
bylaws or other organizational documents, (B) any applicable law, ordinance,
administrative or governmental rule or regulation (except for Environmental
Laws which are addressed in Section 2.12 hereto) or (C) any order, decree or
judgment of any Governmental Entity having jurisdiction over PPR or any of the
PPR Subsidiaries, except, in the case of clauses (A), (B) and (C), for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on PPR. All of the material contracts of PPR and the PPR
Subsidiaries that are required to be described in the PPR SEC Documents or to
be filed as exhibits thereto are described in the PPR SEC Documents or filed
as exhibits thereto. Except as set forth in the PPR SEC Documents filed prior
to the date of this Agreement or as set forth on Schedule 2.7, each material
contract is in full force and effect and no event of default or event that,
but for the giving of notice or the lapse of time or both, would constitute an
event of default exists or, upon the consummation by PPR of the

A-10
<PAGE>

transactions contemplated by this Agreement, will exist under any indenture,
mortgage, loan agreement, note or other agreement or instrument for borrowed
money, any guarantee of any agreement or instrument for borrowed money or any
lease, contractual license or other agreement or instrument to which PPR or
any of the PPR Subsidiaries is a party or by which PPR or any PPR Subsidiary
is bound or to which any of the properties, assets or operations of PPR or any
such Subsidiary is subject, other than any defaults that, individually or in
the aggregate, would not have a Material Adverse Effect on PPR. "Knowledge of
PPR" means the actual knowledge of A. David Velez and Joseph Gonzalez.

Section 2.8 Tax Matters.

(a) Except as disclosed on Schedule 2.8, PPR and the PPR Subsidiaries have
(i) duly and timely filed (or there has been duly filed on their behalf) all
tax returns required to be filed by or with respect to PPR and/or the PPR
Subsidiaries, including all foreign, federal, Puerto Rican and local Tax
Returns, and all such Tax Returns were true, accurate and complete in all
material respects, (ii) withheld and collected all Taxes that are required by
applicable laws, rules or regulations to be withheld and collected and (iii)
paid in full on a timely basis (or there have been paid on their behalf) all
Taxes shown to be due on such Tax Returns. The reserve for Taxes on the
December 31, 1998 consolidated balance sheet contained in PPR's Form 10-K for
the period ending December 31, 1998 for the payment of all accrued but unpaid
Taxes through the date thereof has been determined in accordance with GAAP and
is adequate in amount for the payment of all liabilities for Taxes for which
PPR and the PPR Subsidiaries are liable for the periods up to and including
December 31, 1998. Neither PPR nor the PPR Subsidiaries have incurred any Tax
liabilities since December 31, 1998, other than those Tax liabilities arising
in the ordinary course of business and consistent with prior periods.

(b) Except as described on Schedule 2.8, neither PPR nor the PPR
Subsidiaries has received any notice of a deficiency or assessment (and none
has been threatened) with respect to Taxes of PPR or the PPR Subsidiaries from
any foreign, federal, Puerto Rico or local taxing authority which has not been
fully paid or finally settled; there are no ongoing audits or examination of
any Tax Return which includes PPR or the PPR Subsidiaries and no notice of
audit or examination of any such Tax Return has been received by PPR or any of
the PPR Subsidiaries (and none has been threatened); PPR or the PPR
Subsidiaries have not given and there has not been given on its or their
behalf a waiver or extension of any statute of limitations relating to the
payment of Taxes of PPR or the PPR Subsidiaries; and no issue has been raised
in writing on audit or in any other proceeding with respect to Taxes of PPR or
the PPR Subsidiaries by any foreign, federal, Puerto Rico, or local taxing
authority.

(c) For purposes of this Agreement, the terms "Tax" and "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments imposed by
any United States or Puerto Rican, federal, state, local or foreign taxing
authority, including, but not limited to, income, excise, property, sales,
transfer, franchise, payroll, employment, unemployment, back-up withholding,
gains, withholding, ad valorem, social security or other taxes, including any
interest, penalties or additions attributable to taxes, and the term "Tax
Return" shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto and any amendments thereof.

Section 2.9 Actions and Proceedings. Except as set forth in the PPR SEC
Documents or on Schedule 2.9:

(a) there are no outstanding orders, judgments, injunctions, awards or
decrees of any Governmental Entity against or involving (i) PPR or any of
the PPR Subsidiaries, (ii) any of the present or former directors,
officers, employees, consultants, agents or stockholders of PPR or any of
the PPR Subsidiaries, as such, (iii) any of PPR's or any PPR Subsidiaries'
properties, assets or business or (iv) any PPR Plan (as hereinafter
defined) that, in the case of clauses (i), (ii), (iii) or (iv) individually
or in the aggregate, would have a Material Adverse Effect on PPR; or

(b) as of the date of this Agreement, there are no actions, suits or
claims or legal, administrative or arbitrative proceedings or
investigations pending or, to the Knowledge of PPR, threatened against or
involving (i) PPR or any of the PPR Subsidiaries, (ii) any of PPR's or any
PPR Subsidiaries' present or former directors, officers, employees,
consultants, agents or stockholders, as such, (iii) any of PPR's or any PPR
Subsidiaries'

A-11
<PAGE>

properties, assets or business or (iv) any PPR Plan that in the case of
clauses (i), (ii), (iii) or (iv), individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect on PPR or relate to the
transactions contemplated by this Agreement.

Section 2.10 Certain Agreements. As of the date of this Agreement, neither
PPR nor any of the PPR Subsidiaries is a party to any oral or written
agreement or plan, including any stock option plan, stock appreciation rights
plan, restricted stock plan, stock purchase plan, PPR Other Benefit Obligation
or PPR Plan (as both are defined in Section 2.11), any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement.

Section 2.11 Employee Benefit Matters.

(a) As used in this Section 2.11, the following terms have the meanings set
forth below:

"PPR Other Benefit Obligation" means all material obligations,
arrangements, or customary practices, whether or not legally enforceable,
to provide benefits, other than salary, as compensation for services
rendered, to present or former directors, employees, or agents, other than
with respect to any PPR Plan. This includes sabbatical policies, severance
payment policies, and material fringe benefits within the meaning of Code
(S) 132.

"PPR Plan" means (i) all employee benefit plans (as defined in ERISA
(S) 3(3)) of which PPR or the PPR Subsidiaries is a Plan Sponsor (as
defined in ERISA (S) 3(16)(B)), or to which PPR or the PPR Subsidiaries
otherwise contributes or in which PPR or the PPR Subsidiaries otherwise
participates, or (ii) all Title IV Plans and Multi-Employer Plans (as
defined in ERISA (S) 3(37)(A)) of which an ERISA Affiliate is a Plan
Sponsor or otherwise contributes or currently participates.

"PPR VEBA" means a voluntary employees' beneficiary association under
Code (S) 501(c)(9) whose members include employees of PPR or the PPR
Subsidiaries.

"ERISA Affiliate" means any other person that, together with PPR or any
of the PPR Subsidiaries, would be treated as a single employer under Code
(S) 414(b), (c) or, solely with respect to matters relating to Code (S) 412
or ERISA (S)(S) 302 or 4007, (m).

"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

"Title IV Plans" means all PPR Plans that are subject to Title IV of
ERISA, 29 U.S.C. (S) 1301 et seq., other than Multi-Employer Plans.

(b) (i) Schedule 2.11(b)(i) attached hereto sets forth a complete and
accurate list of all PPR Plans, PPR Other Benefit Obligations, and PPR VEBAs,
and identifies as such all PPR Plans that: (A) are defined benefit plans (as
defined in ERISA (S) 3(35)); (B) meet or purport to meet the requirements of
Code (S) 401(a); or (C) are Title IV Plans.

(ii) None of the PPR Plans set forth on Schedule 2.11(b)(i) is a Multi-
Employer Plan and none of PPR, any of the PPR Subsidiaries or any ERISA
Affiliate has any assessed or potential liability due to a complete or partial
withdrawal from or a termination or reorganization of a Multi-Employer Plan.
No circumstances exist that could reasonably be expected to result in any such
liability to PPR, any PPR Subsidiary or any ERISA Affiliate.

(iii) Except as set forth in Schedule 2.11(b)(iii) or as required by
applicable law, no PPR Plans provide retiree health or life insurance
benefits.

(c) PPR has delivered or made available to Delta all documents, insurance
policies and contracts comprising, describing or relating to each PPR Plan,
PPR Other Benefit Obligation, or PPR VEBA and of any related trust; as well as
all required filings for each of the above filed with government authorities
for each of the three most recent plan years.

A-12
<PAGE>

(d) Except as set forth in Schedule 2.11(d) attached hereto:

(i) PPR or the PPR Subsidiaries have performed in all material respects
all of their respective obligations whether as plan administrator,
fiduciary, plan sponsor or contributing employer under all PPR Plans, PPR
Other Benefit Obligations, and PPR VEBAs in a timely manner and have made
all required entries in their financial records and statements for all
obligations and liabilities that have accrued but are not due. No written
or oral statement has been made by PPR or the PPR Subsidiaries to any
Person with regard to any PPR Plan or PPR Other Benefit Obligation not in
accordance with such plan or other benefit obligation which could
reasonably be expected to have a Material Adverse Effect on PPR or the PPR
Subsidiaries.

(ii) PPR, the PPR Subsidiaries and each PPR Plan, PPR Other Benefit
Obligation, and PPR VEBA is, to the extent applicable, in material
compliance with applicable law, except for any such failure to comply which
would not result in any material liability to PPR or any of the PPR
Subsidiaries. PPR and all PPR Subsidiaries have met any applicable minimum
funding standard, and have made all contributions required, under ERISA
(S) 302. The most recent actuarial report for each defined benefit plan of
PPR, each PPR Subsidiary and each ERISA Affiliate thereof fairly presents
the financial condition of each such plan, and since the date of such
report there has been no material adverse change in the funded status of
any such plan.

(iii) Since December 31, 1998, there has been no establishment,
termination or amendment of any PPR Plan, PPR VEBA, or PPR Other Benefit
Obligation, except to effect the Board's option of an amendment to PPR's
Salaried Employee Retirement Plan to use the GATT interest rate standard.

(iv) Other than routine claims for benefits submitted by participants or
beneficiaries, no claim against, or legal proceeding involving or relating
to, any PPR Plan, PPR Other Benefit Obligation, or PPR VEBA is pending or,
to PPR's Knowledge, is threatened.

(v) None of PPR, the PPR Subsidiaries or any ERISA Affiliate has
terminated any Title IV Plan or any other defined benefit plan (as defined
in ERISA Section 3(35)), or incurred any outstanding liability under
Section 4062 of ERISA to the PBGC or to a trustee appointed under Section
4042 of ERISA, and no events have occurred and no circumstances exist that
could reasonably be expected to result in any such liability to PPR, the
PPR Subsidiaries or any ERISA Affiliate. All premiums due the PBGC with
respect to the Title IV Plans have been paid.

(vi) There has been no "reportable event" within the meaning of Section
4043 of ERISA with respect to any Title IV Plan which would require the
giving of notice to the PBGC or any other event requiring disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA.

(vii) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, either alone or
upon the occurrence of subsequent events, (i) result in any payment
becoming due to any current or former employee, officer or director of PPR
or the PPR Subsidiaries, (ii) increase any benefits otherwise payable under
any PPR Plan or PPR Other Benefit Obligation, (iii) result in the
acceleration of the time of payment or vesting of any benefits under any
PPR Plan or PPR Other Benefit Obligation, (iv) constitute a "change in
control" or similar event under any PPR Plan or PPR Other Benefit
Obligation or (v) fail to be deductible by reason of Section 280G of the
Code.

Section 2.12 Compliance with Environmental Laws.

(a) Except as set forth on Schedule 2.12, each of PPR and the PPR
Subsidiaries, and, to the Knowledge of PPR, any prior owner or lessee, have
generated, handled, manufactured, treated, stored, used, released, transported
and disposed of all Environmentally Regulated Materials (as defined below) on,
beneath, to or from any of the properties owned or operated by PPR and the PPR
Subsidiaries in the conduct of their businesses or any other properties
formerly owned, leased or operated by PPR or the PPR Subsidiaries, in
compliance with all Environmental Laws (as defined below).

(b) Except as set forth on Schedule 2.12, PPR and the PPR Subsidiaries have
operated all plants, facilities and business operations in compliance with all
Environmental Laws and all plants, facilities and business operations are
currently in compliance with all Environmental Laws.

A-13
<PAGE>

(c) Except as set forth on Schedule 2.12, neither PPR nor the PPR
Subsidiaries have disposed of or released any Environmentally Regulated
Material in any location which would reasonably be expected to give rise to a
claim of responsibility for investigation or clean-up costs, personal injury
or property damage liability against PPR or any PPR Subsidiary by any third
party.

(d) Except as set forth on Schedule 2.12, neither PPR nor the PPR
Subsidiaries have received any notices or claims of violations or liabilities
relating to an Environmentally Regulated Material or an Environmental Law
which notices or claims of violations or liabilities have not been resolved.

The term "Environmentally Regulated Materials" means any of the following:
(i) any petroleum or petroleum products, friable asbestos, urea formaldehyde,
and polychlorinated biphenyls; (ii) any radioactive substance; (iii) any
toxic, infectious, reactive, corrosive, ignitible or flammable chemical or
chemical compound; and (iv) any chemicals, materials or substances, whether
solid, liquid or gas defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "solid waste," or words of similar import, under any
Environmental Law.

"Environmental Law" means any applicable federal, state or local statute,
law, rule, regulation, permit, ordinance, code, policy, rule of common law or
other requirement in effect and in each case as amended from time-to-time and
any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, that (i) regulates or
relates to the protection or clean-up of the environment; the use, treatment,
storage, transportation, handling, disposal or release of Environmentally
Regulated Materials, the preservation or protection of waterways, groundwater,
drinking water, air, wildlife, plants or other natural resources; or the
health and safety of persons or property, including protection of the health
and safety of employees insofar as such health and safety laws may relate to
Environmentally Regulated Materials; or (ii) imposes liability with respect to
any of the foregoing, including the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 USC 9601 et seq., the Resource
Conservation and Recovery Act, 42 USC 6901, et seq., the Clean Water Act, 33
U.S.C. (S) 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601
et seq.; the Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. (S) 300f et seq.; the Oil Pollution Act of 1990, 33
U.S.C. (S) 2701 et seq.; and the Occupational Safety and Health Act of 1970,
as amended, as it applies to Environmentally Regulated Materials, 29 U.S.C.
(S) 651 et seq.; or any other federal, state or local law of similar effect,
each as amended from time to time.

Section 2.13 Labor Matters. Except as set forth on Schedule 2.13 hereto,
neither PPR nor any of the PPR Subsidiaries is a party to any collective
bargaining agreement or labor contract. To the Knowledge of PPR, as of the
date of this Agreement, there are no present or pending applications for
certification of any union as the exclusive bargaining agent for any employees
of PPR or any PPR Subsidiaries. To the Knowledge of PPR, neither PPR nor any
of the PPR Subsidiaries has engaged in any unfair labor practice with respect
to any persons employed by or otherwise performing services for PPR or any of
the PPR Subsidiaries (the "PPR Business Personnel"), and there is no unfair
labor practice complaint or grievance against PPR or any of the PPR
Subsidiaries by the National Labor Relations Board or any comparable state or
Puerto Rican agency pending or, to the Knowledge of PPR, threatened with
respect to the PPR Business Personnel, except where such unfair labor
practice, complaint or grievance would not have a Material Adverse Effect on
PPR. There is no labor strike, dispute, slowdown or stoppage pending or, to
the Knowledge of PPR, threatened against PPR or any of the PPR Subsidiaries,
except where such dispute, strike or work stoppage would not have a Material
Adverse Effect on PPR.

Section 2.14 Intellectual Property. Schedule 2.14 sets forth a complete list
of all patents and applications therefor, trademark registrations and
applications therefor, service mark registrations and applications therefor,
copyright registrations and applications therefor, trade names, computer
programs or software which are material to the operation of PPR's business and
interests in license agreements and all other proprietary rights that are
owned, licensed, sublicensed or used by agreement or permission by PPR or any
PPR Subsidiary and used in the continued operation of PPR's business
(collectively, "PPR Intellectual Property"). Except as otherwise set forth on
Schedule 2.14 and except for the security interest held by Banco Popular,
PPR's interest in the PPR Intellectual

A-14
<PAGE>

Property is free and clear of any Encumbrance, and constitutes all such
property or rights used by or necessary to the operation of PPR's business. To
PPR's Knowledge and except as set forth on Schedule 2.14, the use of the PPR
Intellectual Property does not conflict with, infringe upon, or misappropriate
any rights held or asserted by any person, or require the consent of any
person. Except as set forth on Schedule 2.14, neither PPR nor any PPR
Subsidiary has, in the past two years, received any notice or claim that any
such PPR Intellectual Property is not valid or enforceable, or of any
infringement upon or conflict with any patent, trademark, service mark,
copyright, trade name or trade secret of any third party by PPR or any PPR
Subsidiary or of any claim by any third party alleging any such infringement
or conflict, and, in the past two years, neither PPR nor any PPR Subsidiary
has given any notice of infringement to any third party with respect to any of
the PPR Intellectual Property. PPR has paid all required license fees related
to all software used in the operation of its business.

Section 2.15 Title to Assets; Insurance. Except as disclosed on Schedule
2.15, PPR and the PPR Subsidiaries have good and marketable title to all real
property and good title to all of the personal property and assets which they
purport to own and which are necessary to carry on its business, in each case
free and clear of all Encumbrances except for Permitted Exceptions (as defined
in Section 2.16). PPR and the PPR Subsidiaries have in full force and effect
policies of insurance that are customary for businesses of similar size in
similar industries and consistent with sound business practice.

Section 2.16 Real Property. (a) Schedule 2.16(a) describes all real
properties owned or leased by PPR and the PPR Subsidiaries (the "PPR Real
Property"), the nature of the interest of PPR or the PPR Subsidiaries and the
entity which holds the interest in those properties and the approximate
acreage of each of those properties. There is no real property (other than the
PPR Real Property) the use or possession of which by PPR and the PPR
Subsidiaries is necessary to carry on its business. Except as described on
Schedule 2.16(b), PPR and each of the PPR Subsidiaries has (i) such title to
the PPR Real Property as is legally sufficient for the current use thereof in
its business as presently conducted, (ii) good and marketable indefeasible
title in fee simple (except for Permitted Exceptions, as hereinafter defined)
to all PPR Real Property shown in Schedule 2.16(a) as owned by it (the "PPR
Owned Real Property") and (iii) valid leaseholds under valid and enforceable
leases in all PPR Real Property shown on Schedule 2.16(a) as leased by it. The
PPR Real Property is owned or leased by PPR and the PPR Subsidiaries free and
clear of all matters except for Permitted Exceptions. Except as set forth in
Schedule 2.16(b), none of the PPR Real Property is subject to any lease (other
than the PPR Leases (as hereinafter defined)), sublease, license or other
agreement granting to any person any right to the use, occupancy or enjoyment
thereof (or any portion thereof). None of the Permitted Exceptions materially
interferes with or has interfered with the maintenance, use or operation of
the PPR Real Property. "Permitted Exceptions" means (i) matters listed or
described on Schedule 2.16(b), (ii) easements, covenants, rights-of-way and
other Encumbrances or restrictions which do not, individually or in the
aggregate, materially detract from the value or impair the present and
continued use, operation and maintenance of the property subject thereto, or
impair the operation of PPR or any of the PPR Subsidiaries, (iii) real estate
taxes not yet due or payable, and (iv) Encumbrances existing at the date of
this Agreement which are set forth on Schedule 2.16(a).

(b) None of the leases identified in Schedule 2.16(a) (collectively, the
"PPR Leases") has been modified or amended, and no notice of termination has
been delivered with respect thereto, except as set forth in Schedule 2.16(b).
Except as set forth on Schedule 2.16(b), neither PPR nor any of the PPR
Subsidiaries, nor any other person, is in breach of or default under any PPR
Lease (and no event has occurred which, with due notice or lapse of time or
both, may constitute such a breach or default).

(c) To the Knowledge of PPR the buildings, driveways and all other
structures and improvements upon the PPR Real Property are all within the
boundary lines of the applicable property or have the benefit of valid
easements or other legal rights and there are no encroachments thereon that
would affect the use thereof.

(d) To the Knowledge of PPR all buildings, structures, improvements,
equipment, facilities, plants and fixtures owned or leased by PPR and the PPR
Subsidiaries conform in all material respects to all applicable codes and
rules adopted by national and local associations and boards and insurance
underwriters, and all such buildings, structures, improvements and fixtures
are in good operating condition and repair. There are no outstanding

A-15
<PAGE>

requirements or recommendations by any insurance company which has issued a
policy covering any such property, or by any board of fire underwriters or
other body exercising similar functions, requiring or recommending any repairs
or work to be done on any such property.

(e) To the Knowledge of PPR all public utilities required for the operation
of such properties either enter such properties through adjoining public
streets or, if they pass through adjoining private land, do so in accordance
with valid public or private easements which will inure to the benefit of PPR
and the PPR Subsidiaries and their respective successors and assigns. All of
the public utilities mentioned above are installed and operating, and all
installation and connection charges are paid in full.

(f) To the Knowledge of PPR, the plumbing, electrical, heating, air
conditioning, elevator, ventilating and all other mechanical or structural
systems and equipment in the buildings or improvements located on the PPR Real
Property and any manufacturing systems and components located thereof are in
good working order and condition, and the roof, basement and foundation walls
of such buildings and improvements for which PPR or the PPR Subsidiaries is
responsible (as owner or as lessee under any PPR Lease) are in good condition
and free of leaks and other defects. All such mechanical and structural
systems and equipment and such manufacturing systems and components and such
roofs, basement and foundation walls for which a person other than PPR or the
PPR Subsidiaries is responsible are in good working order and condition and
free of leaks and other defects.

(g) To the Knowledge of PPR, PPR or the PPR Subsidiaries has the
uninterrupted use of any easements for ingress and egress for all of the PPR
Real Property owned or leased by PPR or the PPR Subsidiaries, as the case may
be. The PPR Real Property has full and uninterrupted access to and from public
roads, and PPR has no Knowledge of any fact or condition which would result in
the termination of such access.

(h) Neither PPR nor the PPR Subsidiaries is the landlord or lessor under any
lease, sublease or other occupancy agreement affecting any of the PPR Real
Property.

Section 2.17 Title Insurance. Schedule 2.17 sets forth a true, correct and
complete list and a summary description of all of the policies of title
insurance insuring PPR's and the PPR Subsidiaries' interest in the PPR Owned
Real Property (collectively, the "PPR Title Policies"). PPR has furnished a
true, correct and complete copy of all such PPR Title Policies to Delta. All
of the PPR Title Policies are in full force and effect. PPR shall maintain,
and shall use its best efforts to cause the PPR Subsidiaries to maintain the
coverage under the PPR Title Policies in full force and effect through the
date of the Closing. Neither PPR nor the PPR Subsidiaries is in material
default under any provisions of the PPR Title Policies. There is no claim by
PPR, the PPR Subsidiaries or any other person pending under any of the PPR
Title Policies as to which coverage has been questioned, denied or disputed by
the underwriters or issuers of such PPR Title Policies.

Section 2.18 Zoning. To the Knowledge of PPR, all of the PPR Real Property
and the buildings, structures, improvements and fixtures located thereon, and
the respective businesses conducted thereat and the manner of such conduct,
conform in all respects to all existing zoning, building and other applicable
laws, rules and regulations and the operation of the PPR Real Property and the
improvements locate thereon is not in violation of any such laws, rules or
regulations. To the Knowledge of PPR, all uses of the PPR Real Property and
the improvements, to the Knowledge of PPR, located thereon are "as-of-right"
and do not require any non-conforming use rights, nor have they been
"grandfathered" under any pre-existing laws, rules or regulations.

Section 2.19 Brokers. No broker, investment banker or other person, other
than Bear Stearns & Co., Inc. the fees and expenses of which will be paid by
PPR, is entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of PPR.

Section 2.20 Relationships. Except as otherwise disclosed in PPR's Form 10-K
for the period ended December 31, 1998, PPR's relationships with its
franchisors, agents, brokers, dealers, distributors, representatives,
licensees, customers and suppliers are continuing, and there has been no
material change in the scope of such relationships

A-16
<PAGE>

during the last year with any of such parties or similar parties with which
PPR has done business during the last year. All sales and performances of
services by PPR in connection with its business are in material compliance
with all of PPR's representations, warranties and agreements, express or
implied, with respect to such sales and performances, except for customary
returns and allowances.

Section 2.21 Compliance with Quality Standards. All water used in the
production process of PPR's business conforms, in all material respects, to
(i) the quality standards required by PPR's or the PPR Subsidiaries'
franchisors, including PepsiCo, Inc. ("PepsiCo"), (ii) internal quality
standards required by PPR, and (iii) any Puerto Rican or local quality
standards.

Section 2.22 Year 2000 Compliance. To the extent that any functionality of
any computer system used by PPR is dependent upon or interdependent with the
use or specification of any calendar date, PPR has used commercially
reasonable efforts in implementing a plan pursuant to which any such computer
system shall be "Year 2000 Compliant," except where failure to do so will not
result in a Material Adverse Effect on PPR. For purposes of this Agreement,
the term Year 2000 Compliant means that neither the performance nor the
functionality of such computer systems shall be materially affected by dates
in, into and between the 20th and 21st centuries. To be deemed Year 2000
Compliant, such computer systems shall conform in all material respects to the
following basic requirements: (i) no value for a current date shall cause any
interruption in PPR's operations in which the computer system is used; and
(ii) any date-based functions shall operate and perform in a consistent manner
for dates in, into and between the 20th and 21st centuries and such computer
systems shall calculate, manipulate and represent properly inputted dates
correctly.

Section 2.23 Delaware Business Combination Statute. PPR has obtained or
shall obtain prior to the Closing all approvals necessary from its Board of
Directors related to the transactions contemplated by this Agreement so as to
constitute prior approval by the Board of Directors of such transactions
within the meaning of Section 203(a)(1) of the Delaware General Corporation
Law.

Section 2.24 Disclosure. No representation or warranty of PPR in this
Agreement or in any certificate, schedule, statement or other document
furnished or to be furnished by PPR to Delta or the Delta Stockholders
pursuant hereto or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated herein or therein
or necessary to make the statements herein or therein not misleading.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF DELTA

Delta represents and warrants to PPR as follows:

Section 3.1 Organization, Standing and Power. As of the date of this
Agreement, Delta is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite
corporate power and authority to own, lease or operate its properties and to
carry on its business as now being conducted. Each Subsidiary of Delta (the
"Delta Subsidiaries") is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has the
requisite corporate (in the case of a Subsidiary that is a corporation) or
other power and authority to own, lease or operate its properties and to carry
on its business as now being conducted. Delta and each of the Delta
Subsidiaries are duly qualified to do business, and are in good standing, in
each jurisdiction where the character of their properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on Delta.

Section 3.2 Capital Structure.

(a) Capital Stock of Delta. The authorized capital stock of Delta consists
of 125,000 shares, of which 60,000 shares are designated as Common Stock, par
value $.01 per share (the "Delta Common Stock"), 35,000 shares are

A-17
<PAGE>

designated as Non-Voting Common Stock, par value $.01 per share (the "Delta
Non-Voting Common Stock"), and 30,000 shares are designated as Preferred Stock
Series AA, par value $.01 per share. Delta has issued and outstanding
20,301.87 shares of Delta Common Stock, 32,949.93 shares of Delta Non-Voting
Common Stock, and 6,155.11 shares of Delta Preferred Stock. All outstanding
shares of Delta Common Stock, Delta Non-Voting Common Stock and Delta
Preferred Stock have been duly authorized and validly issued and are fully
paid and nonassessable. Except as set forth on Schedule 3.2(a), Delta has no
outstanding securities convertible into or exchangeable for common stock, no
contracts, rights, options, warrants or other agreements or commitments to
purchase or otherwise issue any shares of its capital stock or securities
convertible into or exchangeable therefor, or any shares reserved for issuance
under any stock option, employee benefit or other plans or otherwise. Except
as set forth in Delta's Certificate of Incorporation, no holder of any
security of Delta is entitled to any preemptive or similar rights to purchase
securities from Delta.

(b) Capital Stock of Delta Subsidiaries. A listing of the Delta Subsidiaries
and the authorized, issued and outstanding capital stock or other equity
interests of each of the Delta Subsidiaries, whether voting or nonvoting, and
the rights and preferences associated with each class or series of capital
stock or other equity interests, is as set forth on Schedule 3.2(b). Except as
set forth on Schedule 3.2(b), (i) Delta is the owner of all of the capital
stock or other equity interests of the Delta Subsidiaries, free and clear of
all Encumbrances and (ii) except for the Delta Subsidiaries, Delta does not
own, directly or indirectly, any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
legal entity. All outstanding shares of capital stock of the Delta
Subsidiaries have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth on Schedule 3.2(b), none of the Delta
Subsidiaries has any outstanding securities convertible into or exchangeable
for common stock, no contracts, rights, options, warrants or other agreements
or commitments to purchase or otherwise issue any shares of capital stock or
other equity interests of any of the Delta Subsidiaries or securities
convertible into or exchangeable therefor, or any shares reserved for issuance
under stock option, employee benefit or other plans or otherwise. No holder of
any security of any of the Delta Subsidiaries is entitled to any preemptive or
similar rights to purchase securities from any such Subsidiary.

Section 3.3 Authority. Delta's Board of Directors has on or prior to the
date of this Agreement determined that it is in the best interest of Delta to
enter into the Agreement. Delta has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by Delta and the
performance of its obligations hereunder have been duly authorized by all
necessary corporate action on the part of Delta. This Agreement has been duly
executed and delivered by Delta and (assuming the valid authorization,
execution and delivery of this Agreement by PPR and the Delta Stockholders)
constitutes the valid and binding obligation of Delta enforceable against
Delta in accordance with its terms except to the extent that (a) enforcement
may be limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to or limiting
creditors' remedies and (b) the remedy of specific performance and injunctive
and other forms of equitable relief are subject to certain equitable defenses
and to the discretion of the court or other tribunal before which any
proceeding therefor may be brought.

A-18
<PAGE>

consummation of this transaction will constitute a "change of control" under
the Indenture dated as of December 17, 1996 related to the 9 3/4% Senior Notes
due 2003 which will require written notice from Delta to such noteholders and
give such noteholders a right to require Delta to redeem their notes at 101%
of par and other than, in the case of clauses (ii), (iii) or (iv), any such
violations, defaults, rights or Encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on Delta, or prevent or
materially delay the consummation of any of the transactions contemplated
hereby. No filing or registration with, or authorization, consent or approval
of, any Governmental Entity is required by or with respect to Delta or any of
the Delta Subsidiaries in connection with the execution and delivery of this
Agreement by Delta or is necessary for the consummation of the transactions
contemplated by this Agreement, except for (A) such reports and information
under the Exchange Act as may be required in connection with this Agreement
and the transactions contemplated hereby, (B) such as may be required under
the HSR Act, and (C) such consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would
not, individually or in the aggregate, have a Material Adverse Effect on Delta
or prevent or materially delay the consummation of any of the transactions
contemplated hereby.

Section 3.5 SEC Documents and Other Reports. Delta has filed all required
forms, reports, documents, statements (including proxy statements) and
schedules with the SEC that were required to be filed pursuant to the Exchange
Act or other federal securities laws since July 1, 1996 (the "Delta SEC
Documents"). As of their respective dates, the Delta SEC Documents complied in
all material respects with the then applicable requirements of the Securities
Act or the Exchange Act, as the case may be, and, at the respective times they
were filed, none of the Delta SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements (including, in each case, any notes thereto) of Delta
included in the Delta SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as of their respective dates of
filing, were prepared in accordance with GAAP (except, in the case of the
unaudited statements, as permitted by Regulation S-X of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly presented in all material respects
the consolidated financial position of Delta and its consolidated Subsidiaries
as at the respective dates thereof and the consolidated results of their
operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to the absence of footnote
disclosure and any other adjustments described therein and normal year-end
audit adjustments). Except as disclosed in the Delta SEC Documents or as
required by GAAP, Delta has not, since December 31, 1998, made any change in
the accounting practices or policies applied in the preparation of its
financial statements.

Section 3.6 Absence of Certain Changes or Events. Except as set forth on
Schedule 3.6 hereof, since December 31, 1998, Delta and the Delta Subsidiaries
have operated their businesses only in the ordinary course and consistent with
past practices and there has not been:

(a) any Material Adverse Change in Delta;

(b) any dividend or other distribution on (other than regularly scheduled
quarterly dividends on the Delta Preferred), or any recapitalization,
combination or subdivision with respect to, or any purchase or redemption
by Delta or the Delta Subsidiaries of, any shares of the capital stock of
Delta or any of the Delta Subsidiaries;

(c) any sale, transfer, lease, or Encumbrance of any of Delta's or any of
the Delta Subsidiaries' assets or cancellation of any claims of, or
indebtedness or obligations owing to, Delta or any of the Delta
Subsidiaries, except in the ordinary course of business;

(d) any material increase in the salaries or other compensation or
employee benefits with respect to any employees of Delta or the Delta
Subsidiaries except regularly scheduled increases in accordance with prior
practices or existing agreements;

A-19
<PAGE>

(e) any purchase of or agreement to purchase any additional assets by
Delta or any of the Delta Subsidiaries, except in the ordinary course of
business;

(f) any loss, damage, destruction or other casualty to any of the
properties of Delta or the Delta Subsidiaries (whether or not covered by
insurance) (i) in excess of $100,000 per occurrence or $500,000 in the
aggregate or (ii) which has resulted in a Material Adverse Effect in Delta;

(h) any entry into any guarantee by Delta or the Delta Subsidiaries on
behalf of any third party;

(i) any capital expenditures by Delta or the Delta Subsidiaries in excess
of the amount set forth in Delta's 1999 Capital Expenditure Budget, a true
and correct copy of which is appended to Schedule 3.6 hereto;

(j) changes in accounting principles, elections, or procedures, other
than as required by changes in GAAP;

(k) any entry into any employment, consulting, management or severance
agreement by Delta or any of the Delta Subsidiaries except in the ordinary
course of business;

(l) amendment of the Charter or Bylaws of Delta or any of the Delta
Subsidiaries;

(m) authorization for issuance, sale, delivery or agreement or commitment
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any shares of any class of Delta's or any of the Delta
Subsidiaries' capital stock or any securities convertible into or
exchangeable for shares of any class of such capital stock, other than the
issuance of additional shares of Delta Preferred as payment-in-kind for the
quarterly dividends payable on shares of outstanding Delta Preferred;

(n) any amendment or termination of any material agreement to which Delta
or any of the Delta Subsidiaries is a party; or

(o) any action taken by Delta or the Delta Subsidiaries, or their
directors, officers or stockholders to authorize any of the actions
contemplated above.

Section 3.7 Permits; Compliance and Contracts. Except as disclosed on
Schedule 3.7: (a) each of Delta and the Delta Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates (including, without limitation,
certificates of occupancy), approvals, orders of any Governmental Entity and
other permits, including, without limitation, building, environmental, land-
use, health, safety, fire, utility or other rights or permits necessary for
Delta or any of the Delta Subsidiaries to own, lease and operate all of the
Delta Real Property (as defined in Section 3.17) or to carry on its business
as it is now being conducted (collectively, the "Delta Permits"), except where
the failure to have any of Delta Permits would not, individually or in the
aggregate, have a Material Adverse Effect on Delta, and, (b) as of the date of
this Agreement, neither Delta nor any of the Delta Subsidiaries is in
violation of, or has been charged with, is in receipt of any notice or warning
of, or to the Knowledge of Delta (as hereinafter defined), under investigation
with respect to, any failure or alleged failure to comply with (A) its
charter, bylaws or other organizational documents, (B) to the Knowledge of
Delta any applicable law, ordinance, administrative or government rule or
regulation or (C) any order, decree or judgment of any Governmental Entity
having jurisdiction over Delta or any of the Delta Subsidiaries, except, in
the case of clauses (A), (B) and (C), for any violations that, individually or
in the aggregate, would not have a Material Adverse Effect on Delta. All of
the material contracts of Delta and the Delta Subsidiaries that are required
to be described in the Delta SEC Documents or to be filed as exhibits thereto
are described in the Delta SEC Documents or filed as exhibits thereto. Except
as set forth in the Delta SEC Documents filed prior to the date of this
Agreement or on Schedule 3.7, each material contract is in full force and
effect and no event of default or event that, but for the giving of notice or
the lapse of time or both, would constitute an event of default exists or,
upon the consummation by Delta of the transactions contemplated by this
Agreement, will exist under any

A-20
<PAGE>

indenture, mortgage, loan agreement, note or other agreement or instrument for
borrowed money, any guarantee of any agreement or instrument for borrowed
money or any lease, contractual license or other agreement or instrument to
which Delta or any of the Delta Subsidiaries is a party or by which Delta or
any such Subsidiary is bound or to which any of the properties, assets or
operations of Delta or any Delta Subsidiary is subject, other than any
defaults that, individually or in the aggregate, would not have a Material
Adverse Effect on Delta. "Knowledge of Delta" means the actual knowledge of
Robert C. Pohlad, John F. Bierbaum, Raymond R. Stitle, Bradley J. Braun, Jay
S. Hulbert, Kenneth E. Keiser, Michael Naylor or Charles Pullius.

Section 3.8 Tax Matters.

(a) Except as disclosed on Schedule 3.8, Delta and the Delta Subsidiaries
have (i) duly and timely filed (or there has been duly filed on their behalf)
all Tax Returns required to be filed by or with respect to Delta and/or the
Delta Subsidiaries, including all foreign, federal, and local Tax Returns, and
all such Tax Returns were true, accurate and complete in all material
respects, (ii) withheld and collected all Taxes that are required by
applicable laws, rules or regulations to be withheld and collected and (iii)
paid in full on a timely basis (or there have been paid on their behalf) all
Taxes shown to be due on such Tax Returns. Except as disclosed on Schedule
3.8, (x) all Taxes for which Delta or the Delta Subsidiaries may be liable
under Treasury Regulations (S)1.1502-6 (or analogous state or foreign
provisions) by virtue of having been a member of any "affiliated group" (or
other group filing on a combined or unitary basis), if required to have been
paid, have been paid (except for Taxes which are being contested in good
faith), and (y) neither Delta nor the Delta Subsidiaries are a party to any
tax sharing or allocation agreement. The reserve for Taxes on the December 31,
1998 consolidated balance sheet contained in Delta's Form 10-K for the period
ended December 31, 1998 for the payment of all accrued but unpaid Taxes
through the date thereof has been determined in accordance with GAAP and is
adequate in amount for the payment of all liabilities for Taxes for which
Delta and the Delta Subsidiaries are liable for the periods up to and
including December 31, 1998. Neither Delta nor the Delta Subsidiaries have
incurred any Tax liabilities since December 31, 1998, other than those Tax
liabilities arising in the ordinary course of business and consistent with
prior periods.

(b) Except as set forth on Schedule 3.8, neither Delta nor the Delta
Subsidiaries has received any notice of a deficiency or assessment (and none
has been threatened) with respect to Taxes of Delta or the Delta Subsidiaries
from any foreign, federal, or local taxing authority which has not been fully
paid or finally settled; there are no ongoing audits or examination of any Tax
Return which includes Delta or the Delta Subsidiaries and no notice of audit
or examination of any such Tax Return has been received by Delta or any of the
Delta Subsidiaries (and none has been threatened); Delta or the Delta
Subsidiaries have not given and there has not been given on its or their
behalf a waiver or extension of any statute of limitations relating to the
payment of Taxes of Delta or the Delta Subsidiaries; and no issue has been
raised in writing on audit or in any other proceeding with respect to Taxes of
Delta or the Delta Subsidiaries by any foreign, federal, or local taxing
authority.

(c) Neither Delta nor the Delta Subsidiaries are or have been a United
States real property holding corporation within the meaning of Section
897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code") during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

Section 3.9 Actions and Proceedings. Except as set forth in Delta SEC
Documents or on Schedule 3.9: (a) there are no outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Entity against or involving
(i) Delta or any of the Delta Subsidiaries, (ii) any of the present or former
directors, officers, employees, consultants, agents or stockholders of Delta
or any of the Delta Subsidiaries, as such, (iii) any of Delta's or Delta
Subsidiaries' properties, assets or business or (iv) any Delta Plan (as
hereinafter defined) that in the case of clauses (i), (ii), (iii) or (iv),
individually or in the aggregate, would have a Material Adverse Effect on
Delta; or (b) as of the date of this Agreement, there are no actions, suits or
claims or legal, administrative or arbitrative proceedings or investigations
pending or, to the Knowledge of Delta, threatened against or involving (i)
Delta or any of the Delta Subsidiaries, (ii) any of Delta's or Delta
Subsidiaries' present or former directors, officers, employees, consultants,
agents or stockholders, as such, or (iii) any of Delta's or Delta
Subsidiaries' properties, assets or business, or (iv) any Delta Plan that in
the case of clauses (i), (ii), (iii) or (iv), individually or in the
aggregate, would have a Material Adverse Effect on Delta or relate to the
transactions contemplated by this Agreement.

A-21
<PAGE>

Section 3.10 Certain Agreements. As of the date of this Agreement, neither
Delta nor any of the Delta Subsidiaries is a party to any oral or written
agreement or plan, including any stock option plan, stock appreciation rights
plan, restricted stock plan, stock purchase plan, Delta Other Benefit
Obligation or Delta Plan (as both are defined in Section 3.11), any of the
benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement. Neither Delta nor any Delta Subsidiary is a party to any
termination benefits agreement or severance agreement or employment agreement
one trigger of which would be the consummation of the transactions
contemplated by this Agreement, except as set forth on Schedule 3.10.

Section 3.11 Employee Benefit Matters.

(a) As used in this Section 3.11, the following terms have the meanings set
forth below:

"Delta Other Benefit Obligation" means all material obligations,
arrangements, or customary practices, whether or not legally enforceable,
to provide benefits, other than salary, as compensation for services
rendered, to present or former directors, employees, or agents, other than
with respect to any Delta Plan. This includes sabbatical policies,
severance payment policies, and material fringe benefits within the meaning
of Code (S) 132.

"Delta Plan" means (i) all employee benefit plans (as defined in ERISA
(S) 3(3)) of which Delta or the Delta Subsidiaries is a Plan Sponsor (as
defined in ERISA (S) 3(16)(B)), or to which Delta or the Delta Subsidiaries
otherwise contributes or in which Delta or the Delta Subsidiaries otherwise
participates, or (ii) all Title IV Plans and Multi-Employer Plans (as
defined in ERISA (S) 3(37)(A)) of which an ERISA Affiliate is a Plan
Sponsor or otherwise contributes or currently participates.

"Delta VEBA" means a voluntary employees' beneficiary association under
Code (S) 501(c)(9) whose members include employees of Delta or the Delta
Subsidiaries.

"ERISA Affiliate" means any other person that, together with Delta or any
of the Delta Subsidiaries, would be treated as a single employer under Code
(S) 414(b), (c) or, solely with respect to matters relating to Code (S) 412
or ERISA (S)(S) 302 or 4007, (m).

"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

"Title IV Plans" means all Delta Plans that are subject to Title IV of
ERISA, 29 U.S.C. (S) 1301 et seq., other than Multi-Employer Plans.

(b) (i) Schedule 3.11(b)(i) attached hereto sets forth a complete and
accurate list of all Delta Plans, Delta Other Benefit Obligations, and Delta
VEBAs, and identifies as such all Delta Plans that: (A) are defined benefit
plans (as defined in ERISA (S) 3(35)); (B) meet or purport to meet the
requirements of Code (S) 401(a); or (C) are Title IV Plans.

(ii) None of the Delta Plans set forth on Schedule 3.11(b)(i) is a Multi-
Employer Plan and none of Delta, any of the Delta Subsidiaries or any ERISA
Affiliate has any assessed or potential liability due to a complete or partial
withdrawal from or a termination or reorganization of a Multi-Employer Plan.
No circumstances exist that could reasonably be expected to result in any such
liability to Delta, any Delta Subsidiary or any ERISA Affiliate.

(iii) Except as set forth in Schedule 3.11(b)(iii) or as required by
applicable law, no Delta Plans provide retiree health or life insurance
benefits.

(c) Delta has delivered or made available to PPR all documents, insurance
policies and contracts comprising, describing or relating to each Delta Plan,
Delta Other Benefit Obligation, or Delta VEBA and of any related trust; as
well as all required filings for each of the above filed with government
authorities for each of the three most recent plan years.

(d) Except as set forth in Schedule 3.11(d) attached hereto:

A-22
<PAGE>

(i) Delta or the Delta Subsidiaries have performed in all material
respects all of their respective obligations whether as plan administrator,
fiduciary, plan sponsor or contributing employer under all Delta Plans,
Delta Other Benefit Obligations, and Delta VEBAs in a timely manner and
have made all required entries in their financial records and statements
for all obligations and liabilities that have accrued but are not due. No
written or oral statement has been made by Delta or the Delta Subsidiaries
to any Person with regard to any Delta Plan or Delta Other Benefit
Obligation not in accordance with such plan or other benefit obligation
which could reasonably be expected to have a Material Adverse Effect on
Delta or the Delta Subsidiaries.

(ii) Delta, the Delta Subsidiaries and each Delta Plan, Delta Other
Benefit Obligation, and Delta VEBA is, to the extent applicable, in
material compliance with applicable law, except for any such failure to
comply which would not result in any material liability to Delta or any of
the Delta Subsidiaries. Delta and all Delta Subsidiaries have met any
applicable minimum funding standard, and have made all contributions
required, under ERISA (S) 302. The most recent actuarial report for each
Title IV Plan fairly presents the financial condition of each such plan,
and since the date of such report there has been no material adverse change
in the funded status of any such plan.

(iii) Since December 31, 1998, there has been no establishment or
amendment of any Delta Plan, Delta VEBA, or Delta Other Benefit Obligation.

(iv) Other than routine claims for benefits submitted by participants or
beneficiaries, no claim against, or legal proceeding involving or relating
to, any Delta Plan, Delta Other Benefit Obligation, or Delta VEBA is
pending or, to Delta's Knowledge, is threatened.

(v) None of Delta, the Delta Subsidiaries or any ERISA Affiliate has
terminated any Title IV Plan or incurred any outstanding liability under
Section 4062 of ERISA to the PBGC or to a trustee appointed under Section
4042 of ERISA, and no events have occurred and no circumstances exist that
could reasonably be expected to result in any such liability to Delta, the
Delta Subsidiaries or any ERISA Affiliate. All premiums due the PBGC with
respect to the Title IV Plans have been paid.

(vii) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, either alone or
upon the occurrence of subsequent events, (i) result in any payment
becoming due to any current or former employee, officer or director of
Delta or the Delta Subsidiaries, (ii) increase any benefits otherwise
payable under any Delta Plan or Delta Other Benefit Obligation, (iii)
result in the acceleration of the time of payment or vesting of any
benefits under any Delta Plan or Delta Other Benefit Obligation, (iv)
constitute a "change in control" or similar event under any Delta Plan or
Delta Other Benefit Obligation or (v) fail to be deductible by reason of
Section 280G of the Code.

Section 3.12 Compliance with Environmental Laws.

(a) Except as set forth on Schedule 3.12, each of Delta and the Delta
Subsidiaries, and, to the Knowledge of Delta, any prior owner or lessee, have
generated, handled, manufactured, treated, stored, used, transported and
disposed of all Environmentally Regulated Materials (as defined below) on,
beneath, to or from any of the properties owned or operated by Delta and the
Delta Subsidiaries in the conduct of their businesses or any other properties
formerly owned, leased or operated by Delta or the Delta Subsidiaries, in
compliance with all Environmental Laws.

(b) Except as set forth on Schedule 3.12, Delta and the Delta Subsidiaries
have operated all plants, facilities and business operations in compliance
with all Environmental Laws, and all plants, facilities and business
operations are currently in compliance with all Environmental Laws.

(c) Except as set forth on Schedule 3.12, neither Delta nor the Delta
Subsidiaries have disposed of or released any Environmentally Regulated
Material in any location which would reasonably be expected to give rise to a
claim

A-23
<PAGE>

of responsibility for investigation or clean-up costs, personal injury or
property damage liability against Delta or any Delta Subsidiary by any third
party.

(d) Except as set forth on Schedule 3.12, neither Delta nor the Delta
Subsidiaries have received any notices or claims of violations or liabilities
relating to an Environmentally Regulated Material or an Environmental Law
which notices or claims of violations or liabilities have not been resolved.

Section 3.13 Indebtedness. Schedule 3.13 sets forth a complete listing of
Delta's and the Delta Subsidiaries' indebtedness for borrowed money as of the
date hereof, and includes a description of all documents and agreements which
set forth the terms of such indebtedness, the amount of the balance owing as
of the date hereof, the applicable interest rate in effect as of the date
hereof, and a listing of all collateral securing such indebtedness (if any),
and a description of any applicable prepayment penalties or make-whole amounts
that would be payable if such indebtedness were to be paid in full as of the
date hereof.

Section 3.14 Labor Matters. Neither Delta nor any of the Delta Subsidiaries
is a party to any collective bargaining agreement or labor contract, except as
set forth in Schedule 3.14. To the Knowledge of Delta, as of the date of this
Agreement, there are no present or pending applications for certification of
any union as the exclusive bargaining agent for any employees of Delta or any
Delta Subsidiaries. To the Knowledge of Delta, neither Delta nor any of the
Delta Subsidiaries has engaged in any unfair labor practice with respect to
any persons employed by or otherwise performing services primarily for Delta
or any of the Delta Subsidiaries (the "Delta Business Personnel"), and there
is no unfair labor practice complaint or grievance against Delta or any of the
Delta Subsidiaries by the National Labor Relations Board or any comparable
state agency pending or, to the Knowledge of Delta, threatened with respect to
Delta Business Personnel, except where such unfair labor practice, complaint
or grievance would not have a Material Adverse Effect on Delta. There is no
labor strike, dispute, slowdown or stoppage pending or, to the Knowledge of
Delta, threatened against Delta or any of the Delta Subsidiaries, except where
such dispute, strike or work stoppage would not have a Material Adverse Effect
on Delta.

Section 3.15 Intellectual Property. Schedule 3.15 sets forth a complete list
of all patents and applications therefor, trademark registrations and
applications therefor, service mark registrations and applications therefor,
copyright registrations and applications therefor, trade names, computer
programs or software which are material to the operation of Delta's business
and interests in license agreements and all other proprietary rights that are
owned, licensed, sublicensed or used by agreement or permission by Delta or
any Delta Subsidiary and used in the continued operation of Delta's business
(collectively, "Delta Intellectual Property"). Except as otherwise set forth
on Schedule 3.15, Delta's interest in the Delta Intellectual Property is free
and clear of any Encumbrance, and constitutes all such property or rights used
by or necessary to the operation of Delta's business. To Delta's Knowledge and
except as set forth on Schedule 3.15, the use of the Delta Intellectual
Property does not conflict with, infringe upon, or misappropriate any rights
held or asserted by any person, or require the consent of any person. Except
as set forth on Schedule 3.15, neither Delta nor any Delta Subsidiary has, in
the past two years, received any notice or claim that any such Delta
Intellectual Property is not valid or enforceable, or of any infringement upon
or conflict with any patent, trademark, service mark, copyright, trade name or
trade secret of any third party by Delta or any Delta Subsidiary or of any
claim by any third party alleging any such infringement or conflict, and, in
the past two years, neither Delta nor any Delta Subsidiary has given any
notice of infringement to any third party with respect to any of the Delta
Intellectual Property. Delta has paid all required license fees related to all
software used in the operation of its business.

Section 3.16 Title to Assets; Insurance. Except as disclosed on Schedule
3.16, Delta and the Delta Subsidiaries have good and marketable title to all
real property and good title to all of the personal property and assets which
they purport to own and which are necessary to carry on its business, in each
case free and clear of all Encumbrances except for Permitted Exceptions (as
defined in Section 3.17). Delta and the Delta Subsidiaries have in full force
and effect policies of insurance that are customary for businesses of similar
size in similar industries and consistent with sound business practice.

Section 3.17 Real Property. (a) Schedule 3.17(a) describes all real
properties owned or leased by Delta and the Delta Subsidiaries (the "Delta
Real Property"), the nature of the interest of Delta or the Delta Subsidiaries
and

A-24
<PAGE>

the entity which holds the interest in those properties and the approximate
acreage of each of those properties. There is no real property (other than the
Delta Real Property) the use or possession of which by Delta and the Delta
Subsidiaries is necessary to carry on its business. Except as described on
Schedule 3.17(b), Delta and each of the Delta Subsidiaries has (i) such title
to the Delta Real Property as is legally sufficient for the current use
thereof in its business as presently conducted, (ii) good and marketable
indefeasible title in fee simple (except for Permitted Exceptions, as
hereinafter defined) to all Delta Real Property shown in Schedule 3.17(a) as
owned by it (the "Delta Owned Real Property") and (iii) valid leaseholds under
valid and enforceable leases in all Delta Real Property shown on Schedule
3.17(a) as leased by it. The Delta Real Property is owned or leased by Delta
and the Delta Subsidiaries free and clear of all matters except for Permitted
Exceptions. Except as set forth in Schedule 3.17(b), none of the Delta Real
Property is subject to any lease (other than the Delta Leases (as hereinafter
defined)), sublease, license or other agreement granting to any person any
right to the use, occupancy or enjoyment thereof (or any portion thereof).
None of the Permitted Exceptions materially interferes with or has interfered
with the maintenance, use or operation of the Delta Real Property. "Permitted
Exceptions" means (i) matters listed or described on Schedule 3.17(b), (ii)
easements, covenants, rights-of-way and other Encumbrances or restrictions
which do not, individually or in the aggregate, materially detract from the
value or impair the present and continued use, operation and maintenance of
the property subject thereto, or impair the operation of Delta or any of the
Delta Subsidiaries, (iii) real estate taxes not yet due or payable, and (iv)
Encumbrances that are existing at the date of this Agreement which are set
forth on Schedule 3.17(a).

(b) None of the leases identified in Schedule 3.17(a) (collectively, the
"Delta Leases") has been modified or amended, and no notice of termination has
been delivered with respect thereto, except as set forth in Schedule 3.17(b).
Except as set forth on Schedule 3.17(b), neither Delta nor any of the Delta
Subsidiaries, nor any other person, is in breach of or default under any Delta
Lease (and no event has occurred which, with due notice or lapse of time or
both, may constitute such a breach or default).

(c) To the Knowledge of Delta the buildings, driveways and all other
structures and improvements upon the Delta Real Property are all within the
boundary lines of the applicable property or have the benefit of valid
easements or other legal rights and there are no encroachments thereon that
would affect the use thereof.

(d) To the Knowledge of Delta all buildings, structures, improvements,
equipment, facilities, plants and fixtures owned or leased by Delta and the
Delta Subsidiaries conform in all material respects to all applicable codes
and rules adopted by national and local associations and boards and insurance
underwriters, and all such buildings, structures, improvements and fixtures
are in good operating condition and repair. There are no outstanding
requirements or recommendations by any insurance company which has issued a
policy covering any such property, or by any board of fire underwriters or
other body exercising similar functions, requiring or recommending any repairs
or work to be done on any such property.

(e) To the Knowledge of Delta all public utilities required for the
operation of such properties either enter such properties through adjoining
public streets or, if they pass through adjoining private land, do so in
accordance with valid public or private easements which will inure to the
benefit of Delta and the Delta Subsidiaries and their respective successors
and assigns. All of the public utilities mentioned above are installed and
operating, and all installation and connection charges are paid in full.

(f) To the Knowledge of Delta, the plumbing, electrical, heating, air
conditioning, elevator, ventilating and all other mechanical or structural
systems and equipment in the buildings or improvements located on the Delta
Real Property and any manufacturing systems and components located thereof are
in good working order and condition, and the roof, basement and foundation
walls of such buildings and improvements for which Delta or the Delta
Subsidiaries is responsible (as owner or as lessee under any Delta Lease) are
in good condition and free of leaks and other defects. All such mechanical and
structural systems and equipment and such manufacturing systems and components
and such roofs, basement and foundation walls for which a person other than
Delta or the Delta Subsidiaries is responsible are in good working order and
condition and free of leaks and other defects.

A-25
<PAGE>

(g) To the Knowledge of Delta, Delta or the Delta Subsidiaries has the
uninterrupted use of any easements for ingress and egress for all of the Delta
Real Property owned or leased by Delta or the Delta Subsidiaries, as the case
may be. The Delta Real Property has full and uninterrupted access to and from
public roads, and Delta has no Knowledge of any fact or condition which would
result in the termination of such access.

(h) Neither Delta nor the Delta Subsidiaries is the landlord or lessor under
any lease, sublease or other occupancy agreement affecting any of the Delta
Real Property.

Section 3.18 Title Insurance. Schedule 3.18 sets forth a true, correct and
complete list and a summary description of all of the policies of title
insurance insuring Delta's and the Delta Subsidiaries' interest in the Delta
Owned Real Property (collectively, the "Delta Title Policies"). Delta has
furnished a true, correct and complete copy of all such Delta Title Policies
to Delta. All of the Delta Title Policies are in full force and effect. Delta
shall maintain, and shall use its best efforts to cause the Delta Subsidiaries
to maintain the coverage under the Delta Title Policies in full force and
effect through the date of the Closing. Neither Delta nor the Delta
Subsidiaries is in material default under any provisions of the Delta Title
Policies. There is no claim by Delta, the Delta Subsidiaries or any other
person pending under any of the Delta Title Policies as to which coverage has
been questioned, denied or disputed by the underwriters or issuers of such
Delta Title Policies.

Section 3.19 Zoning. To the Knowledge of Delta, all of the Delta Real
Property and the buildings, structures, improvements and fixtures located
thereon, and the respective businesses conducted thereat and the manner of
such conduct, conform in all respects to all existing zoning, building and
other applicable laws, rules and regulations and the operation of the Delta
Real Property and the improvements located thereon is not in violation of any
such laws, rules or regulations. To the Knowledge of Delta, all uses of the
Delta Real Property and the improvements, to the Knowledge of Delta, located
thereon are "as-of-right" and do not require any non-conforming use rights,
nor have they been "grandfathered" under any pre-existing laws, rules or
regulations.

Section 3.20 Brokers. No broker, investment banker or other person is
entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Delta.

Section 3.21 Relationships. Except as otherwise disclosed in Delta's Form
10-K for the period ended December 31, 1998, Delta's relationships with its
franchisors, agents, brokers, dealers, distributors, representatives,
licensees, customers and suppliers are continuing, and there has been no
material change in the scope of such relationships during the last year with
any of such parties or similar parties with which Delta has done business
during the last year. All sales and performances of services by Delta in
connection with its business are in compliance with all of Delta's
representations, warranties and agreements, express or implied, with respect
to such sales and performances, except for customary returns and allowances.

Section 3.22 Compliance with Quality Standards. All water used in the
production process of Delta's business conforms, in all material respects, to
(i) the quality standards required by Delta's or the Delta Subsidiaries'
franchisors, including PepsiCo, (ii) internal quality standards required by
Delta, and (iii) any local quality standards.

Section 3.23 Year 2000 Compliance. To the extent that any functionality of
any computer system used by Delta is dependent upon or interdependent with the
use or specification of any calendar date, Delta has used commercially
reasonable efforts in implementing a plan pursuant to which any such computer
system shall be "Year 2000 Compliant," except where failure to do so will not
result in a Material Adverse Effect on Delta. For purposes of this Agreement,
the term Year 2000 Compliant means that neither the performance nor the
functionality of such computer systems shall be materially affected by dates
in, into and between the 20th and 21st centuries. To be deemed Year 2000
Compliant, such computer systems shall conform in all material respects to the
following basic requirements: (i) no value for a current date shall cause any
interruption in Delta's operations in which the computer system is used; and
(ii) any date-based functions shall operate and perform in a consistent manner
for dates in, into and between the 20th and 21st centuries and such computer
systems shall calculate, manipulate and represent properly inputted dates
correctly.

A-26
<PAGE>

Section 3.24 Disclosure. No representation or warranty of Delta in this
Agreement or in any certificate, schedule, statement or other document
furnished or to be furnished by Delta to PPR pursuant hereto or in connection
with the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated herein or therein or necessary to make the statements
herein or therein not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE DELTA STOCKHOLDERS

Each of the Delta Stockholders, for itself but not on behalf of any other
Delta Stockholder, represents and warrants to PPR as follows:

Section 4.1 Title; Authority. Such Delta Stockholder is the beneficial owner
of the class and number of shares of Delta Stock set forth opposite such
stockholder's name on Schedule 1 hereto (it being understood that such
beneficial owner may hold such shares in the name of its nominee as holder of
record, in which case such nominee has been indicated in parenthesis next to
such beneficial owner's name), and owns such shares of Delta Stock free and
clear of all Encumbrances, except for restrictions on transfer imposed by
federal and state securities laws and the Amended and Restated Shareholders
Agreement dated as of September 23, 1993 and except as described on Schedule
1. Such Delta Stockholder has the authority to execute, deliver and perform
its obligations under this Agreement. This Agreement has been duly executed
and delivered by such Delta Stockholder and (assuming the valid authorization,
execution and delivery of this Agreement by PPR and the other parties hereto)
constitutes a legal, valid and binding obligation of such Delta Stockholder
and is enforceable against such Delta Stockholder in accordance with its
terms, except to the extent that (i) enforcement may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or similar laws now
or hereafter in effect relating to or limiting creditors' remedies and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief are subject to certain equitable defenses and to the discretion of the
court or other tribunal before which any proceeding therefor may be brought.

Section 4.2 No Breach. The execution and delivery of this Agreement by such
Delta Stockholder and the consummation by such Delta Stockholder of the
Exchange does not and will not contravene, violate, or constitute or result in
a breach or default (with or without notice or lapse of time, or both) under,
the charter or organizational documents of such Delta Stockholder or any
contract or agreement by which such Delta Stockholder is bound (except as
would not have a material adverse effect on such Delta Stockholder's ability
to perform its obligations under this Agreement or as may arise under the
Amended and Restated Shareholder's Agreement dated as of September 23, 1993),
or any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to such Delta Stockholders or result in the creation or imposition
of any Encumbrance (other than under this Agreement) on the shares of the
Delta Stock owned by such Delta Stockholder.

Section 4.3 No Consents. Except as set forth in Schedule 4.3 hereto or as
required by the Amended and Restated Shareholder's Agreement dated as of
September 23, 1993, no consent or authorization of, or registration,
declaration or filing with, any person, is required to be made or received by
such Delta Stockholder in connection with the execution and delivery of this
Agreement or the consummation of the Exchange.

Section 4.4 Entire Interest. The Delta Stock listed opposite such Delta
Stockholder's name on Schedule 1 hereto constitutes such Delta Stockholder's
entire ownership interest in Delta as of the date hereof, and such Delta
Stockholder has no rights to acquire any additional shares of Delta Stock or
any other equity interest in Delta, except with respect to the Delta Preferred
and the preemptive rights contained in Article Fourth of Delta's Amended and
Restated Certificate of Incorporation.

Section 4.5 Accredited Investor Status; PPR Information. Such Delta
Stockholder is an "accredited investor" as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act and has knowledge and
experience in financial and business matters sufficient to evaluate the merits
and risks of the investment in the shares of PPR

A-27
<PAGE>

Class B Common Stock and is able to bear such risks. Such Delta Stockholder
has been given access to full and complete information regarding PPR,
including the opportunity to meet with PPR officers and review the PPR SEC
Filings.

Section 4.6 Unregistered Securities; Investment Intent. Such Delta
Stockholder acknowledges that the shares of PPR Class B Common Stock have not
been registered under the Securities Act or relevant state securities laws
pursuant to exemptions from registration under the Securities Act and such
laws, and that PPR's reliance upon such exemptions is predicated in part on
such Delta Stockholder's representations to PPR as contained herein. The
shares of PPR Class B Common Stock are being purchased for the account of such
Delta Stockholder for investment and without the intention of reselling,
transferring or redistributing the same, other than as provided in or
contemplated by this Agreement. Such Delta Stockholder has no agreement for
the transfer or disposition of any of such shares, except as provided in this
Agreement.

Section 4.7 Restrictions on Transfer. Such Delta Stockholder acknowledges
that PPR will place a restrictive legend on the certificate(s) representing
the shares of PPR Class B Common Stock, containing substantially the following
language:

The securities represented by this certificate were issued without
registration under the Securities Act of 1933, as amended (the "Act"),
and without registration under state securities laws, in reliance upon
exemptions contained in the Act and such laws. No transfer of these
securities or any interest therein may be made except pursuant to
effective registration statements under said laws unless this
corporation has received an opinion of counsel satisfactory to it that
such transfer or disposition does not require registration under said
laws and, for any sales under Rule 144 of the Act, such evidence as it
shall reasonably request for compliance with that rule.

PPR will place a stop transfer order on the certificate(s) representing the
shares to assure compliance with this Agreement and the matters referenced
above.

ARTICLE V

COVENANTS RELATING TO CONDUCT OF BUSINESS

Section 5.1 Actions by PPR. Except as expressly permitted by clauses (a)
through (k) of this Section 5.1, or as otherwise required by this Agreement,
during the period from the date of this Agreement through the date of Closing,
PPR shall, and shall cause each of the PPR Subsidiaries to, in all material
respects carry on its business in the ordinary course as currently conducted
and, to the extent consistent therewith, use reasonable best efforts to
preserve intact its current business organizations, keep available the
services of its current officers and employees and preserve its relationships
and goodwill with customers, suppliers and others having business dealings
with it. Without limiting the generality of the foregoing, and except as
otherwise expressly contemplated by this Agreement, PPR shall not, and shall
not permit any of the PPR Subsidiaries to, without the prior written consent
of Delta and the Delta Stockholders holding, in the aggregate, a majority of
the Delta Stock:

(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions payable in cash, shares,
stock, securities or property in respect of, any of its capital stock, or
otherwise make any payments to its stockholders in their capacity as such
(other than dividends and other distributions by PPR Subsidiaries including
dividends on outstanding shares of non-voting management stock of Beverage
Plastics Company, a Delaware corporation, in the ordinary course of
business and consistent with past practice), (y) other than in the case of
any PPR Subsidiary, subdivide, split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock
or (z) purchase, redeem or otherwise acquire any shares of capital stock of
PPR or any other securities thereof or any rights, warrants or options to
acquire, directly or indirectly, any such shares or other securities;

A-28
<PAGE>

options to acquire any such shares, voting securities, equity equivalent or
convertible securities, or agree to any amendment to the terms of any
option, warrant or convertible security, other than (x) the grant of stock
options to employees of PPR or any of the PPR Subsidiaries under the PPR
Option Plans and the issuance of shares of PPR Stock pursuant to the
exercise thereof in the ordinary course of business consistent with past
practice, (y) the issuance of PPR Stock pursuant to the exercise of
warrants outstanding as of the date hereof that are exercisable or become
exercisable by their terms (as in effect on the date hereof), and (z) the
issuance of PPR Stock as consideration for the acquisitions permitted to be
made by PPR by clause (d) of this Section 5.1;

(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, limited
liability company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, except for (x)
the Dakota Acquisition on substantially the terms set forth in the Dakota
Exchange Agreement (as hereinafter defined) without giving effect to any
waiver or modification thereof and (y) acquisitions which do not exceed $50
million individually or $100 million in the aggregate;

(e) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of any of its assets, other than transactions that are in
the ordinary course of business consistent with past practice and not
material to PPR and the PPR Subsidiaries taken as a whole;

(f) incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than (x) in the ordinary
course of business consistent with past practice (including refinancings of
existing debt), (y) indebtedness, loans, advances, capital contributions
and investments between PPR and any of the PPR Subsidiaries, and (z)
indebtedness incurred to fund the acquisitions permitted by Section 5.1(d)
above, including any amendments necessary to existing loan documents with
Banco Popular to extend the facility to $40 million and replace Banco
Popular as the primary lender with NationsBanc (or an affiliate of
NationsBanc) and other syndication participants.

(g) enter into or adopt, or amend any existing, severance plan, agreement
or arrangement or enter into or amend any PPR Plan, PPR Option Plan or
employment or consulting agreement, other than as required by law and other
than amending existing PPR Option Plans to increase the number of shares
available for issuance thereunder;

(h) knowingly violate or knowingly fail to perform any material
obligation or duty imposed upon it or any PPR Subsidiary by any applicable
material federal, state, Puerto Rican, or local law, rule, regulation,
guideline or ordinance;

(i) take any action, other than reasonable and usual actions in the
ordinary course of business consistent with past practice, with respect to
accounting policies or procedures (other than actions required to be taken
by GAAP);

(j) except as set forth on PPR's 1999 Capital Expenditure Budget, enter
into any other material transaction or make any other capital expenditure
not in the ordinary course of business consistent with past practice; or

(k) authorize, recommend or announce an intention to do any of the
foregoing, or enter into any contract, agreement, commitment or arrangement
to do any of the foregoing.

Section 5.2 Actions by Delta. Except as expressly permitted by clauses (a)
through (l) of this Section 5.2, or otherwise required by this Agreement,
during the period from the date of this Agreement through the date of Closing,
Delta shall, and shall cause each of the Delta Subsidiaries to, in all
material respects, carry on its business in the ordinary course as currently
conducted and, to the extent consistent therewith, use reasonable best efforts
to preserve intact its current business organizations, keep available the
services of its current officers and employees

A-29
<PAGE>

and preserve its relationships and goodwill with customers, suppliers and
others having business dealings with it. Without limiting the generality of
the foregoing, and except as otherwise expressly contemplated by this
Agreement, Delta shall not, and shall not permit any of the Delta Subsidiaries
to, without the prior written consent of PPR:

(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions payable in cash, shares,
stock, securities or property in respect of, any of its capital stock, or
otherwise make any payments to its stockholders in their capacity as such,
other than regularly scheduled quarterly dividends on Delta Preferred, (y)
other than in the case of any Delta Subsidiary, subdivide, split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (z) purchase, redeem or otherwise acquire,
directly or indirectly, any shares of capital stock of Delta or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;

(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock (other than the issuance of additional shares
of Delta Preferred as payment-in-kind for the quarterly dividends payable
on shares of outstanding Delta Preferred, any other voting securities or
equity equivalent or any securities convertible into, or any rights,
warrants or options to acquire any such shares, voting securities, equity
equivalent or convertible securities, or agree to any amendment to the
terms of any option, warrant or convertible security;

(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a portion of the assets of or equity in, or by any other manner,
any business or any corporation, partnership, limited liability company,
association or other business organization or division thereof or otherwise
acquire or agree to acquire any assets other than transactions that are in
the ordinary course of business consistent with past practice and that are
not material;

(e) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than transactions that are
in the ordinary course of business consistent with past practice and not
material to Delta and the Delta Subsidiaries taken as a whole;

(f) incur any indebtedness in excess of that permitted under existing
credit facilities for borrowed money, guarantee any such indebtedness or
make any loans, advances or capital contributions to, or other investments
in, any other person, other than (x) indebtedness for borrowed money
incurred in the ordinary course of business consistent with past practice
(including but not limited to the issuance of additional notes as payment-
in-kind for accrued interest on Delta's 11% subordinated notes due December
23, 2003 as set forth in that certain Note Exchange Agreement dated as of
September 23, 1993 by and among Delta and the Noteholders set forth on
Schedule 1 thereto), and (y) indebtedness, loans, advances, capital
contributions and investments between Delta and any of the Delta
Subsidiaries;

(g) alter (through merger, liquidation, reorganization, restructuring or
in any other fashion) the corporate structure or ownership of Delta;

(h) enter into or adopt, or amend any existing, severance plan, agreement
or arrangement or enter into or amend any Delta Plan or employment or
consulting agreement, other than as required by law;

(i) knowingly violate or knowingly fail to perform any material
obligation or duty imposed upon it or any Delta Subsidiary by any
applicable material federal, state or local law, rule, regulation,
guideline or ordinance;

(j) take any action, other than reasonable and usual actions in the
ordinary course of business consistent with past practice, with respect to
accounting policies or procedures (other than actions required to be taken
by GAAP);

A-30
<PAGE>

(k) except as set forth on Delta's 1999 Capital Expenditure Budget, enter
into any other material transaction or make any other capital expenditure
not in the ordinary course of business consistent with past practice; or

(l) authorize, recommend, propose or announce an intention to do any of
the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.

ARTICLE VI

ADDITIONAL AGREEMENTS

Section 6.1 PPR Stockholder Meeting. PPR shall call a meeting of its
stockholders (the "PPR Stockholder Meeting") for the purpose of: (a) approving
the transactions contemplated hereby, including, but not limited to, the Share
Issuance and the Exchange; (b) approving an increase in the number of
authorized shares of PPR's Class B Common Stock to 145,000,000 shares (the
"PPR Charter Amendment"); (c) approving the amendments to the PPR Option Plans
to increase the number of shares available for issuance thereunder and (d)
approving such other matters as PPR's Board of Directors shall determine. PPR
shall within thirty (30) days after the execution of this Agreement, prepare
and file with the SEC the Proxy Statement for the purpose of soliciting
proxies for the matters brought before the PPR Stockholder Meeting. PPR will,
through the PPR Board of Directors with the concurrence of the PPR Special
Committee, recommend to its stockholders approval of such matters and shall
not withdraw such recommendation; provided, however, that the PPR Special
Committee shall not be required to make, and shall be entitled to withdraw,
such recommendation if and only if the PPR Special Committee concludes in good
faith on the basis of the advice of Willkie Farr & Gallagher that the making
of, or the failure to withdraw, such recommendation would violate the
fiduciary obligations of the PPR Special Committee under applicable law;
provided further, however, that in no case shall any change in the trading
price of PPR Class B Common Stock be used as a basis for any such conclusion.
Notwithstanding any recission of the recommendation by the PPR Special
Committee that is permitted by this Section 6.1, PPR shall remain obligated to
call the PPR Stockholder Meeting.

Section 6.2 Preparation of the Registration Statement and the Proxy
Statement.

(a) Within thirty (30) days after the Closing Date, PPR shall prepare and
file with the SEC a Registration Statement on Form S-3 for the purpose of
registering for resale by the Delta Stockholders or their assigns (the
"Holders") the shares of PPR Class B Common Stock issued in the Exchange (the
"Registration Statement"). PPR shall use its best efforts to have the
Registration Statement declared effective under the Securities Act prior to
the expiration of the lock-up period described in Section 7.1(h). PPR will
advise the Holders in writing, promptly after it receives notice thereof, of
the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order (or
the initiating or threatening of any proceeding for that purpose), of the
suspension of the qualification of the PPR Class B Common Stock issuable in
connection with the Exchange for offering or sale in any jurisdiction (or the
initiating or threatening of any proceeding for that purpose), or of any
request by the SEC for amendment of the Registration Statement or comments
thereon and responses thereto or requests by the SEC for additional
information. The Holders shall receive an opinion from counsel to PPR, dated
as of the effective date of the Registration Statement, subject to customary
qualifications and limitations for such opinions and in a form reasonably
satisfactory to such Holders, to the effect that PPR is duly organized,
validly existing and in good standing in Delaware, the PPR Class B Common
Stock included in the Registration Statement has been registered under the
Securities Act, the conditions to use by PPR of a registration statement on
Form S-3 under the Securities Act, as set forth in the General Instructions to
Form S-3, have been satisfied with respect to the Registration Statement and
that the Registration Statement has become effective under the Securities Act.
PPR shall prepare and file with the SEC such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration Statement
effective until the later of nine months from the end of the lock-up period or
until such time as each of the Holders who is not deemed to be an "affiliate"
of PPR within the meaning of Rule 144 under the Securities Act, may sell all
of such Holder's shares of PPR Class B Common Stock received in the Exchange
within a three (3) month period under Rule 144, without regard to the volume
limitations contained in Rule 144(e). PPR agrees that the restrictive

A-31
<PAGE>

legend and the stop transfer order on the certificates representing the shares
of PPR Class B Common Stock shall be removed at PPR's expense upon the
registration of such shares under the Securities Act or the sale of such
shares pursuant to Rule 144.

(b) PPR and Delta each agree, as to itself and its Subsidiaries, that none
of the information supplied or to be supplied by it or its Subsidiaries for
inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Proxy Statement and any
amendment or supplement thereto will, at the date of mailing to the PPR
stockholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

(c) PPR shall use its reasonable best efforts to cause "comfort letters" of
Arthur Andersen LLP or another nationally recognized certified public
accounting firm to be delivered to the Holders, dated the date on which the
Registration Statement shall become effective and addressed to the Holders, in
form and substance customary for "comfort letters" delivered by independent
public accountants in connection with transactions such as those contemplated
by this Agreement.

(d) PPR shall use its best efforts to register or qualify the shares covered
by the Registration Statement under such securities or blue sky laws of such
United States jurisdictions as any Holder reasonably requests to enable such
Holder to dispose of such shares owned by such Holder, provided that PPR will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to so qualify but for the
requirements of this paragraph, (ii) subject itself to taxation in any
jurisdiction where it is not otherwise subject to taxation or (iii) consent to
general service of process in any jurisdiction where it would not otherwise be
required to so consent but for the requirements of this paragraph.

(e) PPR shall furnish to each Holder such number of copies of a summary
prospectus or other prospectus in conformity with the requirements of the
Securities Act, and such other documents as such Holder may reasonably request
in order to facilitate the public sale or other disposition of such shares.

(f) PPR shall notify on a timely basis each Holder at any time when a
prospectus relating to the PPR Class B Common Stock is required to be
delivered under the Securities Act within the appropriate period mentioned in
paragraph (a) of this Section, of the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing
and, at the request of such Holder, prepare and furnish to such Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
offerees of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing.

(g) PPR shall make available for inspection by any Holder, any underwriter
participating in any disposition pursuant to such Registration Statement and
any attorney, accountant or other agent retained by any such Holder or
underwriter (collectively, the "Inspectors"), all pertinent financial and
other records, pertinent corporate documents and properties of PPR
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility, and cause PPR's officers,
directors and employees to supply all information (together with the Records,
the "Information") reasonably requested by any such Inspector in connection
with such Registration Statement. Any of the Information, which PPR determines
in good faith to be confidential, and of which determination the Inspectors
are so notified, shall not be disclosed by the Inspectors unless (i) the
disclosure of such Information is necessary to avoid or correct a misstatement
or omission in the Registration Statement, (ii) the release of such
Information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or (iii) such Information has been made generally
available to the public. The

A-32
<PAGE>

Holder agrees that it will, upon learning that disclosure of such Information
is sought in a court of competent jurisdiction, give notice to PPR and allow
PPR, at PPR's expense, to undertake appropriate action to prevent disclosure
of the Information deemed confidential.

(h) PPR shall provide a transfer agent and registrar (which may be the same
entity and which may be PPR) for the PPR Class B Common Stock.

(i) In connection with any registration of the PPR Class B Common Stock
under the Securities Act pursuant to this Agreement, PPR shall indemnify and
hold harmless each Holder, its partners, members, in the case of a limited
liability company, beneficiaries, in the case of a trust, officers and
directors, each underwriter, broker or any other person acting on behalf of
such Holder and each other person, if any, who controls any of the foregoing
persons within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several (or actions in respect thereof) to
which any of the foregoing persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement under which shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or otherwise
filed with the SEC, any amendment or supplement thereto or any document
incident to registration or qualification of the PPR Class B Common Stock or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or, with respect to any prospectus,
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, or any violation by PPR of the Securities
Act or state securities or blue sky laws applicable to PPR and relating to
action or inaction required of PPR in connection with such registration; and
shall reimburse such Holder, such partner, member, officer or director, such
underwriter, such broker or such other person acting on behalf of such Holder
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that PPR shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in said
Registration Statement, preliminary prospectus, final prospectus, amendment,
supplement or document incident to registration or qualification of any PPR
Class B Common Stock in reliance upon and in conformity with written
information furnished to PPR through an instrument duly executed by such
Holder or underwriter that states that it is specifically for use in the
preparation thereof.

(j) In connection with any registration of the PPR Class B Common Stock
under the Securities Act pursuant to this Agreement, each Holder shall
indemnify and hold harmless (in the same manner and to the same extent as set
forth in the preceding paragraph of this Section) PPR, each director of PPR,
each officer of PPR who shall sign such Registration Statement, each
underwriter, broker or other person acting on behalf of such Holder, such
person who controls any of the foregoing persons within the meaning of the
Securities Act and each other Holder under such Registration Statement with
respect to any statement or omission from such Registration Statement, any
preliminary prospectus or final prospectus contained therein or otherwise
filed with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any PPR Class B Common Stock, if
such statement or omission was made in reliance upon and in conformity with
written information furnished to PPR or such underwriter through an instrument
duly executed by such Holder or underwriter that states that it is
specifically for use in connection with the preparation of such Registration
Statement, preliminary prospectus, final prospectus, amendment, supplement or
document; provided, however, that the obligation to indemnify will be several,
not joint and several, among such Holders, and the maximum amount of liability
in respect of such indemnification shall be in proportion to and limited to,
in the case of each Holder, an amount equal to the net proceeds actually
received by such Holder from the sale of PPR Class B Common Stock effected
pursuant to such registration.

(k) The indemnification required by this Section 6.2 will be made by
periodic payments during the course of the investigation or defense, as and
when bills are received or expenses incurred, subject to prompt refund in the
event any such payments are determined not to have been due and owing
hereunder.

A-33
<PAGE>

(l) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 6.2, such indemnified party will, if a claim in
respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled
to participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be responsible
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof; provided, however, that if any
indemnified party shall have reasonably concluded that there may be one or
more legal or equitable defenses available to such indemnified party which are
additional to or conflict with those available to the indemnifying party, or
that such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Section 6.2, the
indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party and such indemnifying party shall
reimburse such indemnified party and any person controlling such indemnified
party for that portion of the fees and expenses of any counsel retained by the
indemnified party which is reasonably related to the matters covered by the
indemnity agreement provided in this Section 6.2. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of any indemnified party.

(m) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any partner, member, officer, director or controlling
person of such indemnified party and will survive the transfer of the PPR
Class B Common Stock.

(n) If the indemnification provided for in this Section 6.2 is held by a
court of competent jurisdiction to be unavailable to any indemnified party
with respect to any loss, claim, damage, liability or action referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions which resulted in such loss,
claim, damage or liability as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and the
indemnified party shall be determined by reference to among other things
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by an indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. PPR and the Holders agree that it would
not be just and equitable if contributions pursuant to this paragraph were
determined by pro rata allocation or by other method of allocation which did
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to above shall be deemed to
include any legal or other expenses reasonably incurred in connection with
investigating or defending the same. Notwithstanding the foregoing, in no
event shall the amount contributed by a Holder exceed the aggregate net
offering proceeds received by such Holder from the sale of such Holder's PPR
Class B Common Stock.

Section 6.3 Access to Information and Properties. Subject to currently
existing contractual and legal restrictions applicable to PPR or to Delta or
any of their Subsidiaries, each of PPR and Delta shall, and shall cause each
of the PPR and Delta Subsidiaries to, afford to the consultants, accountants,
counsel, financial advisors and other representatives of PPR and Delta
reasonable access to, and permit them to make such inspections and
investigations (including, without limitation, environmental audits,
assessments and sub-surface investigations) as they may

A-34
<PAGE>

reasonably require of, at mutually agreed upon times during normal business
hours during the period from the date of this Agreement through the effective
date of the Registration Statement, all their respective properties, books,
contracts, commitments and records (including, without limitation, the work
papers of independent accountants, if available and subject to the consent of
such independent accountants) and, during such period, PPR and Delta shall,
and shall cause each of the PPR and Delta Subsidiaries to, furnish promptly to
the other (i) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of
federal or state securities laws and (ii) all other information concerning its
business, properties and personnel as the other may reasonably request.

Section 6.4 New Credit Facility. PPR shall use its reasonable best efforts
to obtain a credit facility of up to $160 million on terms reasonably
acceptable to PPR (the "New Credit Facility"). The purposes of the New Credit
Facility shall include payment of certain debt owed by Delta, PPR and Dakota,
along with financing for working capital and acquisitions.

Section 6.5 [This section intentionally left blank]

Section 6.6 NYSE Listing. PPR shall use its reasonable best efforts to cause
the shares of PPR Class B Common Stock to be issued in connection with the
Exchange to be approved for listing on the NYSE, subject to official notice of
issuance.

Section 6.7 Fees and Expenses. Whether or not the Exchange is consummated,
and except as otherwise provided in Section 8.2, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby including, without limitation, the fees and disbursements of counsel,
financial advisors and accountants, shall be paid by the party incurring such
costs and expenses; provided, however, that PPR shall pay all expenses
incurred by PPR in complying with this Article 6, including, without
limitation, all registration and filing fees (including all expenses incident
to filing with the NYSE), fees and expenses of complying with securities and
blue sky laws, printing expenses, and fees and expenses of PPR's counsel and
accountants; provided, further, that all underwriting discounts, fees and
expenses of counsel for the Holders and selling commissions applicable to the
PPR Class B Common Stock, if any, shall be borne by the Holders in proportion
to the number of shares of PPR Class B Common Stock sold by such Holder.

Section 6.8 Delta Senior Noteholders. Within thirty (30) days after Closing,
Delta shall provide written notice of the consummation of the transaction
which is the subject of this Agreement to the holders of the 9 3/4% Senior
Notes due 2003 as required under the Indenture dated as of December 17, 1996
related thereto and advise such holders of their right to require Delta to
redeem their notes at 101% of par.

Section 6.9 Reasonable Best Efforts to Consummate the Exchange. Upon the
terms and subject to the conditions set forth in this Agreement, PPR and Delta
agree to use reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to
consummate, in the most expeditious manner practicable, the Exchange and the
other transactions contemplated by this Agreement, including, but not limited
to: (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from all Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to obtain
an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals
or waivers from third parties, (iii) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby,
including seeking to have any stay or temporary restraining order entered by
any court or other Governmental Entity vacated or reversed, and (iv) the
execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement. Each Delta Stockholder agrees
that, to the extent reasonably requested by Delta or PPR, such Delta
Shareholder shall assist and cooperate with PPR and/or Delta in taking all
such actions which may be reasonable and necessary to consummate the Exchange,
including, without limitation, providing such information or documentation
that PPR shall reasonably require in connection with the issuance of shares
hereunder pursuant to

A-35
<PAGE>

exemptions from registration under the Securities Act or relevant state
securities laws. No party to this Agreement shall consent to any voluntary
delay of the consummation of the Exchange at the behest of any Governmental
Entity without the consent of the other parties to this Agreement, which
consent shall not be unreasonably withheld.

Section 6.10 Public Announcements. Delta and PPR each shall consult with the
other prior to issuing any press releases or otherwise making public
announcements with respect to the Exchange and the other transactions
contemplated by this Agreement and prior to making any filings with any third
party and/or any Governmental Entity with respect thereto, except as may be
required by law or by obligations pursuant to any listing agreement with or
rules of the NYSE.

Section 6.11 State Takeover Laws. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute
or regulation shall become applicable to the transactions contemplated hereby,
PPR and Delta and their respective Board of Directors shall use their
reasonable best efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
minimize the effects of any such statute or regulation on the transactions
contemplated hereby.

Section 6.12 Indemnification. From and after the Closing, PPR agrees to, and
to cause Delta to, indemnify and hold harmless all past and present officers
and directors of Delta and of the Delta Subsidiaries to the maximum extent
permitted by the Delaware General Corporation Law (including advancing
expenses and attorneys' fees incurred prior to final disposition of any
proceeding upon receipt of an undertaking by such director or officer to repay
such amount if it shall be ultimately determined that he or she is not
entitled to be indemnified under the Delaware General Corporation Law),
including but not limited to acts or omissions occurring in connection with
the approval of this Agreement, the filing of the Registration Statement and
the consummation of the transactions contemplated hereby.

Section 6.13 Notification of Certain Matters. PPR shall use its reasonable
best efforts to give prompt notice to Delta, and Delta shall use its
reasonable best efforts to give prompt notice to PPR, of: (i) the occurrence,
or non-occurrence, of any event the occurrence, or non-occurrence, of which it
is aware and which would be reasonably likely to cause (x) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect or (y) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied in all material respects, (ii)
any failure of PPR or Delta, as the case may be, to comply in a timely manner
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder or (iii) any change or event which would be
reasonably likely to have a Material Adverse Effect on PPR or Delta, as the
case may be; provided, however, that the delivery of any notice pursuant to
this Section 6.13 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.

Section 6.14 Transfer Taxes. All transfer, documentary, sales, use,
registration, value-added and other similar Taxes (including all applicable
real estate transfer Taxes) and related fees (including any penalties,
interest an additions to Tax) (collectively, "Transfer Taxes") incurred by any
party hereto in connection with this Agreement and the transactions
contemplated hereby shall be shared equally by Delta and PPR; provided,
however, that each Delta Stockholder shall pay and hold PPR and Delta harmless
from any Transfer Taxes and related penalties and additions that would not
have arisen but for the negligence of such Delta Stockholder. PPR and the
Delta Stockholders shall cooperate in timely making all filings, returns,
reports and forms as may be required to comply with the provisions of such
Transfer Tax laws.

Section 6.15 Treatment of Delta Phantom Stock Plan Participants. The
existing Delta phantom stock plan will be amended, promptly following the
Closing, to increase the value of the participants' interest to reflect the
value of the transaction contemplated by this Agreement and to convert the
rights of participants under such phantom stock plan to a combination of PPR
Class B Common Stock and/or options to acquire PPR Class B Common Stock.

Section 6.16 Title Commitments. Delta and PPR shall promptly (and in no
event more than ten (10) days after the date hereof), order from a title
company reasonably acceptable to the other (the "Title Company") a title

A-36
<PAGE>

insurance commitment or commitments with respect to all of the Delta Owned
Real Property and the PPR Owned Real Property, as the case may be, other than
those properties for which the owner already has title insurance. Delta and
PPR shall use their respective reasonable efforts to cause the Title Company
to issue the title commitments as promptly as feasible and, immediately upon
receipt thereof, shall deliver such title commitments to the other. To the
extent the recipient reasonably objects to any matter(s) reflected therein
other than Permitted Exceptions, or requests additional information with
respect thereto, the party delivering the title commitments shall use its
reasonable efforts to cause the Title Company to modify and/or supplement the
commitments accordingly. Delta shall, and shall cause the Delta Subsidiaries
to, reasonably cooperate with PPR in the event that PPR undertakes to purchase
title insurance and/or order surveys with respect to any or all of the Delta
Real Property.

Section 6.17 Delta Preferred Stock Dividends. PPR agrees from and after the
Closing, with respect to the stock dividends accruing on the Delta Preferred
from and after October 2, 1999, to either (a) cause Delta to pay the quarterly
dividends, in cash, owed on the Delta Preferred or (b) make a contribution to
the capital of Delta in an amount sufficient to redeem Preferred Stock Series
AA shares issued as a dividend on the Delta Preferred from and after October
2, 1999 and cause Delta to redeem such shares, in cash, promptly after such
shares are issued to the holders of Delta Preferred.

Section 6.18 Independent Directors. From and after the Closing, Pohlad
Companies and Pepsi-Cola Metropolitan Bottling Company, Inc. ("Metropolitan")
shall take all action within their respective power, and, for so long as they
are members of Dakota, LLC, shall cause Dakota, LLC to take all action within
its power, including but not limited to the voting of all shares of PPR Class
A Common Stock and PPR Class B Common Stock owned by them, required to cause
at least two of the directors on the Board of Directors of PPR not to be
"affiliates" (as such term is defined in Rule 405 of the Securities Act of
1933, as amended) (all such directors hereinafter referred to as the
"Independent Directors") of Pohlad Companies or Metropolitan for so long as
Dakota, LLC, Pohlad Companies, Metropolitan or any of their affiliates,
collectively or individually, hold(s) a majority of the voting rights of the
outstanding capital stock of PPR. If Metropolitan transfers its membership
interests in Dakota, LLC, or any of the PPR capital stock which it is
acquiring pursuant to this Agreement, to PepsiCo or an affiliate of PepsiCo,
then Metropolitan shall cause such transferee to assume Metropolitan's
obligations under this Section 6.18 and Section 6.19 as a condition precedent
to such transfer. If Pohlad Companies transfers its membership interests in
Dakota, LLC, or any of the PPR capital stock which it is acquiring pursuant to
this Agreement, to an affiliate of Pohlad Companies, then Pohlad Companies
shall cause such transferee to assume Pohlad Companies' obligations under this
Section 6.18 and Section 6.19 as a condition precedent to such transfer.

Section 6.19 Transactions with Affiliates. Until June 15, 2003, Pohlad
Companies and Metropolitan agree not to cause, directly or indirectly, PPR or
any PPR Subsidiary to make any payment to, or sell, lease, transfer,
substitute or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, directly or indirectly, any "affiliate" (as such
term is defined in Rule 405 of the Securities Act of 1933, as amended),
officer, director or employee (each an "Affiliate") of Pohlad Companies or
Metropolitan (each of the foregoing an "Affiliate Transaction") which
Affiliate Transaction, together with any related Affiliated Transaction(s),
involves aggregate consideration in excess of $500,000, unless such Affiliate
Transaction is on terms that are no less favorable to PPR or the relevant PPR
Subsidiary than those that would have been obtained in a comparable
transaction by PPR or such PPR Subsidiary with an unrelated person and such
Affiliate Transaction shall receive the approval of a majority of the
Independent Directors. This Section 6.19 shall not apply to transactions
entered into in the course of business between an Affiliate of Metropolitan as
licensor and PPR or a PPR Subsidiary as licensee.

Section 6.20 Lock-Up Agreement. All Delta Stockholders shall execute a Lock-
Up Agreement in the form attached hereto as Exhibit B which shall prohibit
sale of PPR Class B Connon Stock for a period of six (6) months after the
Closing Date.

A-37
<PAGE>

ARTICLE VII

CONDITIONS PRECEDENT TO CLOSING

Section 7.1 Conditions to Each Party's Obligation to Effect the
Exchange. The respective obligations of each party to effect the Exchange
shall be subject to the fulfillment at or prior to the Closing of the
following conditions, each of which may be waived only with the consent in
writing of each party not obligated to satisfy the condition.

(a) PPR Stockholder Approval. This Agreement and the transactions
contemplated hereby, including the Share Issuance, the Exchange, the PPR
Charter Amendment and the PPR Option Plan Amendments shall have been duly
approved by the requisite vote of stockholders of PPR in accordance with
applicable law and the Certificate of Incorporation and Bylaws of PPR.

(b) Listing on the NYSE. The PPR Class B Common Stock issuable in the
Exchange shall have been authorized for listing on the NYSE upon official
notice of issuance.

(c) Governmental Approvals. All authorizations, consents, orders,
declarations or approvals of, or filings with, any Governmental Entity,
which the failure to obtain, make or occur would have the effect of making
the Exchange or any of the transactions contemplated hereby illegal or
would have a Material Adverse Effect on either of PPR or Delta (assuming
the Exchange had taken place), shall have been obtained or shall have been
made.

(d) Litigation. There shall not be instituted or pending any suit, action
or proceeding by a Governmental Entity or any other person as a result of
this Agreement or any of the transactions contemplated herein which would
have a Material Adverse Effect on either PPR or Delta (assuming for
purposes of this paragraph (d) that the Exchange shall have occurred).

(e) No Order. No court or other Governmental Entity having jurisdiction
over Delta or PPR, or any of their respective Subsidiaries, shall have
enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the
effect of making this Agreement, the Exchange or any of the transactions
contemplated hereby illegal.

(f) Dakota Acquisition. The Dakota Acquisition shall have been
consummated or shall be completed simultaneously with the completion of the
Exchange, on substantially the terms set forth in the Dakota Exchange
Agreement (as hereinafter defined) without giving effect to any waiver or
modification thereof.

(g) New Credit Facility. The New Credit Facility shall have been
obtained.

(h) Lock-Up Agreement. All Delta Stockholders shall have executed a Lock-
Up Agreement in the form attached hereto as Exhibit B which shall prohibit
sale of PPR Class B Common Stock for a period of six (6) months after the
Closing Date.

Section 7.2 Conditions to Obligation of the Delta Stockholders to Effect the
Exchange. The obligation of the Delta Stockholders to effect the Exchange
shall be subject to the fulfillment at or prior to the Closing of the
following additional conditions, each of which may be waived by the Delta
Stockholders in writing:

(a) Performance of Obligations; Representations and Warranties. PPR shall
have performed in all material respects each of its agreements contained in
this Agreement required to be performed on or prior to the date of Closing,
each of the representations and warranties of PPR contained in this
Agreement that is qualified by materiality shall be true and correct on and
as of the date of Closing as if made on and as of such date (other than
representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date) and each of
the representations and warranties that is not so qualified shall be true
and correct in all material respects on and as of the date of Closing as if
made on and as of such date (other than representations and warranties
which address matters only as of a certain date which shall be true and
correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement, and the Delta
Stockholders shall have received a certificate signed on behalf of PPR by
its Chief Executive Officer and its Chief Financial Officer to such effect.

A-38
<PAGE>

(b) Opinion of Counsel. The Delta Stockholders shall have received an
opinion of Willkie Farr & Gallagher, counsel to the PPR Special Committee,
in form and substance reasonably satisfactory to the Delta Stockholders,
dated the date of Closing, subject to customary qualifications and
limitations for opinions given in transactions of the kind contemplated
hereby, to the effect that PPR is in good standing under the laws of
Delaware and the PPR Class B Common Stock to be issued in the Exchange has
been duly authorized, validly issued, is not subject to further assessment,
and has been issued pursuant to applicable exemptions from registration
under the Securities Act.

(c) Execution of Registration Rights Agreement. The Registration Rights
Agreement in the form attached hereto as Exhibit C shall have been executed
and delivered to Pohlad Companies by PPR.

(d) Consents. The consents, waivers, approvals and authorizations set
forth on Schedule 7.2(d) hereto shall have been obtained.

(e) Miller Brewing Company Waiver. Delta shall have obtained a waiver of
the ownership requirement through December 31, 1999 from Miller Brewing
Company.

(f) Payment of Notes. The Delta Subordinated Notes shall be paid in full,
in cash, at par, together with all accrued interest thereon through the
date of Closing and such payment shall take place simultaneously with the
Closing.

(g) Tax Opinion. Those holders of Delta Stock who exchanged such Delta
Stock for PPR Class B Common Stock (the "Exchanging Stockholders") shall
have received an opinion of Arthur Andersen LLP, or another nationally-
recognized independent accountant at PPR's election (the "Accountant"), in
form and substance reasonably satisfactory to the Delta Stockholders, dated
the date of Closing, substantially to the effect that on the basis of
facts, representations and assumptions set forth in such opinion which are
consistent with the state of facts existing as of the date of Closing, for
federal income tax purposes:

(i) The Exchange should qualify as a nontaxable transfer of property
by Exchanging Stockholders in exchange for PPR Class B Common Stock
under Section 351 of the Code.

(ii) No gain or loss should be recognized by the Exchanging
Stockholders upon the exchange of the Delta Stock solely for PPR Class
B Common Stock pursuant to the Exchange.

(iii) If a holder of Delta Stock receives only PPR Class B Common
Stock in the Exchange, such holder's basis in the PPR Class B Common
Stock received in the exchange should be the same as the basis of Delta
Stock surrendered in the Exchange assuming there are no liabilities
assumed by PPR in connection therewith.

(iv) The holding period of the PPR Class B Common Stock received by
an Exchanging Stockholder pursuant to the Exchange should include the
period during which Delta Stock surrendered in the Exchange was held,
provided that Delta Stock surrendered was a capital asset on the date
of the Exchange.

In rendering such opinion, the Accountant may receive and rely upon
representations from PPR, Delta, Dakota and the Delta Stockholders.

(h) Amendment to Delta's Certificate of Incorporation. Delta's
Certificate of Incorporation shall be amended to eliminate (i) the Fourth
Section, paragraphs 3 and 4, (ii) the Fifth Section, (iii) the Sixth
Section, paragraph 3, and (iv) the Seventh Section.

Section 7.3 Conditions to Obligations of PPR to Effect the Exchange. The
obligations of PPR to effect the Exchange shall be subject to the fulfillment
at or prior to the date of Closing of the following additional conditions,
each of which may be waived by PPR in writing:

(a) Performance of Obligations; Representations and Warranties. Delta and
the Delta Stockholders shall have performed in all material respects each
of their agreements contained in this Agreement required to be performed by
them on or prior to the date of Closing, each of the representations and
warranties of Delta and the Delta Stockholders contained in this Agreement
that is qualified by materiality shall be true and correct

A-39
<PAGE>

on and as of the date of Closing as if made on and as of such date (other
than representations and warranties which address matters only as of a
certain date which shall be true and correct as of such certain date) and
each of the representations and warranties that is not so qualified shall
be true and correct in all material respects on and as of the date of
Closing as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be
true and correct in all material respects as of such certain date), in each
case except as contemplated or permitted by this Agreement, and PPR shall
have received a certificate signed on behalf of Delta by its Chief
Executive Officer and its Chief Financial Officer to such effect.

(b) Consents. The consents, waivers, approvals and authorizations set
forth on Schedule 7.3 (b) hereto shall have been obtained.

(c) Opinion of Counsel. PPR shall have received an opinion of counsel to
Delta in form and substance reasonably satisfactory to PPR, dated the
Closing Date, subject to customary qualifications, limitations and
qualifications for opinions given in transactions of the kind contemplated
hereby, to the effect that Delta is duly organized, validly existing and in
good standing under the laws of Delaware.

(d) Dakota Representations and Warranties. The representations and
warranties of Dakota and Pohlad Companies contained in the Exchange
Agreement by and among PPR, Dakota and Pohlad Companies (the "Dakota
Exchange Agreement") shall be true and correct in all material respects
without respect to any waiver of or modification to such representations
and warranties by the parties to the Dakota Exchange Agreement.

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

Section 8.1 Termination. This Agreement may be terminated at any time prior
to the Closing, whether before or after any approval of the matters presented
in connection with the Exchange by the stockholders of PPR:

(a) by mutual written consent of PPR, Delta and all of the Delta
Stockholders;

(b) by either PPR on the one hand, or Delta or the Delta Stockholders on
the other hand, if the other party shall have failed to comply in any
material respect with any of its covenants or agreements contained in this
Agreement required to be complied with prior to the date of such
termination, which failure to comply has not been cured within five (5)
business days following receipt by such other party of written notice of
such failure to comply; provided, however, that if any such breach is
curable by the breaching party through the exercise of the breaching
party's best efforts and for so long as the breaching party shall be so
using its best efforts to cure such breach, the non-breaching party may not
terminate this Agreement pursuant to this paragraph;

(c) by either PPR on the one hand, or Delta or the Delta Stockholders on
the other hand, if there has been (i) a breach by the other party of any
representation or warranty that is not qualified as to materiality which
has the effect of making such representation or warranty not true and
correct in all material respects or (ii) a breach by the other party of any
representation or warranty that is qualified as to materiality, in each
case which breach has not been cured within five (5) business days
following receipt by the breaching party of written notice of the breach or
except as contemplated or permitted by this Agreement; provided, however,
that if any such breach is curable by the breaching party through the
exercise of the breaching party's best efforts and for so long as the
breaching party shall be so using its best efforts to cure such breach, the
non-breaching party may not terminate this Agreement pursuant to this
paragraph;

(d) by PPR on the one hand, or Delta or the Delta Stockholders holding,
in aggregate, a majority of the Delta Stock on the other hand, if the
Exchange has not been effected on or prior to the close of business on
November 30, 1999 (the "Termination Date"); provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(d) shall not
be available to any party whose failure to fulfill any of its obligations
contained in this Agreement has been the cause of, or resulted in, the
failure of the Exchange to have occurred on or prior to the aforesaid date;

A-40
<PAGE>

(e) by PPR on the one hand, or Delta or the Delta Stockholders on the
other hand, if the stockholders of PPR do not approve this Agreement and
the transactions contemplated hereby, including, the Share Issuance, the
Exchange and the PPR Charter Amendment at the PPR Stockholder Meeting or
any adjournment or postponement thereof; or

(f) by PPR on the one hand, or Delta or the Delta Stockholders on the
other hand, if: (i) there shall be a final, non-appealable order of a
federal or state court in effect preventing consummation of the
transactions contemplated hereby; or (ii) there shall be any final action
taken, or any statute, rule, regulation or order enacted, promulgated or
issued or deemed applicable to the transactions contemplated hereby by any
Governmental Entity which would make consummation of the transactions
contemplated hereby illegal.

The right of any party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.

Section 8.2 Effect of Termination. In the event of termination of this
Agreement by either PPR, Delta or the Delta Stockholders, as provided in
Section 8.1, this Agreement shall forthwith terminate and there shall be no
liability hereunder on the part of the Delta Stockholders, Delta, PPR, or
their respective officers or directors (except for the entirety of Section
6.7, which shall survive the termination); provided, however, that nothing
contained in this Section 8.2 shall relieve any party hereto from any
liability for any breach of a representation or warranty contained in this
Agreement or the breach of any covenant contained in this Agreement; provided,
further, that in addition to any other remedies available to any party under
this Agreement or at law or in equity, in the event that the Exchange does not
occur as a direct result of breach of this Agreement by a party hereto, the
breaching party shall be responsible for all costs and expenses incurred in
connection with the transactions contemplated hereby by the non-breaching
party including, but not limited to, the fees and disbursements of all legal,
accounting, financial and other advisers.

Section 8.3 Amendment. This Agreement may be amended by the parties hereto
at any time before or after approval of the matters presented in connection
with the Exchange by the stockholders of PPR, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.

Section 8.4 Waiver. At any time prior to the Closing, the parties hereto may
(i) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.

ARTICLE IX

GENERAL PROVISIONS

Section 9.1 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall terminate at the Closing
or upon the termination of this Agreement pursuant to Section 8.1, as the case
may be, and no claim for breach of any such representation, warranty or
agreement may be made after Closing or termination of this Agreement, as the
case may be, except that (i) Article I shall survive the Closing; (ii) the
representations and warranties of PPR set forth in Sections 2.1, 2.2, 2.3 and
2.4 and the representations and warranties of the Delta Stockholders set forth
in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 and 4.7 shall survive the Closing
indefinitely; and (iii) the agreements set forth in Sections 6.2, 6.3, 6.6,
6.7, 6.8, 6.9, 6.12, 6.13, 6.14, 6.15, 6.17, 6.18 and 6.19

A-41
<PAGE>

and this Article IX shall survive the Closing, and those set forth in Sections
6.7 and 8.2 and this Article IX shall survive termination.

Section 9.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered personally, one day after
being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

(a) if to PPR, to: Pepsi-Cola Puerto Rico Bottling Company
P.O. Box 191709
Carr. 865 km 0.4
Barrio Candelaria Arenas
Toa Baja, PR 00949
Attn: President

with a copy to: Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
Attn: Christopher E. Manno, Esq.

(b) if to Delta, to Delta Beverage Group, Inc.
3880 Dain Rauscher Plaza
60 South Sixth Street
Minneapolis, MN 55402

(d) And, in all cases, a copy to:
Pohlad Companies
3880 Dain Rauscher Plaza
60 South Sixth Street
Minneapolis, MN 55402
Attn: Robert C. Pohlad

with a further copy to: Briggs and Morgan, P.A.
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Attn: Brian D. Wenger, Esq.

Section 9.3 Interpretation. When a reference is made in this Agreement to a
Section or Article, such reference shall be to a Section or Article of this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."

Section 9.4 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties.

Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder, except
as set forth in Sections 6.2, 6.12 and except that Section 6.17 shall inure to
the benefit of any transferee of the Delta Preferred.

A-42
<PAGE>

Section 9.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT THEREOF.

Section 9.7 Assignment. Except for the registration provisions set forth in
Section 6.2, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties, except that Pohlad Companies and Metropolitan may assign their
interests under this agreement and any related agreement to Dakota, LLC, a
Delaware limited liability company ("Dakota, LLC"), which Pohlad Companies
will cause to be formed pursuant to the terms and conditions of the Dakota
Exchange Agreement. This Agreement shall inure to the benefit of, and shall be
binding upon, the successors and permitted assigns of the parties hereto and
Section 6.17 shall inure to the benefit of any transferee of the Delta
Preferred.

Section 9.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent
possible.

Section 9.9 Enforcement of this Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of
the United States or any state having jurisdiction, such remedy being in
addition to any other remedy to which any party is entitled under this
Agreement at law or in equity. Each party hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the United
States District Court located in the State of Delaware (unless such courts
assert no jurisdiction, in which case each party consents to the exclusive
jurisdiction of the courts of the State of Delaware) for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and each party hereto agrees not to commence any action,
suit or proceeding relating thereto except in such courts), and further agrees
that service of any process, summons, notice or document by U.S. registered
mail to the addresses set forth herein shall be effective service of process
for any such action, suit or proceeding brought against the each party in such
court. Each party hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby, in the United
States District Courts located in the State of Delaware (unless such courts
assert no jurisdiction, in which case each party consents to the exclusive
jurisdiction of the courts of the State of Delaware). Each party hereby
further irrevocably and unconditionally waives and agrees not to plead or to
claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.

Section 9.10 Rule of Construction. The parties acknowledge and agree that
each has negotiated and reviewed the terms of this Agreement, assisted by such
counsel as they desired, and has contributed to its revisions. The parties
further agree that the rule of construction that any ambiguities are resolved
against the drafting party will be subordinated to the principle that the
terms and provisions of this Agreement will be construed fairly as to all
parties and not in favor of or against any party.

Section 9.11 Effect of Execution. The execution of this Agreement by each of
the Delta Stockholders shall be deemed to be: (a) a consent to the transaction
contemplated by this Agreement in their capacities as an owner of Delta Stock
and Delta Preferred and (b) a consent to the transaction contemplated by this
Agreement to the extent

A-43
<PAGE>

required under the Delta Certificate of Incorporation, the Delta by-laws, any
other governing or organizational document, or any agreement between or among
any Delta Stockholders and/or Delta (including, without limitation, the
Amended and Restated Shareholder's Agreement dated as of September 23, 1993).
Additionally, if requested by Delta or PPR, each of the Delta Stockholders
agrees to execute and deliver, without requirement of additional
consideration, such other or additional documents, instruments, agreements or
consents necessary to effectuate the foregoing transaction.

Section 9.12 Rights Under Amended and Restated Shareholder's Agreement. The
Delta Stockholders agree that Pohlad Companies may, at Pohlad Companies' sole
discretion, assign its rights under the Amended and Restated Shareholder's
Agreement dated as of September 23, 1993 to PPR or Delta. The Delta
Stockholders further agree that Sections 2, 3, 7 and 9 of such agreement shall
be of no further force and effect as of the Closing.

Section 9.13 Termination of Amended and Restated Co-Sale Agreement. The
Delta Stockholders hereby agree that the Amended and Restated Co-Sale
Agreement entered into by the stockholders of Delta as of September 23, 1993,
is terminated and of no further force and effect as of the Closing.

Section 9.14 Amendment to Delta's Certificate of Incorporation. The Delta
Stockholders shall cause the amendment to the Delta's Certificate of
Incorporation referenced in Section 7.2(h) to become effective on or prior to
the Closing.

[THIS SPACE INTENTIONALLY LEFT BLANK]

A-44
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed or have caused this
Agreement to be executed by their respective duly authorized officers all as
of the date first written above.

PEPSI-COLA PUERTO RICO BOTTLING
COMPANY

/s/ John F. Bierbaum
By: _________________________________
Name: John F. Bierbaum
Title:Chief Financial Officer,
Vice President

Only as to Articles 1, 3, 8 and 9
and Sections 5.2, 6.2(b), 6.3, 6.7,
6.8-6.16, 7.1(c), (d) and (e),
7.2(e), (f), (g) and (h) and 7.3(a),
(b) and (c)

DELTA BEVERAGE GROUP, INC.

/s/ Robert C. Pohlad
By: _________________________________
Name: Robert C. Pohlad
Title:Chief Executive Officer

A-45
<PAGE>

DELTA STOCKHOLDERS

<TABLE>
<CAPTION>
No. of Shares
---------------------------------------
Common Non-Voting Preferred Stock
Name Stock Common Stock Series AA
---- --------- ------------ ---------------

<S> <C> <C> <C>
POHLAD COMPANIES 12,037.87

/s/ Robert C. Pohlad
By: ____________________________________________
Its: President

/s/ Robert C. Pohlad
________________________________________________
Robert C. Pohlad 100.00

/s/ William M. Pohlad
________________________________________________
William M. Pohlad 100.00

/s/ James O. Pohlad
________________________________________________
James O. Pohlad 100.00

PEPSI-COLA METROPOLITAN BOTTLING COMPANY, INC. 3,221.57

/s/ W. Timothy Heaviside
By: ____________________________________________
Its: Vice President

ARBEIT INVESTMENT LIMITED PARTNERSHIP 4,187.92

By: Adler Management Corporation
Its: General Partner

/s/ John H. Agee
By: ____________________________________________
Its: President

/s/ Kenneth E. Keiser
________________________________________________
Kenneth E. Keiser 532.51

/s/ John F. Bierbaum
________________________________________________
John F. Bierbaum 22.00
</TABLE>
***SIGNATURE PAGE TO EXCHANGE AGREEMENT***

A-46
<PAGE>

<TABLE>
<CAPTION>
No. of Shares
-----------------------------------
Common Non-Voting Preferred Stock
Name Stock Common Stock Series AA
---- ------ ------------ ---------------

<S> <C> <C> <C>
U.S. BANCORP (F/K/A FIRST BANK SYSTEM, INC.) 469.99

/s/ Susan E. Lester
By: ____________________________________________
Its: Chief Financial Officer

THE MORGAN STANLEY LEVERAGED MEZZANINE FUND, L.P. 4,236.17 2,102.835

/s/ Morgan Stanley Leveraged Capital Fund, Inc.
By: _____________________________________________
Its General Partner

/s/ Kenneth F. Clifford
By: _____________________________________________
Its: Vice President, CFO and Treasurer

By CIGNA Funding Limited Partnership,
A General Partner

By CIGNA Leveraged Capital Fund, Inc.,
Its General Partner

/s/ Maurice A. Gordon
By: _____________________________________________
Maurice A. Gordon
Its: Vice President

MASSACHUSETTS MUTUAL LIFE INSURANCE CO. 5,476.63

/s/ Steven J. Katz
By: _____________________________________________
Its: Second Vice President &
Associate General Counsel

MASS MUTUAL CORPORATE INVESTORS 966.43

/s/ Robert Joyal
By: _____________________________________________
Its: Senior Vice President

THE NORTHWESTERN MUTUAL LIFE INSURANCE CO. 9,357.30 1,874.147

/s/ Richard A. Strait
By: _____________________________________________
Its: Authorized Representative
</TABLE>
***SIGNATURE PAGE TO EXCHANGE AGREEMENT***

A-47
<PAGE>

<TABLE>
<CAPTION>
No. of Shares
-----------------------------------
Common Non-Voting Preferred Stock
Name Stock Common Stock Series AA
---- ------ ------------ ---------------

<S> <C> <C> <C>
CIGNA PROPERTY & CASUALTY INS. CO. 306.20
(CIG & CO.)

/s/ James R. Kuzemchak
By: _____________________________________________
James R. Kuzemchak
Its: Investment Officer

CONNECTICUT GENERAL LIFE INSURANCE CO. 3,283.26 1,420.81
(CIG & CO.)

/s/ James R. Kuzemchak
By: _____________________________________________
James R. Kuzemchak
Its: Assistant Vice President

INSURANCE COMPANY OF NORTH AMERICA 3,904.00
(CIG & CO.)

By: CIGNA Investments, Inc.

/s/ Richard B. McGauley
By: _____________________________________________
Richard B. McGauley
Its: Managing Director

NORWEST VENTURE CAPITAL MANAGEMENT, INC. 3,865.95

/s/ John E. Lindahl
By: _____________________________________________
Its: Vice President

FIRST COLONY LIFE INSURANCE CO. 100.20

/s/ Greg M. Card
By: _____________________________________________
Its: Assistant Vice President & Investment
Officer

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY 1,290.00 543.44

By: Lincoln Investment Management, Inc.
Its Attorney-in-Fact

/s/ R. Gordon Marsh
By: _____________________________________________
Its: Vice President
</TABLE>
***SIGNATURE PAGE TO EXCHANGE AGREEMENT***

A-48
<PAGE>

APPENDIX B
DAKOTA EXCHANGE AGREEMENT

June 28, 1999

B-1
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I -- PRE-CLOSING TRANSACTIONS................................... B-6
Section 1.1 Formation of DakBev and Subsidiaries of DakBev......... B-6
Section 1.2 Merger of DakBev and Dakota............................ B-6
Section 1.3 Merger of the Wholly Owned Corporations into the DakBev
LLCs................................................... B-6
Section 1.4 Formation of Dakota, LLC............................... B-6
Section 1.5 Contributions to Dakota, LLC........................... B-6

ARTICLE II -- THE EXCHANGE.............................................. B-6
Section 2.1 The Exchange........................................... B-6
Section 2.2 Exchange Procedures.................................... B-6
Section 2.3 Closing................................................ B-7

ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF PPR.................... B-7
Section 3.1 Organization, Standing and Power....................... B-7
Section 3.2 Capital Structure...................................... B-7
Section 3.3 Authority.............................................. B-8
Section 3.4 Consents and Approvals; No Violation................... B-9
Section 3.5 SEC Documents and Other Reports........................ B-9
Section 3.6 Absence of Certain Changes............................. B-10
Section 3.7 Permits; Compliance and Contracts...................... B-11
Section 3.8 Tax Matters............................................ B-11
Section 3.9 Actions and Proceedings................................ B-12
Section 3.10 Certain Agreements..................................... B-12
Section 3.11 Employee Benefit Matters............................... B-12
Section 3.12 Compliance with Environmental Laws..................... B-14
Section 3.13 Labor Matters.......................................... B-15
Section 3.14 Intellectual Property.................................. B-15
Section 3.15 Title to Assets; Insurance............................. B-15
Section 3.16 Real Property.......................................... B-15
Section 3.17 Title Insurance........................................ B-17
Section 3.18 Zoning................................................. B-17
Section 3.19 Brokers................................................ B-17
Section 3.20 Relationships.......................................... B-17
Section 3.21 Compliance with Quality Standards...................... B-17
Section 3.22 Year 2000 Compliance................................... B-17
Section 3.23 Delaware Business Combination Statute.................. B-18
Section 3.24 Disclosure............................................. B-18

ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF DAKOTA.................. B-18
Section 4.1 Organization, Standing and Power....................... B-18
Section 4.2 Capital Structure...................................... B-18
Section 4.3 Authority.............................................. B-19
Section 4.4 Consents and Approvals; No Violation................... B-19
Section 4.5 Financial Statements................................... B-20
Section 4.6 Absence of Certain Changes or Events................... B-20
Section 4.7 Permits; Compliance and Contracts...................... B-21
Section 4.8 Tax Matters............................................ B-22
Section 4.9 Actions and Proceedings................................ B-22
Section 4.10 Certain Agreements..................................... B-23
</TABLE>

B-2
<PAGE>

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 4.11 Employee Benefit Matters............................... B-23
Section 4.12 Compliance with Environmental Laws..................... B-24
Section 4.13 Indebtedness........................................... B-25
Section 4.14 Labor Matters.......................................... B-25
Section 4.15 Intellectual Property.................................. B-25
Section 4.16 Title to Assets; Insurance............................. B-26
Section 4.17 Real Property.......................................... B-26
Section 4.18 Title Insurance........................................ B-27
Section 4.19 Zoning................................................. B-27
Section 4.20 Brokers................................................ B-27
Section 4.21 Relationships.......................................... B-27
Section 4.22 Compliance with Quality Standards...................... B-28
Section 4.23 Year 2000 Compliance................................... B-28
Section 4.24 Disclosure............................................. B-28

ARTICLE V -- REPRESENTATIONS AND WARRANTIES OF POHLAD................... B-28
Section 5.1 Organization; Title; Authority......................... B-28
Section 5.2 No Breach.............................................. B-28
Section 5.3 No Consents............................................ B-29
Section 5.4 Entire Interest........................................ B-29
Section 5.5 Accredited Investor Status; PPR Information............ B-29
Section 5.6 Unregistered Securities; Investment Intent............. B-29
Section 5.7 Restrictions on Transfer............................... B-29

ARTICLE VI -- COVENANTS RELATING TO CONDUCT OF BUSINESS................. B-29
Section 6.1 Actions by PPR......................................... B-29
Section 6.2 Actions by Dakota...................................... B-31

ARTICLE VII -- ADDITIONAL AGREEMENTS.................................... B-32
Section 7.1 PPR Stockholder Meeting................................ B-32
Section 7.2 Preparation of the Proxy Statement..................... B-32
Section 7.3 Access to Information and Properties................... B-33
Section 7.4 New Credit Facility.................................... B-33
Section 7.5 NYSE Listing........................................... B-33
Section 7.6 Fees and Expenses...................................... B-33
Section 7.7 Reasonable Best Efforts to Consummate the Exchange..... B-33
Section 7.8 Public Announcements................................... B-34
Section 7.9 State Takeover Laws.................................... B-34
Section 7.10 Indemnification........................................ B-34
Section 7.11 Notification of Certain Matters........................ B-34
Section 7.12 Tax Matters............................................ B-34
Section 7.13 Treatment of Dakota Phantom Stock Plan Participants.... B-35
Section 7.14 Title Commitments...................................... B-35

ARTICLE VIII -- CONDITIONS PRECEDENT TO CLOSING......................... B-36
Section 8.1 Conditions to Each Party's Obligation to Effect the
Exchange............................................... B-36
Section 8.2 Conditions to Obligation of Dakota, LLC to Effect the
Exchange............................................... B-36
Section 8.3 Conditions to Obligations of PPR to Effect the
Exchange............................................... B-37

ARTICLE IX -- TERMINATION, AMENDMENT AND WAIVER......................... B-38
Section 9.1 Termination............................................ B-38
Section 9.2 Effect of Termination.................................. B-39
Section 9.3 Amendment.............................................. B-39
Section 9.4 Waiver................................................. B-39

</TABLE>

B-3
<PAGE>

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE X -- GENERAL PROVISIONS......................................... B-39
Section 10.1 Non-Survival of Representations, Warranties and
Agreements............................................ B-39
Section 10.2 Notices............................................... B-40
Section 10.3 Interpretation........................................ B-40
Section 10.4 Counterparts.......................................... B-41
Section 10.5 Entire Agreement; No Third-Party Beneficiaries........ B-41
Section 10.6 Governing Law......................................... B-41
Section 10.7 Assignment............................................ B-41
Section 10.8 Severability.......................................... B-41
Section 10.9 Enforcement of this Agreement......................... B-41
Section 10.10 Rule of Construction.................................. B-41
Section 10.11 Cooperation........................................... B-42

Signatures.............................................................. B-43
</TABLE>

B-4
<PAGE>

DAKOTA
EXCHANGE AGREEMENT

EXCHANGE AGREEMENT, dated as of June 28, 1999 (this "Agreement"), among
PEPSI-COLA PUERTO RICO BOTTLING COMPANY, a Delaware corporation ("PPR"),
DAKOTA BEVERAGE COMPANY, INC., a Minnesota corporation ("Dakota"), and POHLAD
COMPANIES, a Minnesota corporation and the sole shareholder of Dakota
("Pohlad").

WITNESSETH:

WHEREAS, the respective Boards of Directors of Dakota and Pohlad have
determined that the transactions described in this Agreement are in their
respective companies' best interests and the best interests of their
shareholders and, accordingly, have authorized their respective companies to
enter into this Agreement; and

WHEREAS, this Agreement contemplates that Pohlad will form DakBev, LLC, a
Delaware limited liability company ("DakBev") which will be a wholly owned
subsidiary of Pohlad and that Dakota will merge with and into DakBev and,
furthermore, that each wholly owned corporation of Dakota will merge with and
into newly created wholly owned limited liability companies of DakBev
(collectively these transactions shall be referred to herein as the "DakBev
Merger"); and

WHEREAS, this Agreement further contemplates the formation of Dakota, LLC, a
Delaware limited liability company whose members will be Pohlad and Pepsi-Cola
Metropolitan Bottling Company, Inc., a Delaware corporation ("Metropolitan"),
and that Pohlad will contribute all its membership interests in DakBev (the
"DakBev Membership Units") to Dakota, LLC and that Metropolitan will
contribute shares of the common stock of PepsiCo, Inc., a Delaware corporation
("PepsiCo") to Dakota, LLC in exchange for a membership interest therein; and

WHEREAS, this Agreement provides for the issuance by PPR of shares of its
Class B common stock, par value $.01 per share (the "PPR Class B Common
Stock"), and for Dakota, LLC to exchange all of the DakBev Membership Units
for PPR Class B Common Stock in the manner set forth herein (the "Exchange"),
and that, as a result, DakBev will become a wholly-owned subsidiary of PPR;
and

WHEREAS, the DakBev Merger will occur immediately prior to the contribution
by Pohlad of its DakBev Membership Units to Dakota, LLC, which, in turn, will
occur immediately prior to the Exchange; and

WHEREAS, as an inducement to PPR entering into this Agreement and incurring
the obligations set forth herein, concurrently with the execution and delivery
of this Agreement, P-PR Transfer, LLP, a Delaware limited liability
partnership ("P-PRT") and PPR are entering into a Voting Agreement in the form
of Exhibit A hereto pursuant to which P-PRT has agreed to vote its shares of
PPR Class A common stock par value $.01 per share (the "PPR Class A Common
Stock") and PPR Class B Common Stock in favor of this Agreement and the
transactions contemplated hereby; and

WHEREAS, simultaneously with, and as a condition to, the consummation of the
Exchange, PPR will acquire all of the issued and outstanding shares of Delta
Beverage Group, Inc., a Delaware corporation (the "Delta Acquisition"); and

WHEREAS, for federal income tax purposes, it is intended that the Exchange
together with the Delta Acquisition shall qualify as a transfer to a
controlled corporation within the meaning of Section 351(a) of the Internal
Revenue Code of 1986, as amended (the "Code").

B-5
<PAGE>

NOW, THEREFORE, in consideration of the premises, and in reliance on the
representations, warranties and covenants contained herein, the parties agree
as follows:

ARTICLE I

PRE-CLOSING TRANSACTIONS

Section 1.1 Formation of DakBev and Subsidiaries of DakBev. Prior to the
Closing, Pohlad hereby agrees to take all necessary actions to: (a) form
DakBev, including, but not limited to, filing the Certificate of Formation of
DakBev with the Secretary of State of Delaware and (b) form seven (7) wholly
owned limited liability companies of DakBev (the "DakBev LLCs") including, but
not limited to, filing the Certificates of Formation with the Secretary of
State of the State of Delaware for each of the DakBev LLCs.

Section 1.2 Merger of DakBev and Dakota. Prior to the Closing, and after the
formation of DakBev, Pohlad hereby agrees to cause Dakota to merge with and
into DakBev pursuant to Section 18-209 of the Delaware Limited Liability
Company Act. DakBev shall be the surviving limited liability company as a
result of the DakBev Merger.

Section 1.3 Merger of the Wholly Owned Corporations into the DakBev
LLCs. Prior to the Closing and after the formation of DakBev and the DakBev
LLCs, Pohlad hereby agrees to cause each of Dakota's seven (7) wholly owned
corporations to merge with and into the DakBev LLCs pursuant to Section 18-209
of the Delaware Limited Liability Company Act. The seven (7) DakBev LLCs, each
a wholly owned subsidiary of DakBev, will be the surviving limited liability
companies as a result of the DakBev Merger.

Section 1.4 Formation of Dakota, LLC. Pohlad hereby agrees to take all
necessary actions prior to the Closing to form Dakota, LLC, including, but not
limited to, (a) filing the Certificate of Formation of Dakota, LLC with the
Secretary of State of the State of Delaware and (b) authorizing and signing a
limited liability company agreement of Dakota, LLC. At the Closing, Pohlad
will have all requisite power and authority, including voting control of
Dakota, LLC, necessary to cause Dakota, LLC to exchange the DakBev Membership
Units for the Exchange Consideration (as defined below) in accordance with
Article II hereof.

Section 1.5 Contributions to Dakota, LLC.

(a) Immediately prior to the Closing, and subsequent to the completion of
the events set forth in Section 1.1, Section 1.2 and Section 1.3 above, and
subject to the contribution by Metropolitan of certain of PepsiCo.'s shares of
issued and outstanding common stock to Dakota, LLC, Pohlad will contribute all
of the DakBev Membership Units to Dakota, LLC, in exchange for a membership
interest in Dakota, LLC (the "Pohlad Contribution").

(b) At the same time, the partners of P-PRT will contribute all of their
partnership interest in P-PRT to Dakota, LLC in exchange for membership
interests in Dakota, LLC (the "P-PRT Contribution"). Immediately after the P-
PRT Contribution, P-PRT will be dissolved and its assets distributed to
Dakota, LLC in complete liquidation.

ARTICLE II

THE EXCHANGE

Section 2.1 The Exchange. At the Closing (as defined in Section 2.3) all of
the DakBev Membership Units issued and outstanding immediately prior to the
Closing shall be exchanged for 46,760,000 shares of validly issued, fully paid
and nonassessable shares of PPR Class B Common Stock (the "Exchange
Consideration").

Section 2.2 Exchange Procedures.

At the Closing (i) PPR shall deliver to Dakota, LLC certificates
representing the Exchange Consideration and (ii) Pohlad will cause Dakota, LLC
to deliver to PPR all of the issued and outstanding DakBev Membership Units

B-6
<PAGE>

free and clear of all Encumbrances (as defined in Section 3.2) and a fully
executed Assignment of Membership Interests pursuant to which Dakota, LLC will
assign all of its right, title and interest in and to the DakBev Membership
Units to PPR.

Section 2.3 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") and all actions specified in this Agreement to occur
at the Closing shall take place at the offices of Briggs and Morgan,
Professional Association, 2400 IDS Center, 80 South Eighth Street,
Minneapolis, Minnesota, at 10:00 a.m., local time, no later than the third
business day following the day on which the last of the conditions set forth
in Article VIII shall have been fulfilled or waived (if permissible) or at
such later time and place as PPR and Dakota shall agree in writing.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PPR

PPR represents and warrants to Pohlad and Dakota as follows:

Section 3.1 Organization, Standing and Power. PPR is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and has the requisite corporate power and authority to own, lease
or operate its properties, and to carry on its business as now being
conducted. Each Subsidiary of PPR (the "PPR Subsidiaries") is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has the requisite corporate (in the case of a
Subsidiary that is a corporation) or other power and authority to own, lease
or operate its properties, and to carry on its business as now being
conducted. PPR and each of the PPR Subsidiaries are duly qualified to do
business, and are in good standing, in each jurisdiction where the character
of their properties owned or held under lease or the nature of their
activities makes such qualification necessary, except where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on PPR. For purposes of this Agreement (a) "Material Adverse
Change" or "Material Adverse Effect" means, when used with respect to PPR or
Dakota, as the case may be, any change or effect that is materially adverse to
the business, assets, liabilities, results of operation or condition
(financial or otherwise) of PPR and the PPR Subsidiaries, taken as a whole, or
Dakota and the Dakota Subsidiaries, taken as a whole, as the case may be, and
(b) "Subsidiary" means any corporation, partnership, limited liability
company, joint venture or other legal entity of which PPR or Dakota, as the
case may be (either alone or through or together with any other Subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation,
partnership, limited liability company, joint venture or other legal entity.
For the purposes of this Agreement, except where specifically stated
otherwise, "Dakota" and "Dakota Subsidiaries" shall mean (x) Dakota and its
subsidiaries, respectively, for the period prior to the DakBev Merger and (y)
DakBev and its subsidiaries, respectively, for the period after the DakBev
Merger.

Section 3.2 Capital Structure.

B-7
<PAGE>

exchangeable therefor, or any shares reserved for issuance under any stock
option, employee benefit or other plans or otherwise. No holder of any
security of PPR is entitled to any preemptive or similar rights to purchase
securities from PPR.

(b) Capital Stock of PPR After Exchange and Delta Acquisition. On the date
of Closing, upon completion of the Exchange and the Delta Acquisition, (i) the
authorized capital stock of PPR will consist of 150,000,000 shares, of which
5,000,000 shares will be designated as PPR Class A Common Stock and
145,000,000 will be designated as PPR Class B Common Stock, and (ii) PPR will
have issued and outstanding 5,000,000 shares of PPR Class A Common Stock and
81,760,006 shares of PPR Class B Common Stock, not including any shares of PPR
Class B Common Stock that PPR is permitted to issue by this Agreement (other
than in connection with the Delta Acquisition) during the period from the date
of this Agreement through the date of Closing. Assuming that the Closing were
to occur on the date hereof, immediately after such Closing, the issued and
outstanding PPR Class A Common Stock and Class B Common Stock would be owned
as set forth on Schedule 3.2(b).

(c) Capital Stock of PPR Subsidiaries. A listing of each of the PPR
Subsidiaries and the authorized, issued and outstanding capital stock or other
equity interests of each of the PPR Subsidiaries, whether voting or nonvoting,
and the rights and preferences associated with each class or series of capital
stock or other equity interests, is as set forth on Schedule 3.2(c). Except as
set forth on Schedule 3.2(c), (i) PPR is the owner of all of the capital stock
or other equity interests of the PPR Subsidiaries, free and clear of all
security interests, liens, pledges, options, rights of first refusal,
limitations on voting rights, charges or other encumbrances of any nature
whatsoever (collectively, "Encumbrances") and (ii) except for the PPR
Subsidiaries, PPR does not own, directly or indirectly, any equity or similar
interest in, any corporation, partnership, limited liability company, joint
venture or other legal entity. All outstanding shares of capital stock of the
PPR Subsidiaries have been duly authorized and validly issued and are fully
paid and nonassessable. Except as set forth on Schedule 3.2(c), none of the
PPR Subsidiaries has any outstanding securities convertible into or
exchangeable for common stock, no contracts, rights, options, warrants or
other agreements or commitments to purchase or otherwise issue any shares of
capital stock or other equity interests of any of the PPR Subsidiaries or
securities convertible into or exchangeable therefor, or any shares reserved
for issuance under stock option, employee benefit or other plans or otherwise.
No holder of any security of any of the PPR Subsidiaries is entitled to any
preemptive or similar rights to purchase securities from any such Subsidiary.

Section 3.3 Authority. The PPR Special Committee and PPR's Board of
Directors have, on or prior to the date of this Agreement (a) declared that as
of such date the Exchange was advisable and fair to and in the best interests
of PPR and its stockholders, (b) approved this Agreement and resolved to
recommend the approval of this Agreement and the transactions contemplated
hereby by PPR's stockholders, and (c) directed that this Agreement and the
transactions contemplated hereby be submitted to PPR's stockholders for
approval. Subject to the approval by PPR's stockholders of the PPR Charter
Amendment (as defined in Section 7.1), PPR has all requisite corporate power
and authority to enter into this Agreement and, subject to approval by PPR's
stockholders of this Agreement and the transactions contemplated hereby,
including the Exchange, to issue the PPR Class B Common Stock in connection
with the Exchange (the "Share Issuance") and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by PPR and
the consummation by PPR of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of PPR, subject to
the approval of this Agreement and the transactions contemplated hereby,
including the Exchange, by the stockholders of PPR. This Agreement has been
duly executed and delivered by PPR and (assuming the valid authorization,
execution and delivery of this Agreement by Dakota and Pohlad) this Agreement
constitutes the valid and binding obligation of PPR enforceable against it in
accordance with its terms except to the extent that (i) enforcement may be
limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to or limiting
creditors' remedies, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief are subject to certain
equitable defenses and to the discretion of the court or other tribunal before
which any proceeding therefor may be brought. Subject to approval by the
stockholders of PPR, the Share Issuance has been duly authorized by all
necessary corporate action on the

B-8
<PAGE>

part of PPR. When issued in accordance with the terms of this Agreement, the
shares of PPR Class B Common Stock to be issued under this Agreement will be
duly authorized, validly issued, fully paid and nonassessable.

Section 3.4 Consents and Approvals; No Violation. Except as disclosed on
Schedule 3.4 hereto, and assuming that all consents, approvals, authorizations
and other actions described in the second sentence of this Section 3.4 have
been obtained, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or the loss of any
present or future benefit under, or result in the creation of any Encumbrance
upon any of the properties or assets of PPR or any of the PPR Subsidiaries
under, any provision of (i) the Certificate of Incorporation or Bylaws of PPR,
(ii) the comparable charter or organizational documents of any of the PPR
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease, ground lease or other agreement, instrument, permit,
concession, franchise or license applicable to PPR or any of the PPR
Subsidiaries or (iv) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to PPR or any of the PPR Subsidiaries or any of
their respective real or personal properties or assets, other than, in the
case of clauses (ii), (iii) or (iv), any such violations, defaults, rights, or
Encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect on PPR, or prevent or materially delay the consummation of any
of the transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state),
foreign or supranational court, commission, governmental body, regulatory
agency, authority or tribunal (a "Governmental Entity") is required by or with
respect to PPR or any of the PPR Subsidiaries in connection with the execution
and delivery of this Agreement by PPR or is necessary for the consummation of
the transactions contemplated by this Agreement, except for (i) the filing
with the SEC of (A) the proxy statement for the special meeting of PPR's
stockholders to be held for the purpose of obtaining the approvals required
for the transactions contemplated hereby (the "Proxy Statement"); and (B) such
reports and information under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby, (ii)
such as may be required under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (iii) applicable requirements, if any, of
Blue Sky Laws and the New York Stock Exchange, Inc. (the "NYSE"), and (iv)
such other consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on PPR, or prevent or
materially delay the consummation of any of the transactions contemplated
hereby.

Section 3.5 SEC Documents and Other Reports. PPR has filed all required
forms, reports, documents, statements (including proxy statements) and
exhibits with the SEC that were required to be filed pursuant to the Exchange
Act or other federal securities laws since July 1, 1996 (the "PPR SEC
Documents"). As of their respective dates, the PPR SEC Documents complied in
all material respects with the then applicable requirements of the Securities
Act or the Exchange Act, as the case may be, and, at the respective times they
were filed, none of the PPR SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements (including, in each case, any notes thereto) of PPR
included in the PPR SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as of their respective dates of
filing, were prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of the unaudited statements, as
permitted by Regulation S-X of the SEC) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the consolidated
financial position of PPR and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended (subject, in the case
of unaudited statements, to the absence of footnote disclosure and any other
adjustments described therein and normal year-end audit adjustments). Except
as disclosed in the PPR SEC Documents or as required by GAAP, PPR has not,
since December 31, 1998, made any change in the accounting practices or
policies applied in the preparation of its financial statements.

B-9
<PAGE>

Section 3.6 Absence of Certain Changes. Except as set forth on Schedule 3.6
hereof, since December 31, 1998, PPR and the PPR Subsidiaries have operated
their businesses only in the ordinary course and consistent with past
practices and there has not been:

(a) any Material Adverse Change in PPR;

(c) except for the sale of substantially all of the assets of PPR's
Cristalia Premium Water division, any sale, transfer, lease, or Encumbrance
of any of PPR's or any of the PPR Subsidiaries' assets or cancellation of
any claims of, or indebtedness or obligations owing to, PPR or any of the
PPR Subsidiaries, except in the ordinary course of business;

(e) any purchase of or agreement to purchase any additional assets by PPR
or any of the PPR Subsidiaries, except in the ordinary course of business
or for a purchase price of less than $500,000;

(g) any entry into any additional, or modification of any existing,
agreements to borrow money (whether secured or unsecured), or any
refinancing of such agreements, except in the ordinary course of business;

(h) any entry into any guarantee by PPR or the PPR Subsidiaries on behalf
of any third party;

(i) any capital expenditures by PPR or the PPR Subsidiaries in excess of
the amount set forth in PPR's 1999 Capital Expenditure Budget, a true and
correct copy of which is appended to Schedule 3.6 hereto, except for
expenditures related to repairs or replacements for which adequate
insurance was or is available;

(j) changes in accounting principles, elections, or procedures, other
than as required by changes in GAAP;

(l) any amendment of the Certificate of Incorporation or Bylaws of PPR or
any comparable charter or organizational documents of the PPR Subsidiaries;

(n) any amendment or termination of any material agreement to which PPR
or any of the PPR Subsidiaries is a party; or

(o) any action taken by PPR or the PPR Subsidiaries, or their directors,
officers or stockholders to authorize any of the actions contemplated
above.

B-10
<PAGE>

Section 3.7 Permits; Compliance and Contracts.

(a) Except as disclosed in Schedule 3.7, each of PPR and the PPR
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates
(including, without limitation, certificates of occupancy), approvals, orders
of any Governmental Entity and other permits, including, without limitation,
building, environmental, land-use, health, safety, fire, utility or other
rights or permits necessary for PPR or any of the PPR Subsidiaries to own,
lease and operate all of the PPR Real Property (as defined in Section 3.16) or
to carry on its business as it is now being conducted (collectively, the "PPR
Permits"), except where the failure to have any of the PPR Permits would not,
individually or in the aggregate, have a Material Adverse Effect on PPR, and,
as of the date of this Agreement, (i) all of the PPR Permits are valid and in
full force and effect, (ii) each of PPR and the PPR Subsidiaries is in
compliance with its respective PPR Permits, and (iii) no revocations,
suspensions or cancellations of any of the PPR Permits are pending or
threatened.

(b) Except as disclosed in Schedule 3.7, neither PPR nor any of the PPR
Subsidiaries is in violation of , or has been charged with, is in receipt of
any notice or warning of, or to the Knowledge of PPR (as hereinafter defined),
under investigation with respect to, any failure or alleged failure to comply
with (A) its charter, bylaws or other organizational documents, (B) to the
Knowledge of PPR any applicable law, ordinance, administrative or governmental
rule or regulation (except for Environmental Laws, which are addressed in
Section 3.12 hereto) or (C) any order, decree or judgment of any Governmental
Entity having jurisdiction over PPR or any of the PPR Subsidiaries, except, in
the case of clauses (A), (B) and (C), for any violations that, individually or
in the aggregate, would not have a Material Adverse Effect on PPR.

(c) Except as disclosed in Schedule 3.7, all of the material contracts of
PPR and the PPR Subsidiaries that are required to be described in the PPR SEC
Documents or to be filed as exhibits thereto are described in the PPR SEC
Reports or filed as exhibits thereto. Except as set forth in the PPR SEC
Documents filed prior to the date of this Agreement or as set forth on
Schedule 3.7, each material contract is in full force and effect and no event
of default or event that, but for the giving of notice or the lapse of time or
both, would constitute an event of default exists or, upon the consummation by
PPR of the transactions contemplated by this Agreement, will exist under any
indenture, mortgage, loan agreement, note or other agreement or instrument for
borrowed money, any guarantee of any agreement or instrument for borrowed
money or any lease, contractual license or other agreement or instrument to
which PPR or any of the PPR Subsidiaries is a party or by which PPR or any PPR
Subsidiary is bound or to which any of the properties, assets or operations of
PPR or any such Subsidiary is subject, other than any defaults that,
individually or in the aggregate, would not have a Material Adverse Effect on
PPR. "Knowledge of PPR" means the actual knowledge of A. David Velez and Joe
Gonzalez.

Section 3.8 Tax Matters.

(a) Except as disclosed on Schedule 3.8, PPR and the PPR Subsidiaries have
(i) duly and timely filed (or there has been duly filed on their behalf) all
Tax Returns required to be filed by or with respect to PPR and/or the PPR
Subsidiaries, including all foreign, federal, Puerto Rican and local Tax
Returns, and all such Tax Returns were true, accurate and complete in all
material respects, (ii) withheld and collected all Taxes that are required by
applicable laws, rules or regulations to be withheld and collected and (iii)
paid in full on a timely basis (or there have been paid on their behalf) all
Taxes shown to be due on such Tax Returns. The reserve for Taxes on the
December 31, 1998 consolidated balance sheet contained in PPR's Form 10-K for
the period ending December 31, 1998 for the payment of all accrued but unpaid
Taxes through the date thereof has been determined in accordance with GAAP and
is adequate in amount for the payment of all liabilities for Taxes for which
PPR and the PPR Subsidiaries are liable for the periods up to and including
December 31, 1998. Neither PPR nor the PPR Subsidiaries have incurred any Tax
liabilities since December 31, 1998, other than those Tax liabilities arising
in the ordinary course of business and consistent with prior periods.

(b) Except as described on Schedule 3.8, neither PPR nor the PPR
Subsidiaries has received any notice of a deficiency or assessment (and none
has been threatened) with respect to Taxes of PPR or the PPR Subsidiaries from
any foreign, federal, Puerto Rico or local taxing authority which has not been
fully paid or finally settled; there

B-11
<PAGE>

are no ongoing audits or examination of any Tax Return which includes PPR or
the PPR Subsidiaries and no notice of audit or examination of any such Tax
Return has been received by PPR or any of the PPR Subsidiaries (and none has
been threatened); PPR or the PPR Subsidiaries have not given and there has not
been given on its or their behalf a waiver or extension of any statute of
limitations relating to the payment of Taxes of PPR or the PPR Subsidiaries;
and no issue has been raised in writing on audit or in any other proceeding
with respect to Taxes of PPR or the PPR Subsidiaries by any foreign, federal,
Puerto Rico, or local taxing authority.

(c) For purposes of this Agreement, (i) the terms "Tax" and "Taxes" shall
mean all taxes, charges, fees, levies, penalties or other assessments imposed
by any United States or Puerto Rican, federal, state, local or foreign taxing
authority, including, but not limited to, income, excise, property, sales,
transfer, franchise, payroll, employment, unemployment, back-up withholding,
gains, withholding, ad valorem, social security or other taxes, including any
interest, penalties or additions attributable to taxes, and (ii) the term "Tax
Return" shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto and any amendments thereof.

Section 3.9 Actions and Proceedings. Except as set forth in the PPR SEC
Documents or on Schedule 3.9:

(a) There are no outstanding orders, judgments, injunctions, awards or
decrees of any Governmental Entity against or involving (i) PPR or any of
the PPR Subsidiaries, (ii) any of the present or former directors,
officers, employees, consultants, agents or stockholders of PPR or any of
the PPR Subsidiaries, as such, (iii) any of PPR's or any PPR Subsidiaries'
properties, assets or business or (iv) any PPR Plan (as hereinafter
defined) that, in the case of clauses (i), (ii), (iii) or (iv),
individually or in the aggregate, would have a Material Adverse Effect on
PPR.

(b) As of the date of this Agreement, there are no actions, suits or
claims or legal, administrative or arbitrative proceedings or
investigations pending or, to the Knowledge of PPR, threatened against or
involving (i) PPR or any of the PPR Subsidiaries, (ii) any of PPR's or any
PPR Subsidiaries' present or former directors, officers, employees,
consultants, agents or stockholders, as such, (iii) any of PPR's or any PPR
Subsidiaries' properties, assets or business or (iv) any PPR Plan that, in
the case of clauses (i), (ii), (iii) or (iv), individually or in the
aggregate, are reasonably likely to have a Material Adverse Effect on PPR
or relate to the transactions contemplated by this Agreement.

Section 3.10 Certain Agreements. As of the date of this Agreement, neither
PPR nor any of the PPR Subsidiaries is a party to any oral or written
agreement or plan, including any stock option plan, stock appreciation rights
plan, restricted stock plan, stock purchase plan, PPR Other Benefit Obligation
or PPR Plan (as both are defined in Section 3.11), any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement.

Section 3.11 Employee Benefit Matters.

(a) As used in this Section 3.11, the following terms have the meanings set
forth below:

B-12
<PAGE>

"PPR VEBA" means a voluntary employees' beneficiary association under
Code (S) 501(c)(9) whose members include employees of PPR or the PPR
Subsidiaries.

"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

"Title IV Plans" means all PPR Plans that are subject to Title IV of
ERISA, 29 U.S.C. (S) 1301 et seq., other than Multi-Employer Plans.

(b) (i) Schedule 3.11(b)(i) attached hereto sets forth a complete and
accurate list of all PPR Plans, PPR Other Benefit Obligations, and PPR VEBAs,
and identifies as such all PPR Plans that: (A) are defined benefit plans (as
defined in ERISA (S) 3(35)); (B) meet or purport to meet the requirements of
Code (S) 401(a); or (C) are Title IV Plans.

(ii) None of the PPR Plans set forth on Schedule 3.11(b)(i) is a Multi-
Employer Plan and none of PPR, any of the PPR Subsidiaries or any ERISA
Affiliate has any assessed or potential liability due to a complete or partial
withdrawal from or a termination or reorganization of a Multi-Employer Plan.
No circumstances exist that could reasonably be expected to result in any such
liability to PPR, any PPR Subsidiary or any ERISA Affiliate.

(iii) Except as set forth in Schedule 3.11(b)(iii) or as required by
applicable law, no PPR Plans provide retiree health or life insurance
benefits.

(c) PPR has delivered or made available to Dakota all documents, insurance
policies and contracts comprising, describing or relating to each PPR Plan,
PPR Other Benefit Obligation, or PPR VEBA and of any related trust; as well as
all required filings for each of the above filed with government authorities
for each of the three most recent plan years.

(d) Except as set forth in Schedule 3.11(d) attached hereto:

B-13
<PAGE>

Section 3.12 Compliance with Environmental Laws.

(a) Except as set forth on Schedule 3.12, each of PPR and the PPR
Subsidiaries, and, to the Knowledge of PPR, any prior owner or lessee, have
generated, handled, manufactured, treated, stored, used, released, transported
and disposed of all Environmentally Regulated Materials (as defined below) on,
beneath, to or from any of the properties owned or operated by PPR and the PPR
Subsidiaries in the conduct of their businesses or any other properties
formerly owned, leased or operated by PPR or the PPR Subsidiaries, in
compliance with all Environmental Laws (as defined below).

(b) Except as set forth on Schedule 3.12, PPR and the PPR Subsidiaries have
operated all plants, facilities and business operations in compliance with all
Environmental Laws, and all plants, facilities and business operations are
currently in compliance with all Environmental Laws.

(c) Except as set forth on Schedule 3.12, neither PPR nor the PPR
Subsidiaries have disposed of or released any Environmentally Regulated
Material in any location which would reasonably be expected to give rise to a
claim of responsibility for investigation or clean-up costs, personal injury
or property damage liability against PPR or any PPR Subsidiary by any third
party.

(d) Except as set forth on Schedule 3.12, neither PPR nor the PPR
Subsidiaries have received any notices or claims of violations or liabilities
relating to an Environmentally Regulated Material or an Environmental Law,
which notices or claims of violations or liabilities have not been resolved.

B-14
<PAGE>

the preservation or protection of waterways, groundwater, drinking water, air,
wildlife, plants or other natural resources; or the health and safety of
persons or property, including protection of the health and safety of
employees insofar as such health and safety laws may relate to Environmentally
Regulated Materials, or (ii) imposes liability with respect to any of the
foregoing, including the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 USC 9601 et seq., the Resource Conservation and Recovery
Act, 42 USC 6901, et seq., the Clean Water Act, 33 U.S.C. (S) 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the Clean Air
Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
(S) 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq.;
and the Occupational Safety and Health Act of 1970, as amended, as it applies
to Environmentally Regulated Materials, 29 U.S.C. (S) 651 et seq.; or any
other federal, state or local law of similar effect, each as amended from time
to time.

Section 3.13 Labor Matters. Except as set forth on Schedule 3.13 hereto,
neither PPR nor any of the PPR Subsidiaries is a party to any collective
bargaining agreement or labor contract. To the Knowledge of PPR, as of the
date of this Agreement, there are no present or pending applications for
certification of any union as the exclusive bargaining agent for any employees
of PPR or any PPR Subsidiaries. To the Knowledge of PPR, neither PPR nor any
of the PPR Subsidiaries has engaged in any unfair labor practice with respect
to any persons employed by or otherwise performing services for PPR or any of
the PPR Subsidiaries (the "PPR Business Personnel"), and there is no unfair
labor practice complaint or grievance against PPR or any of the PPR
Subsidiaries by the National Labor Relations Board or any comparable state or
Puerto Rican agency pending or, to the Knowledge of PPR, threatened with
respect to the PPR Business Personnel, except where such unfair labor
practice, complaint or grievance would not have a Material Adverse Effect on
PPR. There is no labor strike, dispute, slowdown or stoppage pending or, to
the Knowledge of PPR, threatened against PPR or any of the PPR Subsidiaries,
except where such dispute, strike or work stoppage would not have a Material
Adverse Effect on PPR.

Section 3.14 Intellectual Property. Schedule 3.14 sets forth a complete list
of all patents and applications therefor, trademark registrations and
applications therefor, service mark registrations and applications therefor,
copyright registrations and applications therefor, trade names, computer
programs or software which are material to the operation of PPR's business and
interests in license agreements and all other proprietary rights that are
owned, licensed, sublicensed or used by agreement or permission by PPR or any
PPR Subsidiary and used in the continued operation of PPR's business
(collectively, "PPR Intellectual Property"). Except as otherwise set forth on
Schedule 3.14 and except for the security interest held by Banco Popular,
PPR's interest in the PPR Intellectual Property is free and clear of any
Encumbrance, and constitutes all such property or rights used by or necessary
to the operation of PPR's business. To PPR's Knowledge and except as set forth
on Schedule 3.14, the use of the PPR Intellectual Property does not conflict
with, infringe upon, or misappropriate any rights held or asserted by any
person, or require the consent of any person. Except as set forth on Schedule
3.14, neither PPR nor any PPR Subsidiary has, in the past two years, received
any notice or claim that any such PPR Intellectual Property is not valid or
enforceable, or of any infringement upon or conflict with any patent,
trademark, service mark, copyright, trade name or trade secret of any third
party by PPR or any PPR Subsidiary or of any claim by any third party alleging
any such infringement or conflict, and, in the past two years, neither PPR nor
any PPR Subsidiary has given any notice of infringement to any third party
with respect to any of the PPR Intellectual Property. PPR has paid all
required license fees related to all software used in the operation of its
business.

Section 3.15 Title to Assets; Insurance. Except as described on Schedule
3.15, PPR and the PPR Subsidiaries have good and marketable title to all real
property and good title to all of the personal property and assets which they
purport to own and which are necessary to carry on its business, in each case
free and clear of all Encumbrances except for Permitted Exceptions (as defined
in Section 3.16). PPR and the PPR Subsidiaries have in full force and effect
policies of insurance that are customary for businesses of similar size in
similar industries and consistent with sound business practice.

Section 3.16 Real Property.

(a) Schedule 3.16(a) describes all real properties owned or leased by PPR
and the PPR Subsidiaries (the "PPR Real Property"), the nature of the interest
of PPR or the PPR Subsidiaries and the entity which holds the interest in

B-15
<PAGE>

those properties and the approximate acreage of each of those properties.
There is no real property (other than the PPR Real Property) the use or
possession of which by PPR and the PPR Subsidiaries is necessary to carry on
its business. Except as described on Schedule 3.16(b), PPR and each of the PPR
Subsidiaries has (i) such title to the PPR Real Property as is legally
sufficient for the current use thereof in its business as presently conducted,
(ii) good and marketable indefeasible title in fee simple (except for
Permitted Exceptions, as hereinafter defined) to all PPR Real Property shown
in Schedule 3.16(a) as owned by it (the "PPR Owned Real Property") and (iii)
valid leaseholds under valid and enforceable leases in all PPR Real Property
shown on Schedule 3.16(a) as leased by it. The PPR Real Property is owned or
leased by PPR and the PPR Subsidiaries free and clear of all matters except
for Permitted Exceptions. Except as set forth in Schedule 3.16(b), none of the
PPR Real Property is subject to any lease (other than the PPR Leases (as
hereinafter defined)), sublease, license or other agreement granting to any
person any right to the use, occupancy or enjoyment thereof (or any portion
thereof). None of the Permitted Exceptions materially interferes with or has
interfered with the maintenance, use or operation of the PPR Real Property.
"Permitted Exceptions" means (i) matters listed or described on Schedule
3.16(b), (ii) easements, covenants, rights-of-way and other Encumbrances or
restrictions which do not, individually or in the aggregate, materially
detract from the value or impair the present and continued use, operation and
maintenance of the property subject thereto, or impair the operation of PPR or
any of the PPR Subsidiaries, and (iii) real estate taxes not yet due or
payable, and (iv) encumbrances existing at the date of this Agreement set
forth on Schedule 3.16(a).

(b) None of the leases identified in Schedule 3.16(a) (collectively, the
"PPR Leases") has been modified or amended, and no notice of termination has
been delivered with respect thereto, except as set forth in Schedule 3.16(b).
Except as set forth on Schedule 3.16(b), neither PPR nor any of the PPR
Subsidiaries, nor any other person, is in breach of or default under any PPR
Lease (and no event has occurred which, with due notice or lapse of time or
both, may constitute such a breach or default).

(c) To the Knowledge of PPR, the buildings, driveways and all other
structures and improvements upon the PPR Real Property are all within the
boundary lines of the applicable property or have the benefit of valid
easements or other legal rights and there are no encroachments thereon that
would affect the use thereof.

(d) To the Knowledge of PPR, all buildings, structures, improvements,
equipment, facilities, plants and fixtures owned or leased by PPR and the PPR
Subsidiaries conform in all material respects to all applicable codes and
rules adopted by national and local associations and boards and insurance
underwriters, and all such buildings, structures, improvements and fixtures
are in good operating condition and repair. There are no outstanding
requirements or recommendations by any insurance company which has issued a
policy covering any such property, or by any board of fire underwriters or
other body exercising similar functions, requirement or recommending any
repairs or work to be done on any such property.

(e) To the Knowledge of PPR, all public utilities required for the operation
of such properties either enter such properties through adjoining public
streets or, if they pass through adjoining private land, do so in accordance
with valid public or private easements which will inure to the benefit of PPR
and the PPR Subsidiaries and their respective successors and assigns. All of
the public utilities mentioned above are installed and operating, and all
installation and connection charges are paid in full.

(f) To the Knowledge of PPR, the plumbing, electrical, heating, air
conditioning, elevator, ventilating and all other mechanical or structural
systems and equipment in the buildings or improvements located on the PPR Real
Property and any manufacturing systems and components located thereof are in
good working order and condition, and the roof, basement and foundation walls
of such buildings and improvements for which PPR or the PPR Subsidiaries is
responsible (as owner or as lessee under any PPR Lease) are in good condition
and free of leaks and other defects. All such mechanical and structural
systems and equipment and such manufacturing systems and components and such
roofs, basements and foundation walls for which a person other than PPR or the
PPR Subsidiaries is responsible are in good working order and condition and
free of leaks and other defects.

B-16
<PAGE>

be. The PPR Real Property has full and uninterrupted access to and from public
roads and PPR has no Knowledge of any fact or condition which would result in
the termination of such access.

(h) Neither PPR nor the PPR Subsidiaries is the landlord or lessor under any
lease, sublease or other occupancy agreement affecting any of the PPR Real
Property.

Section 3.17 Title Insurance. Schedule 3.17 sets forth a true, correct and
complete list and summary description of all of the policies of title
insurance insuring PPR's and the PPR Subsidiaries' interest in the PPR Owned
Real Property (collectively, the "PPR Title Policies"). PPR has furnished a
true, correct and complete copy of all such PPR Title Policies to Dakota. All
of the PPR Title Policies are in full force and effect. PPR shall maintain,
and shall use its best efforts to cause the PPR Subsidiaries to maintain, the
coverage under the PPR Title Policies in full force and effect through the
date of the Closing. Neither PPR nor the PPR Subsidiaries is in material
default under any provisions of the PPR Title Policies. There is no claim by
PPR, the PPR Subsidiaries or any other person pending under any of the PPR
Title Policies as to which coverage has been questioned, denied or disputed by
the underwriters or issuers of such PPR Title Policies.

Section 3.18 Zoning. To the Knowledge of PPR, all of the PPR Real Property
and the buildings, structures, improvements and fixtures located thereon, and
the respective businesses conducted thereat and the manner of such conduct,
conform in all respects to all existing zoning, building and other applicable
laws, rules and regulations and the operation of the PPR Real Property and the
improvements located thereon is not in violation of any such laws, rules or
regulations. To the Knowledge of PPR, all uses of the PPR Real Property and
the improvements, to the Knowledge of PPR, located thereon are "as-of-right"
and do not require any non-conforming use rights, nor have they been
"grandfathered" under any pre-existing laws, rules or regulations.

Section 3.19 Brokers. No broker, investment banker or other person, other
than Bear, Stearns & Co., Inc., the fees and expenses of which will be paid by
PPR, is entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of PPR.

Section 3.20 Relationships. Except as otherwise disclosed in PPR's Form 10-K
for the period ended December 31, 1998, PPR's relationships with its
franchisors, agents, brokers, dealers, distributors, representatives,
licensees, customers and suppliers are continuing, and there has been no
material change in the scope of such relationships during the last year with
any of such parties or similar parties with which PPR has done business during
the last year. All sales and performances of services by PPR in connection
with its business are in material compliance with all of PPR's
representations, warranties and agreements, express or implied, with respect
to such sales and performances, except for customary returns and allowances.

Section 3.21 Compliance with Quality Standards. All water used in the
production process of PPR's business conforms, in all material respects, to
(i) the quality standards required by PPR's or the PPR Subsidiaries'
franchisors, including PepsiCo, (ii) internal quality standards required by
PPR, and (iii) any Puerto Rican or local quality standards.

Section 3.22 Year 2000 Compliance. To the extent that any functionality of
any computer system used by PPR is dependent upon or interdependent with the
use or specification of any calendar date, PPR has used commercially
reasonable efforts in implementing a plan pursuant to which any such computer
system shall be "Year 2000 Compliant," except where failure to do so will not
result in a Material Adverse Effect on PPR. For purposes of this Agreement,
the term Year 2000 Compliant means that neither the performance nor the
functionality of such computer systems shall be materially affected by dates
in, into and between the 20th and 21st centuries. To be deemed Year 2000
Compliant, such computer systems shall conform in all material respects to the
following basic requirements: (i) no value for a current date shall cause any
interruption in PPR's operations in which the computer system is used; and
(ii) any date-based functions shall operate and perform in a consistent manner
for dates in, into and between the 20th and 21st centuries and such computer
systems shall calculate, manipulate and represent properly inputted dates
correctly.

B-17
<PAGE>

Section 3.23 Delaware Business Combination Statute. PPR has obtained or
shall obtain prior to the Closing, all approvals necessary from its Board of
Directors related to the transactions contemplated by this Agreement so as to
constitute prior approval by the Board of Directors of such transactions
within the meaning of section 203(a)(1) of the Delaware General Corporation
Law.

Section 3.24 Disclosure. No representation or warranty of PPR in this
Agreement or in any certificate, schedule, statement or other document
furnished or to be furnished by PPR to Dakota, Pohlad or Dakota, LLC pursuant
hereto or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated herein or therein or necessary
to make the statements herein or therein not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF DAKOTA

Dakota represents and warrants (each such representation and warranty being
made (i) as to Dakota and the Dakota Subsidiaries prior to the DakBev Merger
and (ii) as to DakBev and each Subsidiary of DakBev after the DakBev Merger)
to PPR as follows:

Section 4.1 Organization, Standing and Power. As of the date of this
Agreement, Dakota is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota and has the requisite
corporate power and authority to own, lease or operate its properties and to
carry on its business as now being conducted. At the Closing, DakBev will be a
limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and will have the requisite
power and authority to own, lease or operate its properties and to carry on
the business of Dakota as now being conducted. Each Subsidiary of Dakota (the
"Dakota Subsidiaries") is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized and has
the requisite corporate (in the case of a Subsidiary that is a corporation) or
other power and authority to own, lease or operate its properties, and to
carry on its business as now being conducted. Dakota and each of the Dakota
Subsidiaries are duly qualified to do business, and are in good standing, in
each jurisdiction where the character of their properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on Dakota.

Section 4.2 Capital Structure.

(a) Capital Stock of Dakota.

(i) The authorized capital stock of Dakota prior to the DakBev Merger
consists of 1,000 shares of Common Stock, par value $1.00 per share (the
"Dakota Stock"). Dakota has issued and outstanding 1,000 shares of Dakota
Stock, all of which are owned by Pohlad (the "Dakota Stock"). All
outstanding shares of Dakota Stock have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set forth on
Schedule 4.2(a), Dakota has no outstanding securities convertible into or
exchangeable for common stock, no contracts, rights, options, warrants or
other agreements or commitments to purchase or otherwise issue any shares
of its capital stock or securities convertible into or exchangeable
therefor, or any shares reserved for issuance under any stock option,
employee benefit or other plans or otherwise. Except as set forth in
Dakota's Articles of Incorporation, no holder of any security of Dakota is
entitled to any preemptive or similar rights to purchase securities from
Dakota.

(ii) At the Closing, all of the authorized, issued and outstanding DakBev
Membership Units will be owned by Dakota, LLC. All of the DakBev Membership
Units at the Closing will have been duly authorized and validly issued and
will be fully paid and nonassessable. DakBev will have no outstanding
interests or securities convertible into or exchangeable for membership
interests, no contracts, rights, options, warrants or other agreements or
commitments to purchase or otherwise issue any shares of its membership
interests or securities convertible into or exchangeable therefor, or any
membership units reserved for issuance under

B-18
<PAGE>

any employee benefit or other plans or otherwise. No holder of any security
of DakBev will be entitled to any preemptive or similar rights to purchase
securities from DakBev.

(b) Capital Stock of Dakota Subsidiaries.

(i) A listing of each of the Dakota Subsidiaries and the authorized,
issued and outstanding capital stock or other equity interests of each of
the Dakota Subsidiaries, whether voting or nonvoting, and the rights and
preferences associated with each class or series of capital stock or other
equity interests, is as set forth on Schedule 4.2(b). Except as set forth
on Schedule 4.2(b), (i) Dakota is the owner of all of the capital stock or
other equity interests of the Dakota Subsidiaries, free and clear of all
Encumbrances and (ii) except for the Dakota Subsidiaries Dakota does not
own, directly or indirectly, any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
legal entity. All outstanding shares of capital stock of the Dakota
Subsidiaries have been duly authorized and validly issued and are fully
paid and nonassessable. Except as set forth on Schedule 4.2(b), none of the
Dakota Subsidiaries has any outstanding securities convertible into or
exchangeable for common stock, no contracts, rights, options, warrants or
other agreements or commitments to purchase or otherwise issue any shares
of capital stock or other equity interests of any of the Dakota
Subsidiaries or securities convertible into or exchangeable therefor, or
any shares reserved for issuance under stock option, employee benefit or
other plans or otherwise. No holder of any security of any of the Dakota
Subsidiaries is entitled to any preemptive or similar rights to purchase
securities from any such Subsidiary.

(ii) At the Closing, all of the authorized, issued and outstanding
membership units of each of the DakBev LLCs will be owned by DakBev. All
such membership units at the Closing will have been duly authorized and
validly issued and will be fully paid and nonassessable. The DakBev LLCs
will have no outstanding interests or securities convertible into or
exchangeable for membership interests, no contracts, rights, options,
warrants or other agreements or commitments to purchase or otherwise issue
any shares of its membership interests or securities convertible into or
exchangeable therefor, or any membership interests reserved for issuance
under any employee benefit or other plans or otherwise. No holder of any
security of the DakBev LLCs will be entitled to any preemptive or similar
rights to purchase securities of DakBev or the DakBev LLCs.

Section 4.3 Authority. Dakota's Board of Directors has on or prior to the
date of this Agreement: (a) declared that as of such date the Exchange was
advisable and fair to and in the best interest of Dakota and its sole
stockholder Pohlad and (b) approved this Agreement and the transactions
contemplated hereby, including, but not limited to, the DakBev Merger and the
Exchange, and resolved to recommend to Pohlad that it enter into this
Agreement. Dakota has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement by Dakota and the performance of its
obligations hereunder have been duly authorized by all necessary corporate
action on the part of Dakota. This Agreement has been duly executed and
delivered by Dakota and (assuming the valid authorization, execution and
delivery of this Agreement by PPR and Pohlad) this Agreement constitutes the
valid and binding obligation of Dakota enforceable against Dakota in
accordance with its terms except to the extent that (i) enforcement may be
limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to or limiting
creditors' remedies and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief are subject to certain equitable defenses
and to the discretion of the court or other tribunal before which any
proceeding therefor may be brought.

Section 4.4 Consents and Approvals; No Violation. Except as disclosed on
Schedule 4.4 hereto, and assuming that all consents, approvals, authorizations
and other actions described in this Section 4.4 have been obtained, the
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof
will not, result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or the loss of any present or
future benefit under, or result in the creation of any Encumbrance upon any of
the properties or assets of Dakota or any of the Dakota Subsidiaries under,
any provision of (i) the Articles

B-19
<PAGE>

of Incorporation or Bylaws of Dakota, (ii) the comparable charter or
organizational documents of any of the Dakota Subsidiaries, (iii) any loan or
credit agreement, note, bond, mortgage, indenture, lease, ground lease or
other agreement, instrument, permit, concession, franchise or license
applicable to Dakota or any of the Dakota Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Dakota or any of the Dakota Subsidiaries or any of their respective real or
personal properties or assets, other than in the case of clauses (ii), (iii)
or (iv), any such defaults, rights, violations, or Encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect on
Dakota, or prevent or materially delay the consummation of any of the
transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any Governmental Entity is required by
or with respect to Dakota or any of the Dakota Subsidiaries in connection with
the execution and delivery of this Agreement by Dakota or is necessary for the
consummation of the transactions contemplated by this Agreement, except for
(i) the filing of Certificates of Formation with the Secretary of State of the
State of Delaware to form DakBev, LLC and Dakota, LLC, (ii) the filing of
appropriate merger documents with the Secretaries of State of Minnesota and
Delaware relating to the DakBev Merger, (iii) the filing with the SEC of (A)
the Proxy Statement and (B) such reports and information under the Exchange
Act as may be required in connection with this Agreement and the transactions
contemplated hereby, (iv) such as may be required under the HSR Act, (v)
applicable requirements, if any, of Blue Sky Laws and the NYSE, and (vi) such
other consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on Dakota, or prevent or
materially delay the consummation of any of the transactions contemplated
hereby.

Section 4.5 Financial Statements. Schedule 4.5 hereto consists of (a) a copy
of the consolidated balance sheets of Dakota as of December 31, 1998, December
31, 1997 and December 31, 1996 and the related statements of operations,
stockholders equity and cash flows for the calendar years then ended (the
"Annual Financial Statements") and (b) the unaudited balance sheets of Dakota
as of March 31, 1999 and March 31, 1998 and the related statements of
operations, stockholders equity and cash flows for the periods then ended (the
"Unaudited Financial Statements"). The Annual Financial Statements have been
audited by Arthur Andersen, LLP certified public accountants. The Annual
Financial Statements and the Unaudited Financial Statements have been prepared
in accordance with GAAP except, with respect to the Unaudited Financial
Statements, for the absence of footnote disclosures and normal year-end audit
adjustments, and in each case such principles have been applied in a
consistent manner in each of the periods indicated. The Annual Financial
Statement and the Unaudited Financial Statements are complete, correct and in
accordance with the books of accounts and records of Dakota and present fairly
the consolidated financial position of Dakota and the Dakota Subsidiaries as
of December 31, 1998, December 31, 1997 and December 31, 1996, and March 31,
1999 and March 31, 1998, as the case may be, and the results of operations of
Dakota and the Dakota Subsidiaries for the periods then ended.

Section 4.6 Absence of Certain Changes or Events. Except as set forth on
Schedule 4.6 hereof, since December 31, 1998, Dakota and the Dakota
Subsidiaries have operated their businesses only in the ordinary course and
consistent with past practices and there has not been:

(a) any Material Adverse Change in Dakota;

(b) any dividend or other distribution on, or any recapitalization,
combination or subdivision with respect to, or any purchase or redemption
by Dakota or the Dakota Subsidiaries of, any shares of the capital stock of
Dakota or any of the Dakota Subsidiaries other than in the ordinary course
of business consistent with past practices;

(c) any sale, transfer, lease, or Encumbrance of any of Dakota's or any
of the Dakota Subsidiaries' assets or cancellation of any claims of, or
indebtedness or obligations owing to, Dakota or any of the Dakota
Subsidiaries, except in the ordinary course of business;

(d) any material increase in the salaries or other compensation or
employee benefits with respect to any employees of Dakota or the Dakota
Subsidiaries except regularly scheduled increases in accordance with prior
practices or existing agreements.

B-20
<PAGE>

(e) any purchase of or agreement to purchase any additional assets by
Dakota or any of the Dakota Subsidiaries, except in the ordinary course of
business or for a purchase price of less than $500,000;

(f) any loss, damage, destruction or other casualty to any of the
properties of Dakota or the Dakota Subsidiaries (whether or not covered by
insurance) (i) in excess of $100,000 per occurrence or $500,000 in the
aggregate or (ii) which has resulted in a Material Adverse Effect on Dakota
or the Dakota Subsidiaries;

(h) any entry into any guarantee by Dakota or the Dakota Subsidiaries on
behalf of any third party;

(i) any capital expenditures by Dakota or the Dakota Subsidiaries in
excess of the amount set forth in Dakota's 1999 Capital Expenditure Budget,
a true and correct copy of which is appended to Schedule 4.6 hereto;

(j) changes in accounting principles, elections, or procedures other than
as required by changes in GAAP;

(k) any entry into any employment, consulting, management or severance
agreement by Dakota or any of the Dakota Subsidiaries except in the
ordinary course of business;

(l) amendment of the Articles of Incorporation or Bylaws of Dakota or
comparable charter or organizational document of the Dakota Subsidiaries;

(m) except for the merger of Dakota into DakBev contemplated in this
Agreement, authorization for issuance, sale, delivery or agreement or
commitment to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any shares of any class of Dakota's or any of the
Dakota Subsidiaries' capital stock or any securities convertible into or
exchangeable for shares of any class of such capital stock;

(n) any amendment or termination of any material agreement to which
Dakota or any of the Dakota Subsidiaries is a party; or

(o) any action taken by Dakota or the Dakota Subsidiaries, or their
directors, officers or stockholders to authorize any of the actions
contemplated above.

Section 4.7 Permits; Compliance and Contracts.

(a) Except as disclosed in Schedule 4.7(a), each of Dakota and the Dakota
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
(including, without limitation, certificates of occupancy), approvals, orders
of any Governmental Entity and other permits, including, without limitation,
building, environmental, land-use, health, safety, fire, utility or other
rights or permits necessary for Dakota or any of the Dakota Subsidiaries to
own, lease and operate all of the Dakota Real Property (as defined in Section
4.17) or to carry on its business as it is now being conducted (collectively,
the "Dakota Permits"), except where the failure to have any of Dakota Permits
would not, individually or in the aggregate, have a Material Adverse Effect on
Dakota, and, as of the date of this Agreement, (i) all of the Dakota Permits
are valid and in full force and effect, (ii) each of Dakota and the Dakota
Subsidiaries is in compliance with its respective Dakota Permits, and (iii) no
revocations, suspensions or cancellations of any of the Dakota Permits are
pending or threatened.

(b) Neither Dakota nor any of the Dakota Subsidiaries is in violation of, or
has been charged with, is in receipt of any notice or warning of, or to the
Knowledge of Dakota (as hereinafter defined), under investigation with respect
to, any failure or alleged failure to comply with (A) its articles, bylaws or
other organizational documents, (B) to the Knowledge of Dakota any applicable
law, ordinance, administrative or government rule or regulation (except for
Environmental Laws, which are addressed in Section 4.12 hereto) or (C) any
order, decree

B-21
<PAGE>

or judgment of any Governmental Entity having jurisdiction over Dakota or any
of the Dakota Subsidiaries, except, in the case of clauses (A), (B) and (C),
for any violations that, individually or in the aggregate, would not have a
Material Adverse Effect on Dakota.

(c) Except as set forth on Schedule 4.7(c), each material contract is in
full force and effect and no event of default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event of
default exists or, upon the consummation by Dakota of the transactions
contemplated by this Agreement, will exist under any indenture, mortgage, loan
agreement, note or other agreement or instrument for borrowed money, any
guarantee of any agreement or instrument for borrowed money or any lease,
contractual license or other agreement or instrument to which Dakota or any of
the Dakota Subsidiaries is a party or by which Dakota or any Dakota Subsidiary
is bound or to which any of the properties, assets or operations of Dakota or
any Dakota Subsidiary is subject, other than any defaults that, individually
or in the aggregate, would not have a Material Adverse Effect on Dakota.
"Knowledge of Dakota" means the actual knowledge of Robert C. Pohlad, John F.
Bierbaum and Brad Williams.

Section 4.8 Tax Matters.

(a) Subchapter S Election. Dakota and each Dakota Subsidiary is a "small
business corporation" for which a valid qualified subchapter S subsidiary
election under Section 1361(b)(3) of the Internal Revenue Code 1986, as
amended (the "Code") and the equivalent provisions of all applicable state
income tax statutes has been in effect since January 1, 1997. As of the date
of this Agreement, Dakota has not taken any action which might have caused the
revocation of such Subchapter S status.

(b) All Returns Filed. Pohlad, Dakota and each Dakota Subsidiary has filed
all Tax Returns that it was required to file. All such Tax Returns were
correct and complete in all material respects. All Taxes owed by Pohlad,
Dakota and each Dakota Subsidiary (whether or not shown on any Tax Return)
have been paid. Except as disclosed on Schedule 4.8(b), neither Pohlad, Dakota
nor any of the Dakota Subsidiaries is currently the beneficiary of any
extension of time within which to file any Tax Return.

(c) Taxes Paid. Dakota and each Dakota Subsidiary has withheld and paid all
Taxes required under Federal or any state law (or the laws of any other
jurisdiction) to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, shareholder or
other third party.

(d) Tax Disputes. Except as disclosed on Schedule 4.8(d), there is no
dispute or claim concerning any Tax liability of Dakota or any Dakota
Subsidiary and no deficiencies for any Taxes have been asserted or, to
Dakota's Knowledge, threatened, and no audit of any such Tax Returns is
currently underway or, to Dakota's Knowledge, threatened. There are no
outstanding agreements by Dakota or any Dakota Subsidiary for the extension of
time for the assessment of any Tax with respect to Dakota or any Dakota
Subsidiary and neither Dakota nor any Dakota Subsidiary has waived any statute
of limitations with respect to any Tax.

(e) Elections and Agreements. Neither Dakota nor any Dakota Subsidiary has
filed a consent pursuant to Section 341(f) of the Code. Except as disclosed on
Schedule 4.8(e), neither Dakota nor the Dakota Subsidiaries are a party to any
tax sharing or allocation agreement.

Section 4.9 Actions and Proceedings.

(a) Except as set forth on Schedule 4.9, there are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity against
or involving (i) Dakota or any of the Dakota Subsidiaries, (ii) any of the
present or former directors, officers, employees, consultants, agents or
stockholders of Dakota or any of the Dakota Subsidiaries, as such, (iii) any
of Dakota or Dakota Subsidiaries' properties, assets or business or (iv) any
Dakota Plan (as hereinafter defined) that, in the case of clauses (i), (ii),
(iii) or (iv) individually or in the aggregate, would have a Material Adverse
Effect on Dakota.

B-22
<PAGE>

(b) As of the date of this Agreement, there are no actions, suits or claims
or legal, administrative or arbitrative proceedings or investigations pending
or, to the Knowledge of Dakota, threatened against or involving (i) Dakota or
any of the Dakota Subsidiaries, (ii) any of Dakota or Dakota Subsidiaries'
present or former directors, officers, employees, consultants, agents or
stockholders, as such, (iii) any of Dakota or Dakota Subsidiaries' properties,
assets or business or (iv) any Dakota Plan that, in the case of clauses (i),
(ii), (iii) or (iv) individually or in the aggregate, would have a Material
Adverse Effect on Dakota or relate to the transactions contemplated by this
Agreement.

Section 4.10 Certain Agreements. As of the date of this Agreement, neither
Dakota nor any of the Dakota Subsidiaries is a party to any oral or written
agreement or plan, including any stock option plan, stock appreciation rights
plan, restricted stock plan, stock purchase plan, Dakota Other Benefit
Obligation or Dakota Plan (as both are defined in Section 4.11), any of the
benefits of which will be increased (except as provided in Section 7.13
hereof), or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Agreement. Neither Dakota nor any
Dakota Subsidiary is a party to any termination benefits agreement or
severance agreement or employment agreement, one trigger of which would be the
consummation of the transactions contemplated by this Agreement.

Section 4.11 Employee Benefit Matters.

(a) As used in this Section 4.11, the following terms have the meanings set
forth below:

"Dakota Other Benefit Obligation" means all material obligations,
arrangements, or customary practices, whether or not legally enforceable,
to provide benefits, other than salary, as compensation for services
rendered, to present or former directors, employees, or agents, other than
with respect to any Dakota Plan. This includes sabbatical policies,
severance payment policies, and material fringe benefits within the meaning
of Code (S) 132.

"Dakota Plan" means (i) all employee benefit plans (as defined in ERISA
(S) 3(3)) of which Dakota or the Dakota Subsidiaries is a Plan Sponsor (as
defined in ERISA (S) 3(16)(B)), or to which Dakota or the Dakota
Subsidiaries otherwise contributes or in which Dakota or the Dakota
Subsidiaries otherwise participates, or (ii) all Title IV Plans and Multi-
Employer Plans (as defined in ERISA (S) 3(37)(A)) of which an ERISA
Affiliate is a Plan Sponsor or otherwise contributes or currently
participates.

"Dakota VEBA" means a voluntary employees' beneficiary association under
Code (S) 501(c)(9) whose members include employees of Dakota or the Dakota
Subsidiaries.

"ERISA Affiliate" means any other person that, together with Dakota or
any of the Dakota Subsidiaries, would be treated as a single employer under
Code (S) 414(b), (c) or, solely with respect to matters relating to Code
(S) 412 or ERISA (S)(S) 302 or 4007, (m).

"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

"Title IV Plans" means all Dakota Plans that are subject to Title IV of
ERISA, 29 U.S.C. (S) 1301 et seq., other than Multi-Employer Plans.

(b) (i) Schedule 4.11(b)(i) attached hereto sets forth a complete and
accurate list of all Dakota Plans, Dakota Other Benefit Obligations, and
Dakota VEBAs, and identifies as such all Dakota Plans that: (A) are defined
benefit plans (as defined in ERISA (S) 3(35)); (B) meet or purport to meet the
requirements of Code (S) 401(a); or (C) are Title IV Plans.

(ii) None of the Dakota Plans set forth on Schedule 4.11(b)(i) is a Multi-
Employer Plan and none of Dakota, any of the Dakota Subsidiaries or any ERISA
Affiliate has any assessed or potential liability due to a complete or partial
withdrawal from or a termination or reorganization of a Multi-Employer Plan.
No circumstances exist that could reasonably be expected to result in any such
liability to Dakota, any Dakota Subsidiary or any ERISA Affiliate.

B-23
<PAGE>

(iii) Except as set forth in Schedule 4.11(b)(iii) or as required by
applicable law, no Dakota Plans provide retiree health or life insurance
benefits.

(c) Dakota has delivered or made available to PPR all documents, insurance
policies and contracts comprising, describing or relating to each Dakota Plan,
Dakota Other Benefit Obligation, or Dakota VEBA and of any related trust; as
well as all required filings for each of the above filed with government
authorities for each of the three most recent plan years.

(d) Except as set forth in Schedule 4.11(d) attached hereto:

(i) Dakota or the Dakota Subsidiaries have performed in all material
respects all of their respective obligations whether as plan administrator,
fiduciary, plan sponsor or contributing employer under all Dakota Plans,
Dakota Other Benefit Obligations, and Dakota VEBAs in a timely manner and
have made all required entries in their financial records and statements
for all obligations and liabilities that have accrued but are not due. No
written or oral statement has been made by Dakota or the Dakota
Subsidiaries to any Person with regard to any Dakota Plan or Dakota Other
Benefit Obligation not in accordance with such plan or other benefit
obligation which could reasonably be expected to have a Material Adverse
Effect on Dakota or the Dakota Subsidiaries.

(ii) Dakota, the Dakota Subsidiaries and each Dakota Plan, Dakota Other
Benefit Obligation, and Dakota VEBA is, to the extent applicable, in
material compliance with applicable law, except for any such failure to
comply which would not result in any material liability to Dakota or any of
the Dakota Subsidiaries. Dakota and all Dakota Subsidiaries have met any
applicable minimum funding standard, and have made all contributions
required, under ERISA (S) 302. The most recent actuarial report for each
Title IV Plan fairly presents the financial condition of each such plan,
and since the date of such report there has been no material adverse change
in the funded status of any such plan.

(iii) Since December 31, 1998, there has been no establishment,
termination or amendment of any Dakota Plan, Dakota VEBA, or Dakota Other
Benefit Obligation.

(iv) Other than routine claims for benefits submitted by participants or
beneficiaries, no claim against, or legal proceeding involving or relating
to, any Dakota Plan, Dakota Other Benefit Obligation, or Dakota VEBA is
pending or, to Dakota's Knowledge, is threatened.

(v) None of Dakota, the Dakota Subsidiaries or any ERISA Affiliate has
terminated any Title IV Plan or incurred any outstanding liability under
Section 4062 of ERISA to the PBGC or to a trustee appointed under Section
4042 of ERISA, and no events have occurred and no circumstances exist that
could reasonably be expected to result in any such liability to Dakota, the
Dakota Subsidiaries or any ERISA Affiliate. All premiums due the PBGC with
respect to the Title IV Plans have been paid.

(vii) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, either alone or
upon the occurrence of subsequent events, (i) result in any payment
becoming due to any current or former employee, officer or director of
Dakota or the Dakota Subsidiaries, (ii) increase any benefits otherwise
payable under any Dakota Plan or Dakota Other Benefit Obligation, (iii)
result in the acceleration of the time of payment or vesting of any
benefits under any Dakota Plan or Dakota Other Benefit Obligation, (iv)
constitute a "change in control" or similar event under any Dakota Plan or
Dakota Other Benefit Obligation or (v) fail to be deductible by reason of
Section 280G of the Code.

Section 4.12 Compliance with Environmental Laws.

(a) Except as set forth on Schedule 4.12, each of Dakota and the Dakota
Subsidiaries, and, to the Knowledge of Dakota, any prior owner or lessee, have
generated, handled, manufactured, treated, stored, used, released,

B-24
<PAGE>

transported and disposed of all Environmentally Regulated Materials (as
defined below) on, beneath, to or from any of the properties owned or operated
by Dakota and the Dakota Subsidiaries in the conduct of their businesses or
any other properties formerly owned, leased or operated by Dakota or the
Dakota Subsidiaries, in compliance with all Environmental Laws.

(b) Except as set forth on Schedule 4.12, Dakota and the Dakota Subsidiaries
have operated all plants, facilities and business operations in compliance
with all Environmental Laws, and all plants, facilities and business
operations are currently in compliance with all Environmental Laws.

(c) Except as set forth on Schedule 4.12, neither Dakota nor the Dakota
Subsidiaries have disposed of or released any Environmentally Regulated
Material in any location which would reasonably be expected to give rise to a
claim of responsibility for investigation or clean-up costs, personal injury
or property damage liability against Dakota or any Dakota Subsidiary by any
third party.

(d) Except as set forth on Schedule 4.12, neither Dakota nor the Dakota
Subsidiaries have received any notices or claims of violations or liabilities
relating to an Environmentally Regulated Material or an Environmental Law,
which notices or claims of violations or liabilities have not been resolved.

Section 4.13 Indebtedness. Schedule 4.13 sets forth a complete listing of
Dakota's and the Dakota Subsidiaries' indebtedness for borrowed money as of
the date hereof, and includes a description of all documents and agreements
which set forth the terms of such indebtedness, the amount of the balance
owing as of the date hereof, the applicable interest rate in effect as of the
date hereof, and a listing of all collateral securing such indebtedness (if
any), and a description of any applicable prepayment penalties or make-whole
amounts that would be payable if such indebtedness were to be paid in full as
of the date hereof.

Section 4.14 Labor Matters. Neither Dakota nor any of the Dakota
Subsidiaries is a party to any collective bargaining agreement or labor
contract, except as set forth in Schedule 4.14. To the Knowledge of Dakota, as
of the date of this Agreement, there are no present or pending applications
for certification of any union as the exclusive bargaining agent for any
employees of Dakota or any Dakota Subsidiaries. To the Knowledge of Dakota,
neither Dakota nor any of the Dakota Subsidiaries has engaged in any unfair
labor practice with respect to any persons employed by or otherwise performing
services primarily for Dakota or any of the Dakota Subsidiaries (the "Dakota
Business Personnel"), and there is no unfair labor practice complaint or
grievance against Dakota or any of the Dakota Subsidiaries by the National
Labor Relations Board or any comparable state agency pending or, to the
Knowledge of Dakota, threatened with respect to Dakota Business Personnel,
except where such unfair labor practice, complaint or grievance would not have
a Material Adverse Effect on Dakota. There is no labor strike, dispute,
slowdown or stoppage pending or, to the Knowledge of Dakota, threatened
against Dakota or any of the Dakota Subsidiaries, except where such dispute,
strike or work stoppage would not have a Material Adverse Effect on Dakota.

Section 4.15 Intellectual Property. Schedule 4.15 sets forth a complete list
of all patents and applications therefor, trademark registrations and
applications therefor, service mark registrations and applications therefor,
copyright registrations and applications therefor, trade names, computer
programs or software which are material to the operation of Dakota's business
and interests in license agreements and all other proprietary rights that are
owned, licensed, sublicensed or used by agreement or permission by Dakota or
any Dakota Subsidiary and used in the continued operation of Dakota's business
(collectively, "Dakota Intellectual Property"). Except as otherwise set forth
on Schedule 4.15, Dakota's interest in the Dakota Intellectual Property is
free and clear of any Encumbrance, and constitutes all such property or rights
used by or necessary to the operation of Dakota's business. To Dakota's
Knowledge and except as set forth on Schedule 4.15, the use of the Dakota
Intellectual Property does not conflict with, infringe upon, or misappropriate
any rights held or asserted by any person, or require the consent of any
person. Except as set forth on Schedule 4.15, neither Dakota nor any Dakota
Subsidiary has, in the past two years, received any notice or claim that any
such Dakota Intellectual Property is not valid or enforceable, or of any
infringement upon or conflict with any patent, trademark, service mark,
copyright, trade name or trade secret of any third party by Dakota or any
Dakota Subsidiary or of any claim by any third party alleging any such

B-25
<PAGE>

infringement or conflict, and, in the past two years, neither Dakota nor any
Dakota Subsidiary has given any notice of infringement to any third party with
respect to any of the Dakota Intellectual Property. Dakota has paid all
required license fees related to all software used in the operation of its
business.

Section 4.16 Title to Assets; Insurance. Except as described on Schedule
4.16, Dakota and the Dakota Subsidiaries have good and marketable title to all
real property and good title to all of the personal property and assets which
they purport to own, and which are necessary to carry on its business, in each
case free and clear of all Encumbrances except for Permitted Exceptions (as
defined in Section 4.17). Dakota and the Dakota Subsidiaries have in full
force and effect policies of insurance that are customary for businesses of
similar size in similar industries and consistent with sound business
practice.

Section 4.17 Real Property.

(a) Schedule 4.17(a) describes all real properties owned or leased by Dakota
and the Dakota Subsidiaries (the "Dakota Real Property"), the nature of the
interest of Dakota or the Dakota Subsidiaries and the entity which holds the
interest in those properties and the approximate acreage of each of those
properties. There is no real property (other than the Dakota Real Property)
the use or possession of which by Dakota and the Dakota Subsidiaries is
necessary to carry on its business. Except as described on Schedule 4.17(b),
Dakota and each of the Dakota Subsidiaries has (i) such title to the Dakota
Real Property as is legally sufficient for the current use thereof in its
business as presently conducted, (ii) good and marketable indefeasible title
in fee simple (except for Permitted Exceptions, as hereinafter defined) to all
Dakota Real Property shown in Schedule 4.17(a) as owned by it (the "Dakota
Owned Real Property") and (iii) valid leaseholds under valid and enforceable
leases in all Dakota Real Property shown on Schedule 4.17(a) as leased by it.
The Dakota Real Property is owned or leased by Dakota and the Dakota
Subsidiaries free and clear of all matters except for Permitted Exceptions.
Except as set forth in Schedule 4.17(b), none of the Dakota Real Property is
subject to any lease (other than the Dakota Leases (as hereinafter defined)),
sublease, license or other agreement granting to any person any right to the
use, occupancy or enjoyment thereof (or any portion thereof). None of the
Permitted Exceptions materially interferes with or has interfered with the
maintenance, use or operation of the Dakota Real Property. "Permitted
Exceptions" means (i) matters listed or described on Schedule 4.17(b), (ii)
easements, covenants, rights-of-way and other Encumbrances or restrictions
which do not, individually or in the aggregate, materially detract from the
value or impair the present and continued use, operation and maintenance of
the property subject thereto, or impair the operation of Dakota or any of the
Dakota Subsidiaries, (iii) real estate taxes not yet due or payable and (iv)
Encumbrances existing at the date of this Agreement which are set forth on
Schedule 4.17(a).

(b) None of the leases identified in Schedule 4.17(a) (collectively, the
"Dakota Leases") has been modified or amended, and no notice of termination
has been delivered with respect thereto, except as set forth in Schedule
4.17(b). Except as set forth on Schedule 4.17(c), neither Dakota nor any of
the Dakota Subsidiaries, nor any other person, is in breach of or default
under any Dakota Lease (and no event has occurred which, with due notice or
lapse of time or both, may constitute such a breach or default).

(c) To the Knowledge of Dakota, the buildings, driveways and all other
structures and improvements upon the Dakota Real Property are all within the
boundary lines of the applicable property or have the benefit of valid
easements or other legal rights and there are no encroachments thereon that
would affect the use thereof.

(d) To the Knowledge of Dakota, all buildings, structures, improvements,
equipment, facilities, plants and fixtures owned or leased by Dakota and the
Dakota Subsidiaries conform in all material respects to all applicable codes
and rules adopted by national and local associations and boards and insurance
underwriters, and all such buildings, structures, improvements and fixtures
are in good operating condition and repair. There are no outstanding
requirements or recommendations by any insurance company which has issued a
policy covering any such property, or by any board of fire underwriters or
other body exercising similar functions, requirement or recommending any
repairs or work to be done on any such property.

B-26
<PAGE>

(e) To the Knowledge of Dakota, all public utilities required for the
operation of such properties either enter such properties through adjoining
public streets or, if they pass through adjoining private land, do so in
accordance with valid public or private easements which will inure to the
benefit of Dakota and the Dakota Subsidiaries and their respective successors
and assigns. All of the public utilities mentioned above are installed and
operating, and all installation and connection charges are paid in full.

(f) To the Knowledge of Dakota, the plumbing, electrical, heating, air
conditioning, elevator, ventilating and all other mechanical or structural
systems and equipment in the buildings or improvements located on the Dakota
Real Property and any manufacturing systems and components located thereof are
in good working order and condition, and the roof, basement and foundation
walls of such buildings and improvements for which Dakota or the Dakota
Subsidiaries is responsible (as owner or as lessee under any Dakota Lease) are
in good condition and free of leaks and other defects. All such mechanical and
structural systems and equipment and such manufacturing systems and components
and such roofs, basements and foundation walls for which a person other than
Dakota or the Dakota Subsidiaries is responsible are in good working order and
condition and free of leaks and other defects.

(g) To the Knowledge of Dakota, Dakota or the Dakota Subsidiaries has the
uninterrupted use of any easements for ingress and egress for all of the
Dakota Real Property owned or leased by Dakota or the Dakota Subsidiaries, as
the case may be. The Dakota Real Property has full and uninterrupted access to
and from public roads and Dakota has no Knowledge of any fact or condition
which would result in the termination of such access.

(h) Neither Dakota nor the Dakota Subsidiaries is the landlord or lessor
under any lease, sublease or other occupancy agreement affecting any of the
Dakota Real Property.

Section 4.18 Title Insurance. Schedule 4.18 sets forth a true, correct and
complete list and summary description of all of the policies of title
insurance and legal opinions with respect to title insurance insuring Dakota's
and the Dakota Subsidiaries' interest in the Dakota Owned Real Property
(collectively, the "Dakota Title Policies"). Dakota has furnished a true,
correct and complete copy of all such Dakota Title Policies to PPR. All of the
Dakota Title Policies are in full force and effect. Dakota shall maintain, and
shall use its best efforts to cause the Dakota Subsidiaries to maintain, the
coverage under the Dakota Title Policies in full force and effect through the
date of the Closing. Neither Dakota nor the Dakota Subsidiaries is in material
default under any provisions of the Dakota Title Policies. There is no claim
by Dakota, the Dakota Subsidiaries or any other person pending under any of
the Dakota Title Policies as to which coverage has been questioned, denied or
disputed by the underwriters or issuers of such Dakota Title Policies.

Section 4.19 Zoning. To the Knowledge of Dakota, all of the Dakota Real
Property and the buildings, structures, improvements and fixtures located
thereon, and the respective businesses conducted thereat and the manner of
such conduct, conform in all respects to all existing zoning, building and
other applicable laws, rules and regulations and the operation of the Dakota
Real Property and the improvements located thereon is not in violation of any
such laws, rules or regulations. To the Knowledge of Dakota, all uses of the
Dakota Real Property and the improvements located thereon are "as-of-right"
and do not require any non-conforming use rights, nor have they been
"grandfathered" under any pre-existing laws, rules or regulations.

Section 4.20 Brokers. No broker, investment banker or other person, other
than NationsBanc/Montgomery Securities, the fees and expenses of which will be
paid by Dakota is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Dakota.

Section 4.21 Relationships. Except as otherwise disclosed in Schedule 4.21,
Dakota's relationships with its franchisors, agents, brokers, dealers,
distributors, representatives, licensees, customers and suppliers are
continuing, and there has been no material change in the scope of such
relationships during the last year with any of such parties or similar parties
with which Dakota has done business during the last year. All sales and
performances of services by Dakota in connection with its business are in
material compliance with all of Dakota's

B-27
<PAGE>

representations, warranties and agreements, express or implied, with respect
to such sales and performances, except for customary returns and allowances.

Section 4.22 Compliance with Quality Standards. All water used in the
production process of Dakota's business conforms, in all material respects, to
(i) the quality standards required by Dakota's or the Dakota Subsidiaries'
franchisors, including PepsiCo, (ii) internal quality standards required by
Dakota, and (iii) any local quality standards.

Section 4.23 Year 2000 Compliance. To the extent that any functionality of
any computer system used by Dakota is dependent upon or interdependent with
the use or specification of any calendar date, Dakota has used commercially
reasonable efforts in implementing a plan pursuant to which any such computer
system shall be "Year 2000 Compliant," except where failure to do so will not
result in a Material Adverse Effect on Dakota. For purposes of this Agreement,
the term Year 2000 Compliant means that neither the performance nor the
functionality of such computer systems shall be materially affected by dates
in, into and between the 20th and 21st centuries. To be deemed Year 2000
Compliant, such computer systems shall conform in all material respects to the
following basic requirements (i) no value for a current date shall cause any
interruption in Dakota's operations in which the computer system is used; and
(ii) any date-based functions shall operate and perform in a consistent manner
for dates in, into and between the 20th and 21st centuries and such computer
systems shall calculate, manipulate and represent properly inputted dates
correctly.

Section 4.24 Disclosure. No representation or warranty of Dakota in this
Agreement or in any certificate, schedule, statement or other document
furnished or to be furnished by Dakota to PPR pursuant hereto or in connection
with the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated herein or therein or necessary to make the statements
herein or therein not misleading.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF POHLAD

Pohlad represents and warrants to PPR as follows:

Section 5.1 Organization; Title; Authority. Pohlad is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Minnesota and has the requisite corporate power and authority to own, lease
or operate its properties and to carry on its business as now being conducted.
Pohlad is the beneficial and record owner of 1,000 number of shares of Dakota
Stock and owns such shares free and clear of all Encumbrances except for
restrictions on transfer imposed by federal securities laws. Pohlad has the
authority to execute, deliver and perform its obligations under this
Agreement. Pohlad's Board of Directors have approved, or will approve prior to
the Closing, as the case may be, this Agreement and the transactions
contemplated hereby, including, but not limited to, the Exchange, the
formation of DakBev, the DakBev Merger, the formation of Dakota, LLC, the
Pohlad Contribution and the P-PRT Contribution. This Agreement has been duly
executed and delivered by Pohlad and (assuming the valid authorization,
execution and delivery of this Agreement by PPR and Dakota) constitutes a
legal, valid and binding obligation of Pohlad and is enforceable against
Pohlad in accordance with its terms, except to the extent that (i) enforcement
may be limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to or limiting
creditors' remedies and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief are subject to certain equitable defenses
and to the discretion of the court or other tribunal before which any
proceeding therefor may be brought.

Section 5.2 No Breach. The execution and delivery of this Agreement by
Pohlad and the consummation by Pohlad of the transactions contemplated hereby,
including, but not limited to, the Exchange, the formation of DakBev, the
DakBev Merger, the formation of Dakota, LLC, the Pohlad Contribution and the
P-PRT Contribution does not and will not contravene, violate or constitute, or
result in a breach or default (with or without notice or

B-28
<PAGE>

lapse of time, or both) under, the charter or organizational documents of
Pohlad, any judgement, order, decree, statute, law, ordinance, rule or
regulation or any contract or agreement by which Pohlad is bound, or result in
the creation or imposition of any Encumbrance (other than under this
Agreement) on the shares of the Dakota Stock owned by Pohlad.

Section 5.3 No Consents. Except as set forth in Schedule 5.3 hereto, no
consent or authorization of, or registration, declaration or filing with, any
person, is required to be made or received by Pohlad in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, including, but not limited to, the Exchange,
the formation of DakBev, the DakBev Merger, the formation of Dakota, LLC, the
Pohlad Contribution and the P-PRT Contribution.

Section 5.4 Entire Interest. The 1,000 shares of Dakota Stock owned by
Pohlad constitutes Pohlad's entire ownership interest in Dakota, and Pohlad
has no rights to acquire any additional shares of Dakota Stock or any other
equity interest in Dakota. At the Closing, Pohlad shall have all requisite
power and authority, including voting control of Dakota, LLC, necessary to
cause Dakota, LLC to exchange the DakBev Membership Units for the Exchange
Consideration as set forth in Article II hereof.

Section 5.5 Accredited Investor Status; PPR Information. Pohlad is an
"accredited investor" as defined in Rule 501(a) of Regulation D promulgated
under the Exchange Act.

Section 5.6 Unregistered Securities; Investment Intent. The shares of PPR
Class B Common Stock have not been registered under the Securities Act or
relevant state securities laws pursuant to exemptions from registration under
the Securities Act and such laws. PPR's reliance upon such exemptions is
predicated in part on Pohlad's representations to PPR as contained herein. The
shares of PPR Class B Common Stock are being acquired for the account of
Dakota, LLC and for investment and without the intention of reselling,
transferring, or redistributing the same. At the time Dakota, LLC receives
such shares, it will have no agreement for the transfer or disposition of any
of such shares.

Section 5.7 Restrictions on Transfer. Pohlad acknowledges that PPR will
place a restrictive legend on the certificate(s) representing the shares of
PPR Class B Common Stock received by Dakota, LLC pursuant to this Agreement,
containing substantially the following language:

PPR will place a stop transfer order on the certificate(s) representing the
shares to assure compliance with this Agreement and the matters referenced
above.

ARTICLE VI

COVENANTS RELATING TO CONDUCT OF BUSINESS

Section 6.1 Actions by PPR. Except as expressly permitted by clauses (a)
through (j) of this Section 6.1 or as otherwise required by this Agreement,
during the period from the date of this Agreement through the date of Closing,
PPR shall, and shall cause each of the PPR Subsidiaries to, in all material
respects carry on its business in the ordinary course as currently conducted
and, to the extent consistent therewith, use reasonable best efforts to
preserve intact its current business organizations, keep available the
services of its current officers and employees and preserve its relationships
and goodwill with customers, suppliers and others having business dealings
with it.

B-29
<PAGE>

Without limiting the generality of the foregoing, and except as otherwise
expressly contemplated by this Agreement, PPR shall not, and shall not permit
any of the PPR Subsidiaries to, without the prior written consent of Dakota:

(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire any such shares, voting securities, equity equivalent or
convertible securities, or agree to any amendment to the terms of any
option, warrant or convertible security, other than (x) the grant of stock
options to employees of PPR or any of the PPR Subsidiaries under the PPR
Option Plans and the issuance of shares of PPR Stock pursuant to the
exercise thereof in the ordinary course of business consistent with past
practice, (y) the issuance of PPR Stock pursuant to the exercise of
warrants outstanding as of the date hereof that are exercisable or become
exercisable by their terms (as in effect on the date hereof), and (z) the
issuance of PPR Stock as consideration for the acquisitions permitted to be
made by PPR by clause (d) of this Section 6.1;

(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, limited
liability company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, except for (x)
the Delta Acquisition, and (y) acquisitions which do not exceed $50 million
individually or $100 million in the aggregate;

(f) incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than (x) in the ordinary
course of business consistent with past practice (including refinancings of
existing debt), (y) indebtedness, loans, advances, capital contributions
and investments between PPR and any of the PPR Subsidiaries, and (z)
indebtedness incurred to fund the acquisitions permitted by Section 6.1(d)
above, including any amendments necessary to existing loan documents with
Banco Popular to extend the facility to $40 million and replace Banco
Popular as the primary lender with NationsBanc (or an affiliate of
NationsBanc) and other syndication participants.

(g) enter into or adopt, or amend any existing, severance plan, agreement
or arrangement or enter into or amend any PPR Plan, PPR Option Plan or
employment or consulting agreement, other than as required by law and other
than amending the existing PPR option plans to increase the number of
shares available for issuance thereunder;

B-30
<PAGE>

(k) authorize, recommend or announce an intention to do any of the
foregoing, or enter into any contract, agreement, commitment or arrangement
to do any of the foregoing.

Section 6.2 Actions by Dakota.

(a) Dakota Reorganization. Dakota and Pohlad hereby agree to take all
actions reasonably necessary or appropriate to cause the Dakota Reorganization
to be consummated prior to the Closing in accordance with Article I hereof. As
used herein, "Dakota Reorganization" shall mean, collectively, (i) the
formation of each of DakBev and Dakota, LLC, (ii) the DakBev Merger, (iii) the
Pohlad Contribution and (iv) the P-PRT Contribution. Upon the completion of
the Dakota Reorganization, Pohlad shall have voting control of Dakota, LLC,
and shall have all necessary power and authority to cause Dakota, LLC to
satisfy its obligations under this Agreement, including consummating the
Exchange.

(b) Conduct of Dakota's Business. Except as expressly permitted by clauses
(i) through (xi) of this Section 6.2(b) or as otherwise contemplated by this
Agreement, during the period from the date of this Agreement through the date
of Closing, each of Dakota, DakBev and Dakota, LLC, as the case may be, shall,
and shall cause each of its respective Subsidiaries to, in all material
respects, carry on its business in the ordinary course as currently conducted
and, to the extent consistent therewith, use reasonable best efforts to
preserve intact its current business organizations, keep available the
services of its current officers and employees and preserve its relationships
and goodwill with customers, suppliers and others having business dealings
with it. Without limiting the generality of the foregoing, and except as
otherwise expressly contemplated by this Agreement, none of Dakota, DakBev and
Dakota, LLC, as the case may be, shall and none shall permit any of its
respective Subsidiaries to, without the prior written consent of PPR:

(i) declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital
stock, or otherwise make any payments to its stockholders in their capacity
as stockholders, except cash distributions to its stockholders in their
capacity as such and the distribution of a note receivable in the amount of
$33,400,000 from Dakota to Pohlad, (y) other than in the case of any Dakota
Subsidiary, subdivide, split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock or (z)
purchase, redeem or otherwise acquire, directly or indirectly, any shares
of capital stock of Dakota or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;

(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire any such shares, voting securities, equity equivalent or
convertible securities, or agree to any amendment to the terms of any
option, warrant or convertible security;

(iii) except for the filing of Articles of Merger relating to the DakBev
Merger, amend its Articles of Incorporation or Bylaws;

(iv) except for the DakBev Merger, acquire or agree to acquire by merging
or consolidating with, or by purchasing a portion of the assets of or
equity in, or by any other manner, any business or any corporation,
partnership, limited liability company, association or other business
organization or division thereof or otherwise acquire or agree to acquire
any assets except for (A) acquisitions which do not exceed $1 million
individually or $5 million in the aggregate and (B) transactions that are
in the ordinary course of business consistent with past practice and that
are not material;

B-31
<PAGE>

(v) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than (x) transactions that
are in the ordinary course of business consistent with past practice and
not material to Dakota and the Dakota Subsidiaries taken as a whole and the
distribution of a note receivable in the amount of $33,400,000 from Dakota
to Pohlad.

(vi) incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than (x) indebtedness for
borrowed money incurred in the ordinary course of business consistent with
past practice (including refinancings of existing debt) (y) indebtedness,
loans, advances, capital contributions and investments between Dakota and
any of the Dakota Subsidiaries, and (z) indebtedness necessary to fund the
acquisitions permitted by Section 6.2(b)(iv) above.

(vii) except as may be necessary or proper to consummate the DakBev
Merger, enter into or adopt, or amend any existing, severance plan,
agreement or arrangement or enter into or amend any Dakota Plan or
employment or consulting agreement, other than as required by law;

(viii) knowingly violate or knowingly fail to perform any material
obligation or duty imposed upon it or any Dakota Subsidiary by any
applicable material federal, state or local law, rule, regulation,
guideline or ordinance;

(ix) take any action, other than reasonable and usual actions in the
ordinary course of business consistent with past practice, with respect to
accounting policies or procedures (other than actions required to be taken
by GAAP);

(x) authorize, recommend, propose or announce an intention to do any of
the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing; or

(xi) except as set forth on Dakota's 1999 Capital Expenditure Budget,
enter into any other material transaction or make any other capital
expenditure not in the ordinary course of business consistent with past
practice.

ARTICLE VII

ADDITIONAL AGREEMENTS

Section 7.1 PPR Stockholder Meeting. PPR shall call a meeting of its
stockholders (the "PPR Stockholder Meeting") for the purpose of: (a) approving
the transactions contemplated hereby, including, but not limited to, the Share
Issuance and the Exchange; (b) approving an increase in the number of
authorized shares of PPR's Class B Common Stock to 145,000,000 shares (the
"PPR Charter Amendment"); and (c) approving the amendments to the PPR Option
Plans to increase the number of shares available for issuance thereunder and
(d) approving such other matters as PPR's Board of Directors shall determine.
PPR shall prepare and file with the SEC the Proxy Statement (as hereinafter
defined) for the purpose of soliciting proxies for the matters brought before
the PPR Stockholder Meeting. PPR will, through the PPR Board of Directors with
the concurrence of the PPR Special Committee, recommend to its stockholders
approval of such matters and shall not withdraw such recommendation; provided,
however, that the PPR Special Committee shall not be required to make, and
shall be entitled to withdraw, such recommendation if the PPR Special
Committee concludes in good faith on the basis of the advice of Willkie Farr &
Gallagher that the making of, or the failure to withdraw, such recommendation
would violate the fiduciary obligations of the PPR Special Committee under
applicable law; provided further, however, that in no case shall any change in
the trading price of PPR Class B Common Stock be used as a basis for any such
conclusion. Notwithstanding any recission of the recommendation by the PPR
Special Committee that is permitted by this Section 7.1, PPR shall remain
obligated to call the PPR Stockholder Meeting.

Section 7.2 Preparation of the Proxy Statement. PPR and Dakota each agree,
as to itself and its Subsidiaries, that none of the information supplied or to
be supplied by it or its Subsidiaries for inclusion or incorporation by
reference in the Proxy Statement and any amendment or supplement thereto will,
at the date of mailing to the

B-32
<PAGE>

PPR stockholders and at the time of the PPR Stockholder Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. "Proxy Statement" shall mean the proxy statement for the PPR
Stockholder Meeting to be held for the purpose of obtaining the approvals
required for the transactions contemplated hereby.

Section 7.3 Access to Information and Properties. Subject to currently
existing contractual and legal restrictions applicable to PPR or to Dakota,
DakBev or Dakota, LLC, as the case may be, or any of their Subsidiaries, each
of PPR and Dakota, DakBev or Dakota, LLC, as the case may be, shall, and shall
cause each of the PPR and Dakota, DakBev or Dakota, LLC, as the case may be,
Subsidiaries to, afford to the consultants, accountants, counsel, financial
advisors and other representatives of PPR and Dakota reasonable access to, and
permit them to make such inspections and investigations (including, without
limitation, environmental audits, assessments, and sub-surface investigations)
as they may reasonably require of, at mutually agreed upon times during normal
business hours during the period from the date of this Agreement through the
Closing, all their respective properties, books, contracts, commitments and
records (including, without limitation, the work papers of independent
accountants, if available and subject to the consent of such independent
accountants) and, during such period, PPR and Dakota, DakBev or Dakota, LLC,
as the case may be, shall, and shall cause each of the PPR and Dakota
Subsidiaries to, furnish promptly to the other (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and
(ii) all other information concerning its business, properties and personnel
as the other may reasonably request.

Section 7.4 New Credit Facility. PPR shall use its reasonable best efforts
to obtain a credit facility of up to $160 million on terms reasonably
acceptable to PPR (the "New Credit Facility"). The purposes of the New Credit
Facility shall include payment of certain debt owed by Delta Beverage Group,
Inc. ("Delta"), PPR and Dakota, along with financing for working capital and
acquisitions.

Section 7.5 NYSE Listing. PPR shall use its reasonable best efforts to cause
the shares of PPR Class B Common Stock to be issued in connection with the
Exchange to be approved for listing on the NYSE subject to official notice of
issuance.

Section 7.6 Fees and Expenses. Whether or not the Exchange is consummated,
and except as otherwise provided in Section 9.2, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby including, without limitation, the fees and disbursements of counsel,
financial advisors and accountants, shall be paid by the party incurring such
costs and expenses.

Section 7.7 Reasonable Best Efforts to Consummate the Exchange. Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties agrees to use reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate, in the most expeditious manner practicable, the DakBev Merger, the
Pohlad Contribution, the Exchange and the other transactions contemplated by
this Agreement, including, but not limited to: (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from all
Governmental Entities and the making of all necessary registrations and
filings (including filings with Governmental Entities) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by this
Agreement. No party to this Agreement shall consent to any voluntary delay of
the consummation of the Exchange at the behest of any Governmental Entity
without the consent of the other parties to this Agreement, which consent
shall not be unreasonably withheld.

B-33
<PAGE>

Section 7.8 Public Announcements. Dakota and PPR each shall consult with the
other prior to issuing any press releases or otherwise making public
announcements with respect to the Exchange and the other transactions
contemplated by this Agreement and prior to making any filings with any third
party and/or any Governmental Entity with respect thereto, except as may be
required by law or by obligations pursuant to any listing agreement with or
rules of the NYSE.

Section 7.9 State Takeover Laws. If any "fair price," "business combination"
or "control share acquisition" statute or other similar statute or regulation
shall become applicable to the transactions contemplated hereby, PPR and
Dakota and their respective Boards of Directors shall use their reasonable
best efforts to grant such approvals and take such actions as are necessary so
that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to minimize the
effects of any such statute or regulation on the transactions contemplated
hereby.

Section 7.10 Indemnification. From and after the Closing, PPR agrees to, and
to cause DakBev to, indemnify and hold harmless all past and present officers,
directors and managers of Dakota, DakBev, and of the Dakota Subsidiaries to
the maximum extent permitted by the Delaware General Corporation Law and
Delaware Limited Liability Company Act, as applicable (including advancing
expenses and attorneys' fees incurred prior to final disposition of any
proceeding upon receipt of an undertaking by such manager, director or officer
to repay such amount if it shall be ultimately determined that he or she is
not entitled to be indemnified under the Delaware General Corporation Law or
Delaware Limited Liability Company Act), including but not limited to acts or
omissions occurring in connection with the approval of this Agreement, the
filing of the Registration Statement and the consummation of the transactions
contemplated hereby.

Section 7.11 Notification of Certain Matters. PPR shall use its reasonable
best efforts to give prompt notice to Dakota, and Dakota shall use its
reasonable best efforts to give prompt notice to PPR, of: (i) the occurrence,
or non-occurrence, of any event the occurrence, or non-occurrence, of which it
is aware and which would be reasonably likely to cause (x) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect or (y) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied in all material respects, (ii)
any failure of PPR or Dakota, as the case may be, to comply in a timely manner
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder or (iii) any change or event which would be
reasonably likely to have a Material Adverse Effect on PPR or Dakota, as the
case may be; provided, however, that the delivery of any notice pursuant to
this Section 7.11 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.

Section 7.12 Tax Matters. The following provisions shall govern the
allocation of responsibility as between PPR and Pohlad for certain Tax matters
following the Closing.

(a) Tax Periods Ending on or Before the Closing. The parties acknowledge
that the qualified subchapter S subsidiary election currently in effect for
Dakota will be terminated as of the consummation of the DakBev Merger. The
income of Dakota, and the Dakota Subsidiaries, and DakBev, and the DakBev
LLCs, for the period commencing January 1, 1999 and ending as of the date
of the Closing will be included in the Tax Return of Pohlad (the "Pohlad
Return"). The income generated by DakBev following the date of Closing will
be included in the PPR Tax Return.

(b) Cooperation on Tax Matters.

(i) PPR and Pohlad shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing
of Tax Returns pursuant to this Section and any proceedings. Such
cooperation shall include the retention and (upon the other party's
request) the provision of records and information which are reasonably
relevant to any proceedings and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. PPR and Pohlad agree
(A) to retain all books and records with respect to Tax matters
pertinent to Dakota, the Dakota Subsidiaries, DakBev, and the DakBev
LLCs relating to any taxable period beginning before the Closing until
the expiration of the statute of limitations (and, to the extent
notified

B-34
<PAGE>

by PPR or Pohlad, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) to give the other party reasonable
written notice prior to the transferring, destroying or discarding of
any such books and records and, if the other party so requests, PPR or
Pohlad, as the case may be, shall allow the other party to take
possession of such books and records.

(ii) PPR and Pohlad further agree, upon request, to use their best
efforts to obtain any certificate or other document from any Government
Entity or any other person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to,
with respect to the transactions contemplated hereby).

(iii) PPR and Pohlad further agree, upon request, to provide the
other party with all information that either party may be required to
report pursuant to (S) 6043 of the Code and all Treasury Regulations
promulgated thereunder.

(c) Tax Distribution. On or prior to the date of Closing, Pohlad shall
deliver to PPR a statement of the Estimated Tax Liability and Dakota shall
make a distribution to Pohlad in such amount. For purposes of this
Agreement, the term "Estimated Tax Liability" shall mean an amount equal to
45% of the estimated taxable income of Dakota and DakBev for the period
from January 1, 1999 through the date of Closing. In the event the amount
of taxable income: (i) on the Pohlad Return allocable to Dakota and DakBev
or as may be redetermined by the Internal Revenue Service ("IRS") upon
audit, differs from the amount of taxable income on the statement delivered
to PPR pursuant to this Section 7.12(c), Pohlad shall pay (in the event the
taxable income allocable to Dakota and DakBev on the Pohlad Return, or as
redetermined by IRS, is less) to PPR, or PPR shall pay to Pohlad (in the
event the taxable income allocable to Dakota and DakBev in the Pohlad
Return, or as redetermined by IRS, is greater) 45% of the difference in
taxable income allocable to Dakota and DakBev within ten (10) days from the
date the Pohlad Return is filed or the redetermination becomes final and
nonappealable (as the case may be).

(d) Transfer Taxes. All transfer, documentary, sales, use, registration,
value-added and other similar Taxes (including all applicable real estate
transfer Taxes) and related fees (including any penalties, interest and
additions to Tax) (collectively, the "Transfer Taxes") incurred in
connection with this Agreement and the transactions contemplated hereby
shall be shared equally by PPR and Dakota, LLC; provided, however, that PPR
shall pay and hold Dakota, LLC harmless from any such penalties and
additions that would not have arisen but for the negligence of PPR and
Dakota, LLC shall pay and hold PPR harmless from any such penalties and
additions that would not have arisen but for the negligence of Dakota, LLC.
PPR and Dakota, LLC shall cooperate in timely making all filings, returns,
reports and forms as may be required to comply with the provisions of such
Transfer Tax laws.

Section 7.13 Treatment of Dakota Phantom Stock Plan Participants. The
existing Dakota phantom stock plan will be amended, promptly following the
Closing, to increase the value of the participant's interest to reflect the
value of the transaction contemplated by this Agreement and to convert the
rights of participants under such phantom stock plan to a combination of PPR
Class B Common Stock and/or options to acquire PPR Class B Common Stock.

Section 7.14 Title Commitments. Dakota and PPR shall, promptly (and in no
event more than ten (10) days) after the date hereof, order from a title
company reasonably acceptable to the other (the "Title Company") a title
insurance commitment or commitments with respect to all of the Dakota Owned
Real Property and the PPR Owned Real Property, as the case may be, other than
those properties for which the owner already has title insurance. Dakota and
PPR shall use their respective reasonable efforts to cause the Title Company
to issue such title commitments as promptly as feasible and, immediately upon
receipt thereof, shall deliver the title commitments to the other. To the
extent the recipient reasonably objects to any matter(s) reflected therein,
other than Permitted Exceptions, or requests additional information with
respect thereto, the party delivering the title commitments shall use its
reasonable efforts to cause the Title Company to modify and/or supplement the
commitments accordingly. Dakota shall, and shall cause the Dakota Subsidiaries
to, reasonably cooperate with PPR in the event that PPR undertakes to purchase
title insurance and/or order surveys with respect to any or all of the Dakota
Real Property.

B-35
<PAGE>

ARTICLE VIII

CONDITIONS PRECEDENT TO CLOSING

Section 8.1 Conditions to Each Party's Obligation to Effect the
Exchange. The respective obligations of each party to effect the Exchange
shall be subject to the fulfillment at or prior to the Closing of the
following conditions, each of which may be waived only with the consent in
writing of each party not obligated to satisfy the condition:

(a) PPR Stockholder Approval. This Agreement and the transactions
contemplated hereby, including, the Share Issuance, the Exchange, the PPR
Charter Amendment and the PPR Option Plan Amendments shall have been duly
approved by the requisite vote of stockholders of PPR in accordance with
applicable law and the Certificate of Incorporation and Bylaws of PPR.

(b) Listing on the NYSE. The PPR Class B Common Stock issuable in the
Exchange shall have been authorized for listing on the NYSE upon official
notice of issuance.

(c) Governmental Approvals. All authorizations, consents, orders,
declarations or approvals of, or filings with, any Governmental Entity,
which the failure to obtain, make or occur would have the effect of making
the Exchange or any of the transactions contemplated hereby illegal or
would have a Material Adverse Effect on either of PPR or Dakota (assuming
the Exchange had taken place), shall have been obtained or shall have been
made.

(d) Litigation. There shall not be instituted or pending any suit, action
or proceeding by a Governmental Entity or any other person as a result of
this Agreement or any of the transactions contemplated herein which would
have a Material Adverse Effect on either PPR or Dakota (assuming for
purposes of this paragraph (d) that the Exchange shall have occurred).

(e) No Order. No court or other Governmental Entity having jurisdiction
over Dakota, DakBev, Dakota, LLC, or PPR, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect
and has the effect of making this Agreement, the Exchange or any of the
transactions contemplated hereby illegal.

(f) DakBev Merger. The Dakota Reorganization shall have been consummated
in accordance with Article I hereof.

(g) Delta Acquisition. The transactions contemplated by the Exchange
Agreement dated as of the date hereof among PPR, Delta and the Delta
Stockholders (the "Delta Exchange Agreement"), to occur at or prior to the
Closing shall have been consummated or shall be completed simultaneously
with the completion of the Exchange, on substantially the terms set forth
in the Delta Exchange Agreement without giving effect to any waiver or
modification thereof.

(h) New Credit Facility. The New Credit Facility shall have been
obtained.

(i) Metropolitan's Contribution to Dakota, LLC. Metropolitan shall have
made a capital contribution in the form of common stock of PepsiCo to
Dakota, LLC.

Section 8.2 Conditions to Obligation of Dakota, LLC to Effect the
Exchange. The obligation of Dakota, LLC to effect the Exchange shall be
subject to the fulfillment at or prior to the Closing of the following
additional conditions, each of which may be waived by Dakota, LLC in writing:

B-36
<PAGE>

true and correct in all material respects on and as of the date of Closing
as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be
true and correct in all material respects as of such certain date), in each
case except as contemplated or permitted by this Agreement, and Dakota, LLC
and Pohlad shall have received a certificate signed on behalf of PPR by its
Chief Executive Officer and its Chief Financial Officer to such effect.

(b) Dakota, LLC and Pohlad shall have received an opinion of Willkie Farr
& Gallagher, counsel to the PPR Special Committee, in form and substance
reasonably satisfactory to Dakota, LLC and Pohlad, dated the date of
Closing, subject to customary qualifications and limitations for opinions
given in transactions of the kind contemplated hereby, to the effect that
the PPR Class B Common Stock to be issued in the Exchange has been duly
authorized, validly issued, is not subject to further assessment, and has
been issued pursuant to applicable exemptions from registration under the
Securities Act.

(c) The Registration Rights Agreement in the form attached hereto as
Exhibit B shall have been executed and delivered to Pohlad Companies and
Dakota, LLC by PPR.

(d) The consents, waivers, approvals and authorizations set forth on
Schedule 8.2(e) hereto shall have been obtained.

(e) Tax Opinion. Pohlad and Dakota, LLC shall have received an opinion of
Arthur Andersen LLP or another nationally recognized independent accountant
at PPR's election (the "Accountant") in form and substance reasonably
satisfactory to Pohlad and Dakota, LLC, dated the date of Closing,
substantially to the effect that on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state
of facts existing as of the date of Closing, for federal income tax
purposes:

(i) The Exchange should qualify as a nontaxable transfer of property
by Pohlad and Dakota, LLC in exchange for PPR Class B Common Stock
under Section 351 of the Code.

(ii) No gain or loss should be recognized by Pohlad and Dakota, LLC
upon the exchange of the Dakota Stock or the DakBev Membership Units
solely for PPR Class B Common Stock pursuant to the Exchange.

(iii) If Pohlad and/or Dakota receive only PPR Class B Common Stock
in the Exchange, such holder's basis in the PPR Class B Common Stock
received in the Exchange should be the same as the basis of the Dakota
Stock or DakBev Membership Units surrendered in the Exchange reduced by
any liabilities assumed by PPR.

(iv) The holding period of the PPR Class B Common Stock received by
Pohlad and Dakota pursuant to the Exchange should include the period
during which the Dakota Stock and DakBev Membership Units surrendered
in the Exchange were held, provided that Delta Stock or the DakBev
Membership Units surrendered were a capital asset on the date of the
Exchange.

In rendering such opinion, the Accountant may receive and rely upon
representations from PPR, Dakota, Pohlad and Dakota, LLC.

Section 8.3 Conditions to Obligations of PPR to Effect the Exchange. The
obligations of PPR to effect the Exchange shall be subject to the fulfillment
at or prior to the date of Closing of the following additional conditions,
each of which may be waived by PPR in writing:

(a) Performance of Obligations; Representations and Warranties. Dakota,
Dakota, LLC and Pohlad shall have performed in all material respects each
of their agreements contained in this Agreement required to be performed by
them on or prior to the date of Closing, each of the representations and
warranties of Dakota, Dakota, LLC and Pohlad, contained in this Agreement
that is qualified by materiality shall be true and correct on and as of the
date of Closing as if made on and as of such date (other than
representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date) and each of
the representations and warranties that is not so qualified shall be true
and correct in all material respects on and as of the date of Closing as if
made on and as of such date (other than representations and

B-37
<PAGE>

warranties which address matters only as of a certain date which shall be
true and correct in all material respects as of such certain date), in each
case except as contemplated or permitted by this Agreement, and PPR shall
have received certificates signed on behalf of Dakota, Dakota, LLC and
Pohlad, by their respective Chief Executive Officers and Chief Financial
Officers to such effect.

(b) PPR shall have received certificates of good standing from the
Delaware Secretary of State of the State of Delaware for DakBev and Dakota,
LLC, each dated within five days of the Closing.

(d) The consents, waivers, approvals and authorizations set forth on
Schedule 8.3(d) hereto shall have been obtained.

(e) PPR shall have received an opinion of counsel to Dakota, LLC, in form
and substance reasonably satisfactory to PPR, dated the Closing Date,
subject to customary qualifications, limitations and qualifications for
opinions given in transactions of the kind contemplated hereby, to the
effect that (i) DakBev is duly organized, validly existing and in good
standing under the laws of Delaware, (ii) to the knowledge of counsel,
immediately prior to the Closing, Dakota, LLC owned all of the DakBev
Membership Units free and clear of any Encumbrances, (iii) the DakBev
Merger was effected in accordance with applicable law and (iv) all of the
DakBev Membership Units were duly authorized, validly issued and fully paid
and non-assessable.

(f) Each of the representations and warranties of Delta contained in the
Delta Exchange Agreement shall be true and correct in all material respects
on and as of the date of Closing as if made on and as of such date (other
than representations and warranties which address matters only as of a
certain date which shall be true and correct as of such certain date)
without respect to any waiver of or modification to such representations or
warranties by the parties to the Delta Exchange Agreement.

ARTICLE IX

TERMINATION, AMENDMENT AND WAIVER

Section 9.1 Termination. This Agreement may be terminated at any time prior
to the Closing, whether before or after any approval of the matters presented
in connection with the Exchange by the stockholders of PPR:

(a) by mutual written consent of PPR, Pohlad and Dakota.

(b) by PPR on the one hand, or Dakota or Pohlad on the other hand, if the
other party shall have failed to comply in any material respect with any of
its covenants or agreements contained in this Agreement required to be
complied with prior to the date of such termination, which failure to
comply has not been cured within five (5) business days following receipt
by such breaching party of written notice of such failure to comply;
provided, however, that if any such breach is curable by the breaching
party through the exercise of the breaching party's best efforts and for so
long as the breaching party shall be so using its best efforts to cure such
breach, the non-breaching parties may not terminate this Agreement pursuant
to this paragraph;

(c) by either PPR on the one hand, or Dakota or Pohlad on the other hand,
if there has been (i) a breach by the other party of any representation or
warranty that is not qualified as to materiality which has the effect of
making such representation or warranty not true and correct in all material
respects or (ii) a breach by the other party of any representation or
warranty that is qualified as to materiality, in each case which breach has
not been cured within five (5) business days following receipt by the
breaching party of written notice of the breach or except as contemplated
or permitted by this Agreement; provided, however, that if any such breach
is curable by the breaching party through the exercise of the breaching
party's best efforts and for so long as the breaching party shall be so
using its best efforts to cure such breach, the non-breaching party may not
terminate this Agreement pursuant to this paragraph;

B-38
<PAGE>

(d) by PPR on the one hand, or Dakota or Pohlad on the other hand, if the
Exchange has not been effected on or prior to the close of business on
November 30, 1999 (the "Termination Date"); provided, however, that the
right to terminate this Agreement pursuant to this Section 9.1(d) shall not
be available to any party whose failure to fulfill any of its obligations
contained in this Agreement has been the cause of, or resulted in, the
failure of the Exchange to have occurred on or prior to the aforesaid date;

(e) by PPR on the one hand, or Dakota or Pohlad on the other hand, if the
stockholders of PPR do not approve this Agreement and the transactions
contemplated hereby, including the Share Issuance, the Exchange and the PPR
Charter Amendment at the PPR Stockholder Meeting or any adjournment or
postponement thereof; or

(f) by PPR on the one hand, or Dakota or Pohlad on the other hand, if:
(i) there shall be a final, non-appealable order of a federal or state
court in effect preventing consummation of the transactions contemplated
hereby; or (ii) there shall be any final action taken, or any statute,
rule, regulation or order enacted, promulgated or issued or deemed
applicable to the transactions contemplated hereby by any Governmental
Entity which would make consummation of the transactions contemplated
hereby illegal.

The right of any party hereto to terminate this Agreement pursuant to this
Section 9.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.

Section 9.2 Effect of Termination. In the event of termination of this
Agreement by either PPR, Dakota or Pohlad as provided in Section 9.1, this
Agreement shall forthwith terminate and there shall be no liability hereunder
on the part of Dakota, Pohlad, DakBev, Dakota, LLC, PPR, or their respective
officers, managers or directors (except for the entirety of Section 7.6, which
shall survive the termination); provided, however, that nothing contained in
this Section 9.2 shall relieve any party hereto from any liability for any
willful breach of a representation or warranty contained in this Agreement or
the breach of any covenant contained in this Agreement; provided, further,
that in addition to any other remedies available to any party under this
Agreement or at law or in equity, in the event that the Exchange does not
occur as a direct result of breach of this Agreement by a party hereto, the
breaching party shall be responsible for all costs and expenses incurred in
connection with the transactions contemplated hereby by the non-breaching
party, including, but not limited to, the fees and disbursements of all legal,
accounting, financial and other advisers.

Section 9.3 Amendment. This Agreement may be amended by the parties hereto
at any time before or after approval of the matters presented in connection
with the Exchange by the stockholders of PPR, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.

Section 9.4 Waiver. At any time prior to the Closing, the parties hereto may
(i) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.

ARTICLE X

GENERAL PROVISIONS

Section 10.1 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall terminate at the

B-39
<PAGE>

Closing or upon the termination of this Agreement pursuant to Section 8.1, as
the case may be, and no claim for breach of any such representation, warranty
or agreement may be made after Closing or termination of this Agreement, as
the case may be, except that (i) Article II shall survive the Closing; (ii)
the representations and warranties of PPR set forth in Sections 3.1, 3.2, 3.3
and 3.4, and the representations and warranties of Pohlad set forth in
Sections 5.1-5.7 shall survive the Closing indefinitely; and (iii) the
agreements set forth in Sections 7.3, 7.5, 7.6, 7.8, 7.10, 7.12 and 7.13 and
this Article IX shall survive the Closing, and those set forth in Sections 7.8
and 9.2 and this Article IX shall survive termination.

Section 10.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered personally, one day
after being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

(a) if to PPR, to: Pepsi-Cola Puerto Rico Bottling
Company
P.O. Box 191709
Carr. 865 km 0.4
Barrio Candelaria Arenas
Toa Baja, PR 00949
Attn: President

with a copy to: Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
Attn: Christopher E. Manno, Esq.

(b) if to Dakota, to Dakota Beverage Company, Inc.
3800 Dain Rauscher Plaza
Minneapolis, MN 55402
Attn: President

with a copy to: Briggs and Morgan, P.A.
2400 IDS Center
80 South Eight Street
Minneapolis, MN 55402
Attn: Brian D. Wenger, Esq.

(c) If to Pohlad, to: Pohlad Companies
3880 Dain Rauscher Plaza
60 South Sixth Street
Minneapolis, MN 55402
Attn: Robert C. Pohlad

(d) And, in all cases, a copy to: Briggs and Morgan, P.A.
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Attn: Brian D. Wenger, Esq.

Section 10.3 Interpretation. When a reference is made in this Agreement to a
Section or Article, such reference shall be to a Section or Article of this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."

B-40
<PAGE>

Section 10.4 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties.

Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder, except
as set forth in Section 7.10.

Section 10.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT THEREOF.

Section 10.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. This Agreement shall inure to the benefit of,
and shall be binding upon, the successors and permitted assigns of the parties
hereto.

Section 10.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent
possible.

Section 10.9 Enforcement of this Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of
the United States or any state having jurisdiction, such remedy being in
addition to any other remedy to which any party is entitled under this
Agreement at law or in equity. Each party hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the United
States District Court located in the State of Delaware (unless such courts
assert no jurisdiction, in which case each party consents to the exclusive
jurisdiction of the courts of the State of Delaware) for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and each party hereto agrees not to commence any action,
suit or proceeding relating thereto except in such courts), and further agrees
that service of any process, summons, notice or document by U.S. registered
mail to the addresses set forth herein shall be effective service of process
for any such action, suit or proceeding brought against the each party in such
court. Each party hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby, in the United
States District Courts located in the State of Delaware (unless such courts
assert no jurisdiction, in which case each party consents to the exclusive
jurisdiction of the courts of the State of Delaware). Each party hereby
further irrevocably and unconditionally waives and agrees not to plead or to
claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.

Section 10.10 Rule of Construction. The parties acknowledge and agree that
each has negotiated and reviewed the terms of this Agreement, assisted by such
counsel as they desired, and has contributed to its revisions. The parties
further agree that the rule of construction that any ambiguities are resolved
against the drafting party will

B-41
<PAGE>

be subordinated to the principle that the terms and provisions of this
Agreement will be construed fairly as to all parties and not in favor of or
against any party.

Section 10.11 Cooperation. Each of the parties to this Agreement agrees to
execute and deliver, without requirement of additional consideration, such
other or additional documents, instruments, agreements or consents necessary to
effectuate the foregoing transaction.

[THIS SPACE INTENTIONALLY LEFT BLANK]

B-42
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed or have caused this
Agreement to be executed by their respective duly authorized officers all as
of the date first written above.

PEPSI-COLA PUERTO RICO BOTTLING
COMPANY

/s/ John F. Bierbaum
By: _________________________________
Name: John F. Bierbaum
Title:Vice President, CFO

DAKOTA BEVERAGE COMPANY, INC.

/s/ Robert C. Pohlad
By: _________________________________
Name: Robert C. Pohlad
Title:Executive Vice President,
CEO

POHLAD COMPANIES

/s/ Robert C. Pohlad
By: _________________________________
Name: Robert C. Pohlad
Title:President

B-43
<PAGE>

APPENDIX C

BEAR STEARNS BEAR, STEARNS & CO. INC.

245 Park Avenue
New York, New York 10167
(212) 272-2000
Facsimile (212) 272-3091

Atlanta . Boston
Chicago Dallas . Los Angeles
New York . San Francisco

Amsterdam . Geneva . Hong Kong
London . Paris . Tokyo

June 28, 1999

Special Committee of the Board of Directors
Pepsi-Cola Puerto Rico Bottling Company
Carretera 865, Km. 0.4
Barrio Candelaria Arenas
Toa Baja, Puerto Rico 00949

Attention:Diego J. Suarez, Jr.
Basil K. Vasiliou

Gentlemen:

We understand that Pepsi-Cola Puerto Rico Bottling Company ("PPO"), Delta
Beverage Group, Inc. ("Delta") and Dakota Beverage Company, Inc. ("Dakota")
are contemplating entering into Exchange Agreements (the "Agreements")
pursuant to which PPO will acquire Delta and Dakota as wholly-owned
subsidiaries (the "Acquisitions"). We further understand that at the effective
time of the Acquisitions, PPO will issue (i) 46,760,000 class B common shares
in exchange for the outstanding common shares of Dakota, and (ii) 18,310,006
class B common shares for the outstanding common shares of Delta. The
aggregate number of class B common shares issued by PPO in exchange for the
aggregate number of shares of common stock of Dakota and Delta is hereinafter
the "Exchange Ratio". You have provided us with a copy of the draft Agreements
in substantially final form.

You have asked us to render our opinion as to whether the Exchange Ratio is
fair, from a financial point of view, to the shareholders of PPO.

In the course of our analyses for rendering this opinion, we have:

1. reviewed the draft Agreements;

2. reviewed PPO's Annual Reports on Form 10-K for the fiscal years ended
September 30, 1996 through 1998 and the three months ended December 31,
1998, and its Quarterly Report on Form 10-Q for the period ended March
31, 1999;

3. reviewed Delta's Annual Reports on Form 10-K for the fiscal years ended
December 31, 1996 through 1998, and its Quarterly Report on Form 10-Q
for the period ended March 31, 1999;

4. reviewed Dakota's audited financial statements for the fiscal years
ended December 31, 1996 through 1998, and its quarterly unaudited
financial statements for the period ended March 31, 1999;

C-1
<PAGE>

5. reviewed certain operating and financial information, including
projections (which projections were updated during the course of our
review), provided to us by the senior management ("Management") of PPO,
Delta, and Dakota, all of whom are the same individuals, relating to the
respective businesses and prospects;

6. met with certain members of Management to discuss the operations,
historical financial statements and future prospects of PPO, Delta and
Dakota;

7. reviewed, and discussed with Management, combination benefits expected
to result from the Acquisitions;

8. reviewed with Management and their tax advisors the status of NOLs and
other tax credits at PPO and Delta, and the effect of the Acquisitions
on such;

9. reviewed certain historical prices, trading volumes and valuation
parameters of the class B common shares of PPO;

10. reviewed certain publicly available financial data, stock market data
and valuation parameters of companies which we deemed generally
comparable to PPO, Delta and Dakota;

11. reviewed the financial terms of certain similar merger and acquisition
transactions which we deemed generally comparable to the Acquisitions
or otherwise relevant to our analysis; and

12. conducted such other studies, analyses, inquiries and investigations,
as we deemed appropriate.

In the course of our review, we have relied upon and assumed, without
independent verification, the accuracy and completeness of the updated
financial and other projections provided to us by Management. With respect to
PPO's, Delta's and Dakota's projected financial results that could be achieved
upon consummation of the Acquisitions, we have assumed that they have been
reasonably prepared on the best currently available estimates and judgments of
Management as to the expected future performance of PPO, Delta and Dakota,
respectively. We have not assumed any responsibility for the independent
verification of any such information or of the projections provided to us and
we have further relied upon the assurances of Management that they are unaware
of any facts that would make the information or projections provided to us
incomplete or misleading. In arriving at our opinion, we have not performed or
obtained any independent appraisal of the assets or liabilities (contingent or
otherwise) of PPO, Delta and Dakota, nor have we been furnished with any such
appraisals. Additionally, at your direction, we have not evaluated the
fairness of each of the Acquisitions separately. Our opinion is necessarily
based on economic, market and other conditions, and the information made
available to us, as of the date hereof. We have assumed that each of the
Acquisitions (i) will qualify as a tax-free "reorganization" within the
meaning of Section 386(a) of the Internal Revenue Code of 1986, as amended and
(ii) will be accounted for as a combination of entities under common control
under United States generally accepted accounting principles.

We have acted as a financial advisor to the Special Committee of the Board
of Directors of PPO in connection with the Acquisitions and will receive a fee
for such services, a substantial portion of which is subject to consummation
of the Acquisitions. In the ordinary course of business, Bear Stearns may
actively trade or hold the equity securities of PPO or the debt securities of
Delta for its own account or for the account of its customers and,
accordingly, may at any time hold a long or short position in such securities.

It is understood that this letter is intended for the benefit and use of the
Special Committee of the Board of Directors of PPO and does not constitute a
recommendation to the Special Committee of the Board of Directors of PPO or
any holders of PPO common stock as to how to vote in connection with the
Acquisitions. This opinion does not address PPO's underlying business decision
to pursue the Acquisitions or the price or the range of prices at which shares
of common stock of PPO may trade subsequent to the consummation of the
Acquisitions. This letter is not to be used for any other purpose, or
reproduced, disseminated, quoted or referred to at any time, in whole or in
part, without our prior written consent; provided, however, that this letter
may be included in its entirety in any proxy statement/prospectus to be
distributed to the holders of PPO common stock in connection with the
Acquisitions.

C-2
<PAGE>

Based on and subject to the foregoing, it is our opinion that as of the date
hereof the Exchange Ratio is fair, from a financial point of view, to the
shareholders of PPO. However, our opinion has no applicability to P-PR
Transfer, LLP.

Very truly yours,

BEAR, STEARNS & CO. INC.

/s/ J. Robert Burton
By: _________________________________
Senior Managing Director

C-3
<PAGE>

APPENDIX D
PepsiAmericas, Inc.

1999 Stock Option Plan

D-1
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
SECTION 1 -- GENERAL...................................................... D-3
1.1. Purpose......................................................... D-3
1.2. Participation................................................... D-3
1.3. Operation, Administration, and Definitions...................... D-3
SECTION 2 -- OPTIONS...................................................... D-3
2.1. Definitions..................................................... D-3
2.2. Exercise Price.................................................. D-3
2.3. Exercise........................................................ D-3
2.4. Payment of Option Exercise Price................................ D-4
2.5. Settlement of Award............................................. D-4
2.6. Automatic Option Grant to Outside Directors..................... D-4
SECTION 3 -- OPERATION AND ADMINISTRATION................................. D-4
3.1. Effective Date.................................................. D-4
3.2. Shares Subject to Plan.......................................... D-4
3.3. General Restrictions............................................ D-5
3.4. Tax Withholding................................................. D-5
3.5. Use of Shares................................................... D-5
3.6. Dividends and Dividend Equivalents.............................. D-6
3.7. Payments........................................................ D-6
3.8. Transferability................................................. D-6
3.9. Form and Time of Elections...................................... D-6
3.10. Agreement With Company.......................................... D-6
3.11. Action by Company or Subsidiary................................. D-6
3.12. Gender and Number............................................... D-6
3.13. Limitation of Implied Rights.................................... D-6
3.14. Evidence........................................................ D-7
SECTION 4 -- CHANGE IN CONTROL............................................ D-7
SECTION 5 -- COMMITTEE.................................................... D-7
5.1. Administration.................................................. D-7
5.2. Powers of Committee............................................. D-7
5.3. Delegation by Committee......................................... D-7
5.4. Information to be Furnished to Committee........................ D-8
SECTION 6 -- AMENDMENT AND TERMINATION.................................... D-8
SECTION 7 -- DEFINED TERMS................................................ D-8
</TABLE>

D-2
<PAGE>

PepsiAmericas, Inc.

Stock Option Plan

SECTION 1

GENERAL

1.1. Purpose. The PepsiAmericas, Inc. 1999 Stock Option Plan (the "Plan")
has been established by PepsiAmericas, Inc. (the "Company") to (i) attract and
retain persons eligible to participate in the Plan; (ii) motivate
Participants, by means of appropriate incentives, to achieve long-range goals;
(iii) provide incentive compensation opportunities that are competitive with
those of other similar companies; and (iv) further identify Participants'
interests with those of the Company's other shareholders through compensation
that is based on the Company's common stock; and thereby promote the long-term
financial interest of the Company and the Subsidiaries, including the growth
in value of the Company's equity and enhancement of long-term shareholder
return.

1.2. Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Individuals those persons who will be granted one or more Awards
under the Plan, and thereby become "Participants" in the Plan. In the
discretion of the Committee, a Participant may be granted any Award permitted
under the provisions of the Plan, and more than one Award may be granted to a
Participant. Awards may be granted as alternatives to or replacement of awards
outstanding under the Plan, or any other plan or arrangement of the Company or
a Subsidiary (including a plan or arrangement of a business or entity, all or
a portion of which is acquired by the Company or a Subsidiary).

1.3. Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 3 (relating to operation and
administration). Capitalized terms in the plan shall be defined as set forth
in the Plan (including the definition provisions of Section 7 of the Plan).

SECTION 2

OPTIONS

2.1. Definitions.

(a) The grant of an "Option" entitles the Participant to purchase shares of
Stock at an Exercise Price established by the Committee. Options
granted under this Section 2 may be either Incentive Stock Options
("ISOs") or Non-Qualified Options ("NQOs"), as determined in the
discretion of the Committee.

(b) An "ISO" is an Option that is intended to satisfy the requirements
applicable to an "incentive stock option" described in section 422(b)
of the Code. ISO grants may be awarded only to Eligible Employees.

(c) An "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the Code. NQO
grants may be awarded to any Eligible Individual.

2.2. Exercise Price. The "Exercise Price" of each Option granted under this
Section 2 shall be established by the Committee or shall be determined by a
method established by the Committee at the time the Option is granted; except
that the Exercise Price of an ISO shall not be less than 100% of the Fair
Market Value of a share of Stock on the date of grant.

Notwithstanding the foregoing, any ISO granted to any 10% or more
shareholder of the Company must be at an option price of at least 110% of the
Fair Market Value of the Stock subject to the Option.

2.3. Exercise. An Option shall be exercisable in accordance with such terms
and conditions and during such periods as may be established by the Committee.

D-3
<PAGE>

2.4. Payment of Option Exercise Price. The payment of the Exercise Price of
an Option granted under this Section 2 shall be subject to the following:

(a) Subject to the following provisions of this subsection 2.4, the full
Exercise Price for shares of Stock purchased upon the exercise of any
Option shall be paid at the time of such exercise (except that, in the
case of an exercise arrangement approved by the Committee and
described in paragraph 2.4(c), payment may be made as soon as
practicable after the exercise).

(b) The Exercise Price shall be payable in cash, cashier's check or by
tendering, by either actual delivery of shares or by attestation,
shares of Stock acceptable to the Committee, and valued at Fair Market
Value as of the day of exercise, or such other consideration, including
a combination of payment methods. Any other method of payment which the
Board or the Committee deems appropriate on the date of such exercise
may also be used.

(c) A Participant may elect to pay the Exercise Price upon the exercise of
an Option by irrevocably authorizing a third party to sell shares of
Stock (or a sufficient portion of the shares) acquired upon exercise of
the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise.

2.5. Settlement of Award. Shares of Stock delivered pursuant to the exercise
of an option shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award
Agreement. The Committee, in its discretion, may impose such conditions,
restrictions and contingencies with respect to shares of Stock acquired
pursuant to the exercise of an Option as the Committee determines to be
desirable.

2.6. Automatic Option Grants to Outside Directors. Upon the conclusion of
each regular annual meeting of the Company's shareholders held after the
Effective Date, each director serving on the Board who is not an Eligible
Employee, and excluding directors who serve on the Board as representatives of
PepsiCo or Pohlad Companies, shall receive an NQO covering 1,000 shares of
stock. Such NQO grants are immediately vested and fully exercisable. The
exercise price shall be the Fair Market Value on the date of issuance. Options
to outside directors under this Section 2.6 shall terminate on the earliest of
(a) the 10th anniversary of the date of grant, (b) the date three months after
the termination of such director's service for any reason other than death or
disability or (c) the date one year after the termination of such director's
service because of death or total and permanent disability.

SECTION 3

OPERATION AND ADMINISTRATION

3.1. Effective Date. Subject to the approval of the shareholders of the
Company, the Plan shall be effective as of September 3, 1999 (the "Effective
Date"); provided, however, that to the extent that Awards are granted under
the Plan prior to its approval by shareholders, the Awards shall be contingent
on approval of the Plan by the shareholders of the Company. The Plan shall be
unlimited in duration and, in the event of Plan termination, shall remain in
effect as long as any Awards under it are outstanding; provided, however,
that, to the extent required by the Code, no ISO may be granted under the Plan
on a date that is more than ten years from the date the Plan is adopted or, if
earlier, the date the Plan is approved by shareholders and, further, no ISO
may be exercised after the expiration of ten years from the date the Award is
granted, or, in the case of options granted to 10% or greater shareholders of
the Company, after the expiration of five years from the date the option is
granted.

3.2. Shares Subject to Plan. The shares of Stock for which Awards may be
granted under the Plan shall be subject to the following:

(a) Subject to the following provisions of this subsection 3.2, the
maximum number of shares of Stock that may be delivered to
participants and their beneficiaries under the Plan shall be equal to
4,000,000 shares of Stock.

D-4
<PAGE>

(b) To the extent any shares of Stock covered by an Award are not delivered
to a Participant or beneficiary because the Award is forfeited or
canceled, or the shares of Stock are not delivered because the Award is
settled in cash or used to satisfy the applicable tax withholding
obligation, such shares shall not be deemed to have been delivered for
purposes of determining the maximum number of shares of Stock available
for delivery under the Plan.

(c) If the exercise price of any stock option granted under the Plan is
satisfied by tendering shares of Stock to the Company (by either
actual delivery or by attestation), only the number of shares of Stock
issued net of the shares of Stock tendered shall be deemed delivered
for purposes of determining the maximum number of shares of Stock
available for delivery under the Plan.

(d) Options granted hereunder shall be treated as ISOs under Code Section
422 only to the extent that the aggregate fair market value
(determined at the time of grant) of Shares exercisable for the first
time by the Participant during any calendar year, in combination with
shares first exercisable under all other plans of the Company and its
Subsidiaries or affiliates, does not exceed $100,000, with any options
or portions of options in excess of such limit (according to the order
in which they were granted) being treated as NQOs.

(e) In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination of exchange of shares),
the Committee shall adjust Awards to preserve the benefits or
potential benefits of the Awards and to prevent dilution and maintain
the proportion and cost of the Stock subject to the Option Awards.
Action by the Committee may include: (i) adjustment of the number and
kind of shares which may be delivered under the Plan; (ii) adjustment
of the number and kind of shares subject to outstanding Awards; (iii)
adjustment of the Exercise Price of outstanding Options; and (iv) any
other adjustments that the Committee determines to be equitable.

(f) The maximum number of shares of stock subject to Options granted to an
Eligible Employee hereunder in any calendar year shall be limited to
250,000, except that this limit shall not apply to an Eligible
Employee in the fiscal year of the Company in which his or her service
as an employee first commences.

3.3. General Restrictions. Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:

(a) Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any shares of Stock under the Plan or
make any other distribution of benefits under the Plan unless such
delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities Act
of 1933), and the applicable requirements of any securities exchange
or similar entity.

(b) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the issuance
may be effected on a non-certificated basis, to the extent not
prohibited by applicable law or the applicable rules of any stock
exchange.

3.4. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the
occurrence of such withholding, may permit such withholding obligations to be
satisfied through cash payment by the Participant, through the surrender of
shares of Stock which the Participant already owns, or through the surrender
of shares of Stock to which the Participant is otherwise entitled under the
Plan.

3.5. Use of Shares. Subject to the overall limitation on the number of
shares of Stock that may be delivered under the Plan, the Committee may use
available shares of Stock as the form of payment for compensation, grants or
rights earned or due under any other compensation plans or arrangements of the
Company or a Subsidiary, including the plans and arrangements of the Company
or a Subsidiary assumed in business combinations.

D-5
<PAGE>

3.6. Dividends and Dividend Equivalents. An Award may provide the
Participant with the right to receive dividend payments or dividend equivalent
payments with respect to Stock subject to the Award (both before and after the
Stock subject to the Award is earned, vested, or acquired), which payments may
be either made currently or credited to an account for the Participant, and
may be settled in cash or Stock as determined by the Committee. Any such
settlements, and any such crediting of dividends or dividend equivalents or
reinvestment in shares of Stock, may be subject to such conditions,
restrictions and contingencies as the Committee shall establish, including the
reinvestment of such credited amounts in Stock equivalents.

3.7. Payments. Awards may be settled in any of the methods described in
Section 2.4. Any Award settlement, including payment deferrals, may be subject
to such conditions, restrictions and contingencies as the Committee shall
determine. The Committee may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish, which may
include provisions for the payment or crediting of interest, or dividend
equivalents, including converting such credits into deferred Stock
equivalents. Each Subsidiary shall be liable for payment of cash due under the
Plan with respect to any Participant to the extent that such benefits are
attributable to the services rendered for that Subsidiary by the Participant.
Any disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.

3.8. Transferability. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.

3.9. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such
times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.

3.10. Agreement With Company. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any
Award to any Participant shall be reflected in such form of written document
as is determined by the Committee. A copy of such document shall be provided
to the Participant. The Participant shall sign a copy of such document, which
shall be referred to in the Plan as an "Award Agreement".

3.11. Action by Company or Subsidiary. Any action required or permitted to
be taken by the Company or any Subsidiary shall be by resolution of its Board,
or by action of one or more members of the Board (including a committee of the
Board) who are duly authorized to act for the Board, or (except to the extent
prohibited by applicable law or applicable rules of any stock exchange) by a
duly authorized officer of such company.

3.12. Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and
the plural shall include the singular.

3.13. Limitation of Implied Rights.

(a) Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Subsidiary whatsoever,
including, without limitation, any specific funds, assets, or other
property which the Company or any Subsidiary, in its sole discretion,
may set aside in anticipation of a liability under the Plan. A
Participant shall have only a contractual right to the Stock or
amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any
Subsidiary shall be sufficient to pay any benefits to any person.

(b) The Plan does not constitute a contract of employment, and selection
as a Participant will not give any participating employee the right to
be retained in the employ of the Company or any Subsidiary, nor any
right or claim to any benefit under the Plan, unless such right or
claim has specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no Award under the Plan shall confer

D-6
<PAGE>

upon the holder thereof any rights as a shareholder of the Company prior
to the date on which the individual fulfills all conditions for receipt
of such rights.

3.14. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting
on it considers pertinent and reliable, and signed, made or presented by the
proper party or parties.

SECTION 4

CHANGE IN CONTROL

Subject to the provisions of paragraph 3.2(e) (relating to the adjustment of
shares), and except as otherwise provided in the Plan or the Award Agreement
reflecting the applicable Award, upon the occurrence of a Change in Control,
outstanding Options shall become fully vested and exercisable as to all of the
stock subject to such Options unless such Options are assumed by the surviving
corporation or its parent or the surviving corporation or its parent
substitutes Options with substantially the same terms for such Options. The
Committee shall have the right to cancel Options in the event of a Change in
Control, provided that in exchange for such cancellation the Participant shall
receive a cash payment equal to the Change in Control consideration less the
exercise price of the Option.

SECTION 5

COMMITTEE

5.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee")
which shall be selected by the Board. The Committee shall consist exclusively
of two or more directors of the Company. The composition of the Committee
shall meet the following:

(a) Such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify
for exemption under Rule 16b-3 (or its successor) under the Exchange
Act; and

(b) Such requirements as the Internal Revenue Service may establish for
outside directors acting under plans intended to qualify for exemption
under Section 162(m)(4)(C) of the Code.

5.2. Powers of Committee. The Committee's administration of the Plan shall
be subject to the following:

(a) Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible Individuals
those persons who shall receive Awards, to determine the time or times
of receipt, to determine the types of Awards and the number of shares
covered by the Awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such Awards, and
(subject to the restrictions imposed by Section 6) to cancel or
suspend Awards.

(b) The Committee will have the authority and discretion to interpret the
Plan, to establish, amend, and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any
Award Agreement made pursuant to the Plan, and to make all other
determinations that may be necessary or advisable for the
administration of the Plan.

(c) Any interpretation of the Plan by the Committee and any decision made
by it under the Plan is final and binding on all persons.

(d) In controlling and managing the operation and administration of the
Plan, the Committee shall take action in a manner that conforms to the
articles and by-laws of the Company, and applicable state corporate
law.

5.3. Delegation by Committee. Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may allocate
all or any portion of its responsibilities and powers to any one or more of
its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.

D-7
<PAGE>

5.4. Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines
may be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee's or Participant's employment, termination of
employment, leave of absence, reemployment and compensation shall be
conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to
carry out the terms of the Plan.

SECTION 6

AMENDMENT AND TERMINATION

The Board may, at any time, amend or terminate the Plan, provided that no
amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments made pursuant to
subsection 3.2(e) shall not be subject to the foregoing limitations of this
Section 6. An amendment shall be subject to approval by the Company's
shareholders only to the extent required by applicable laws, regulations or
rules.

SECTION 7

DEFINED TERMS

In addition to the other definitions contained herein, the following
definitions shall apply:

(a) Award. The term "Award" shall mean any award or benefit granted under
the Plan.

(b) Board. The term "Board" shall mean the Board of Directors of the
Company.

1. an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") of 50% or more of
either:

A. the then outstanding Stock or

B. the combined voting power of the Company's outstanding voting
securities immediately after the merger or acquisition entitled
to vote generally in the election of directors; provided,
however, that the following acquisition shall not constitute a
Change of Control:

i. any acquisition directly from the Company;

ii. any acquisition by the Company or a Subsidiary;

iii. any acquisition by the trustee or other fiduciary of any
employee benefit plan or trust sponsored by the Company or
a Subsidiary; or

iv. any acquisition by any corporation with respect to which,
following such acquisition, more than 50% of the Stock or
combined voting power of Stock and other voting securities
of the Company is beneficially owned by substantially all
of the individuals and entities who were beneficial owners
of Stock and other voting securities of the Company
immediately prior to the acquisition in substantially
similar proportions immediately before and after such
acquisition; or

2. individuals who, as of the Effective Date of this Plan, constitute
the Board (the "Incumbent Board"), cease to constitute at least a
majority of the Board. Individuals nominated by the Incumbent Board
and subsequently elected shall be deemed for this purpose to be
members of the Incumbent Board; or

D-8
<PAGE>

3. approval by the shareholders of the Company of a reorganization,
merger, consolidation, liquidation, dissolution, sale or statutory
exchange of Stock which changes the beneficial ownership of Stock
and other voting securities so that after the corporate change the
immediately previous owners of 50% of Stock and other voting
securities do not own 50% of the Company's Stock and other voting
securities either legally or beneficially; or

4. the sale, transfer or other disposition of all substantially all of
the Company's assets; or

5. a merger of the Company with another entity after which the pre-
merger shareholders of the Company own less than 50% of the stock of
the surviving corporation.

A "Change in Control" shall not be deemed to occur with respect to a
Participant if the acquisition of a 50% or greater interest is by a group that
includes the Participant, nor shall it be deemed to occur if at least 50% of
the Stock and other voting securities owned before the occurrence are
beneficially owned subsequent to the occurrence by a group that includes the
Participant.

(d) Code. The term "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include
reference to any successor provision of the Code.

(e) Eligible Employee. The term "Eligible Employee" shall mean any common-
law employee of the Company or a Subsidiary. An NSO (but not an ISO)
Award may be granted to an individual who is not yet an Eligible
Employee, in connection with hiring, retention or otherwise, prior to
the date the individual first performs services for the Company or the
Subsidiaries, provided that any such Award shall not become vested
prior to the date the employee first performs such services.

(f) Eligible Individual. The term "Eligible Individual" shall include
Eligible Employees, members of the Company's Board and outside
consultants or advisors to the Company who provide bona fide services
to the Company or a Subsidiary as Independent Contractors.

(g) Fair Market Value. For purposes of determining the "Fair Market Value"
of a share of Stock as of any date, the following rules shall apply:

(i) If at the time an Option is granted, the Class B Common Stock is
publicly traded on the New York Stock Exchange, the fair market
value of a share of Stock shall be equal to the sales price for a
share of Class B Common Stock as quoted in the New York Stock
Exchange at close of business on such date.

(ii) If sale prices are not available or if the principal market for
the Stock is not a national securities exchange and the Stock is
not quoted on the NASDAQ stock market, the average between the
highest bid, and lowest asked prices for the Stock on such day as
reported on the NASDAQ OTC Bulletin Board Service or by the
National Quotation Bureau, Incorporated or a comparable service.

(iii) If the day is not a business day, and as a result, paragraphs
(i) and (ii) next above are inapplicable, the Fair Market Value
of the Stock shall be determined as of the last preceding
business day. If paragraphs (i) and (ii) next above are
otherwise inapplicable, then the Fair Market Value of the Stock
shall be determined in good faith by an independent third party
expert selected by the Committee.

(h) Subsidiaries. The term "Subsidiary" means any company during any
period in which it is a "subsidiary corporation" (as that term is
defined in Code section 424(f)) with respect to the Company.

(i) Stock. The term "Stock" shall mean shares of Class B common stock of
the Company.

D-9
<PAGE>

- --------------------------------------------------------------------------------
1. To approve the issuance of 65,070,006 shares of PPR Class B Common Stock in
connection with the proposed acquisition of Delta Beverage Group, Inc. and
Dakota Beverage Company, Inc. pursuant to exchange agreements, dated June
28, 1999.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

2. To approve an amendment to PPR's Certificate of Incorporation to increase
the number of authorized shares of PPR capital stock to 150,000,000 from
40,000,000 and to increase the number of authorized shares of PPR Class B
Common Stock to 145,000,000 from 35,000,000.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. To approve an amendment to PPR's Certificate of Incorporation to change
PPR's name to PepsiAmericas, Inc.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. To approve PPR's 1999 Stock Option Plan.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

Change of Address and/
or Comments Mark Here [ ]

Please sign exactly as name appears on this proxy. When shares are held by joint
tenants, both should sign. If signing as attorney, executor, administrator,
trustee or guardian, please give full title as such and, if not previously
furnished, a certificate or other evidence of appointment should be furnished.
If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by an
authorized person.

Dated: ________________________

_______________________________

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.

Votes must be indicated (x) in Black or Blue ink. [X]

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

- --------------------------------------------------------------------------------
PEPSI-COLA PUERTO RICO BOTTLING COMPANY
Carretera 865, Km. 0.4, Barrio Candelaria Arenas, Toa Baja, Puerto Rico 00949

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PEPSI-COLA PUERTO RICO BOTTLING COMPANY

The undersigned hereby appoints Robert C. Pohlad and John F. Bierbaum as
proxies (each with the power to act alone and with the power of substitution and
revocation) to represent the undersigned and to vote all shares of PPR Class A
Common Stock and all shares of PPR Class B Common Stock entitled to be voted by
the undersigned as of September 7, 1999 as directed below and, in their
discretion, on all other matters which may properly come before the Special
Meeting of Shareholders (the "Special Meeting") to be held at the Marquette
Hotel, 710 Marquette Avenue, Minneapolis, Minnesota, on Friday, October 1, 1999,
at 9:30 a.m. local time and at any adjournment thereof as if the undersigned
were present and voting at the Special Meeting. Whether or not you expect to
attend the Special Meeting, you are urged to execute and return this proxy,
which you may revoke at any time prior to its use.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON
THE PROXY BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 THROUGH 4. ABSTENTIONS WILL BE COUNTED TOWARDS THE
EXISTENCE OF A QUORUM.

(Continued and to be dated and signed on the reverse side.)

PEPSI-COLA PUERTO RICO BOTTLING COMPANY
P.O. BOX 11132
NEW YORK, N.Y. 10203-0132
- --------------------------------------------------------------------------------