Document:

EX-4.2

Exhibit 4.2

EXECUTION VERSION

RIGHTS AGREEMENT

dated as of May 18, 2009

between

THE PEPSI BOTTLING GROUP, INC.

and

MELLON INVESTOR SERVICES LLC,

as Rights Agent

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	SECTION 1. Certain Definitions
	 	 	1	 
	SECTION 2. Appointment of Rights Agent
	 	 	9	 
	SECTION 3. Issue of Rights and Right Certificates
	 	 	9	 
	SECTION 4. Form of Right Certificates
	 	 	12	 
	SECTION 5. Execution, Countersignature and Registration
	 	 	12	 
	SECTION 6. Transfer, Split-Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights
	 	 	13	 
	SECTION 7. Exercise of Rights; Expiration Date of Rights
	 	 	14	 
	SECTION 8. Cancelation and Destruction of Right Certificates
	 	 	16	 
	SECTION 9. Reservation and Availability of Preferred Shares
	 	 	16	 
	SECTION 10. Preferred Shares Record Date
	 	 	17	 
	SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations
	 	 	18	 
	SECTION 12. Certain Adjustments
	 	 	22	 
	SECTION 13. Certificate of Adjustment
	 	 	23	 
	SECTION 14. Additional Covenants
	 	 	23	 
	SECTION 15. Fractional Rights and Fractional Shares
	 	 	24	 
	SECTION 16. Rights of Action
	 	 	25	 
	SECTION 17. Transfer and Ownership of Rights and Right Certificates
	 	 	26	 
	SECTION 18. Right Certificate Holder Not Deemed a Stockholder
	 	 	26	 
	SECTION 19. Concerning the Rights Agent
	 	 	27	 
	SECTION 20. Merger or Consolidation or Change of Rights Agent
	 	 	27	 
	SECTION 21. Duties of Rights Agent
	 	 	28	 
	SECTION 22. Change of Rights Agent
	 	 	31	 
	SECTION 23. Issuance of Additional Rights and Right Certificates
	 	 	32	 
	SECTION 24. Redemption and Termination
	 	 	33	 
	SECTION 25. Notices
	 	 	33	 
	SECTION 26. Supplements and Amendments
	 	 	34	 
	SECTION 27. Successors
	 	 	35	 
	SECTION 28. Benefits of Rights Agreement; Determinations and
Actions by the Board, etc
	 	 	35	 
	SECTION 29. Severability
	 	 	36	 
	SECTION 30. Governing Law
	 	 	36	 
	SECTION 31. Counterparts; Effectiveness
	 	 	36	 
	SECTION 32. Descriptive Headings
	 	 	36	 
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	A Certificate of Designation
	 	 	 	 
	B Form of Right Certificate
	 	 	 	 
	C Summary of Rights
	 	 	 	 

 

 

     RIGHTS AGREEMENT dated as of May 18, 2009 (the “Rights
Agreement”), between THE PEPSI BOTTLING GROUP, INC., a Delaware
corporation (the “Company”), and MELLON INVESTOR SERVICES LLC, a
New Jersey limited liability company, as Rights Agent (the “Rights
Agent”).

          Reference is made to the Rights Agreement, dated as of May 4, 2009 (the “Existing Rights
Agreement”), between the Company and the Rights Agent. Concurrently herewith, the Company and
the Rights Agent have duly executed and delivered an amendment to the Existing Rights Agreement
terminating such Existing Rights Agreement effective as of the Close of Business (as hereinafter
defined) on the date hereof.

          The Board of Directors of the Company (the “Board”) has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of (i) Common Stock, par value $0.01
per share, of the Company (the “Common Stock”) and (ii) Class B Common Stock, par value
$0.01 per share, of the Company (the “Class B Common Stock”), in each case outstanding at
the Close of Business (as hereinafter defined) on May 28, 2009 (the “Record Date”), and has
authorized the issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of this Rights Agreement) with respect to each share of Common Stock and Class B Common
Stock that shall become outstanding (whether originally issued or delivered from the Company’s
treasury) between the Record Date and the earliest of the Distribution Date, the Redemption Date or
the Expiration Date (as such terms are hereinafter defined); provided, however,
that Rights may be issued with respect to shares of Common Stock and Class B Common Stock that
shall become outstanding after the Distribution Date (whether originally issued or delivered from
the Company’s treasury) and prior to the earlier of the Redemption Date or the Expiration Date only
in accordance with the provisions of Section 23. Each Right shall initially represent the right to
purchase one one-thousandth (1/1,000th) of a share of Series A Preferred Stock, par value $0.01 per
share, of the Company (the “Preferred Shares”), having the powers, rights and preferences
set forth in the Certificate of Designation attached hereto as Exhibit A.

          Accordingly, in consideration of the premises and the mutual agreements herein set forth, the
parties hereby agree as follows:

          SECTION 1. Certain Definitions. For purposes of this Rights Agreement, the following
terms have the meanings indicated:

          “Acquiring Person” shall mean (1) any Person (other than PepsiCo, Inc. at any time
prior to the Major Pepsi Reduction Date) who or which, alone or together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of more than 15% of the Common Shares then
outstanding, but not including (a) at any time prior to the Major Pepsi Reduction Date, PepsiCo,
Inc., (b) the Company, any Subsidiary of the Company, any employee benefit or compensation plan of
the Company or of any of its Subsidiaries or any Person organized, appointed or established by the
Company and

 

 

 2

holding Common Shares for or pursuant to the terms of any such employee benefit or
compensation plan or (c) any such Person who has become and is the Beneficial Owner of more than
15% of the Common Shares at the time outstanding solely as the result of a change in the aggregate
number of Common Shares outstanding since the last date on which such Person acquired Beneficial
Ownership of any Common Shares, and (2) PepsiCo, Inc., if at any time after the date of this Rights
Agreement and prior to the Major Pepsi Reduction Date, PepsiCo, Inc. or any of its Affiliates
acquires Beneficial Ownership of any Common Shares , whether or not such acquisition results in an
increase in the percentage of Beneficial Ownership of Common Shares by PepsiCo, Inc., together with
its Affiliates, relative to the percentage of Beneficial Ownership of Common Shares by PepsiCo,
Inc., together with its Affiliates, as of the date of this Rights Agreement; provided,
however, that the term “Acquiring Person” shall not include any Person who or which, alone
or together with all Affiliates and Associates of such Person, would have become an “Acquiring
Person” pursuant to clause (1) or (2) solely as the result of the acquisition by such Person or one
or more of its Affiliates or Associates of Beneficial Ownership of additional Common Shares if the
Board determines that such acquisition was made in good faith without the knowledge by such Person
or one or more of its Affiliates or Associates that such Person would thereby become an Acquiring
Person, which determination of the Board shall be conclusive and binding on such Person, the Rights
Agent, the holders of the Rights and all other Persons.

Notwithstanding the proviso to the prior sentence, if any Person that is not an Acquiring Person
due to such proviso does not (x) in the case of a Person who or which otherwise would have become
an Acquiring Person pursuant to clause (1), reduce its percentage of Beneficial Ownership of Common
Shares to 15% or less or (y) in the case of PepsiCo, Inc. prior to the Major Pepsi Reduction Date,
divest itself (or cause any such Affiliates to divest itself) of such additional Common Shares, in
each case by the Close of Business on the tenth calendar day after notice from the Company (the
date of notice being the first day) that such Person’s Beneficial Ownership of Common Shares would
make it an Acquiring Person, such Person shall, at the end of such ten calendar day period, become
an Acquiring Person (and such proviso shall no longer apply to such Person).

          “Affiliate” and “Associate”, when used with reference to any Person, shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Rights Agreement.

          A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to
“beneficially own”, and shall be deemed to have “Beneficial Ownership” of, any
securities:

     (a) which such Person or any of such Person’s Affiliates or Associates is deemed to
“beneficially own” within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Rights Agreement;

 

3

     (b) which such Person or any of such Person’s Affiliates or Associates has, directly
or indirectly: (i) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or understanding
(written or oral), or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed under this clause (i) to be the
Beneficial Owner of, or to beneficially own, or to have Beneficial Ownership of, any
securities tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange thereunder or cease to be subject to withdrawal by the
tendering security holder; or (ii) the right to vote or dispose of, including pursuant to
any agreement, arrangement or understanding (written or oral); provided,
however, that a Person shall not be deemed under this clause (ii) to be the
Beneficial Owner of, or to beneficially own, or to have Beneficial Ownership of, any
security if (A) the agreement, arrangement or understanding (written or oral) to vote such
security arises solely from a revocable proxy or consent given to such Person in response
to a public proxy or consent solicitation made generally to all holders of Common Shares of
the Company pursuant to, and in accordance with, the applicable rules and regulations under
the Exchange Act and (B) the beneficial ownership of such security is not also then
reportable on Schedule 13D or 13G under the Exchange Act (or any comparable or successor
report);

     (c) which are beneficially owned, directly or indirectly, by any other Person (or an
Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates
or Associates) has (i) any agreement, arrangement or understanding (written or oral) for
the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to clause (b)(ii) of this definition) or disposing of any voting
securities of the Company or (ii) any agreement, arrangement or understanding (written or
oral) to cooperate in obtaining, changing or influencing the control of the Company; or

     (d) which are the subject of, or the reference securities for, or that underlie, any
Derivative Interest of such Person or any of such Person’s Affiliates or Associates, with
the number of Common Shares deemed Beneficially Owned being the notional or other number of
Common Shares specified in the documentation evidencing the Derivative Interest as being
subject to be acquired upon the exercise or settlement of the Derivative Interest or as the
basis upon which the value or settlement amount of such Derivative Interest is to be
calculated in whole or in part or, if no such number of Common Shares is specified in such
documentation, as determined by the Board in its sole discretion to be the number of Common
Shares to which the Derivative Interest relates.

Notwithstanding the foregoing, nothing contained in this definition shall cause a Person ordinarily
engaged in business as an underwriter of securities to be deemed the “Beneficial Owner” of,
or to “beneficially own”, or to have “Beneficial Ownership” of,

 

4

any securities acquired in a bona fide firm commitment underwriting pursuant to an underwriting
agreement with the Company.

          “Board” shall have the meaning set forth in the introductory paragraph of this Rights
Agreement.

          “Book Value”, when used with reference to Common Shares issued by any Person, shall
mean the amount of equity of such Person applicable to each Common Share, determined (a) in
accordance with generally accepted accounting principles in effect on the date as of which such
Book Value is to be determined, (b) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be determined, except that
no value shall be included in such assets for goodwill arising from consummation of a business
combination, and (c) after giving effect to (i) the exercise of all rights, options and warrants to
purchase such Common Shares (other than the Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or conversion price, per Common Share, which is
less than such Book Value before giving effect to such exercise or conversion (whether or not
exercisability or convertibility is conditioned upon occurrence of a future event), (ii) all
dividends and other distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such date, and (iii) any
other agreement, arrangement or understanding (written or oral), or transaction or other action
contemplated prior to the date as of which such Book Value is to be determined that would have the
effect of thereafter reducing such Book Value.

          “Business Combination” shall have the meaning set forth in Section 11(c)(i).

          “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a day on which banking institutions in the Borough of Manhattan, the City of New York, or the
State of New Jersey are authorized or obligated by law or executive order to close.

          “Certificate of Designation” shall mean the Certificate of Designation of the
Preferred Shares, a copy of which is attached hereto as Exhibit A.

          “Class B Common Stock” shall have the meaning set forth in the introductory paragraph
of this Rights Agreement.

          “Class B Common Shares” shall mean the shares of Class B Common Stock or any other
shares of capital stock of the Company into which the Class B Common Stock shall be reclassified or
changed.

          “Close of Business” on any given date shall mean 5:00 p.m., New York City time, on
such date; provided, however, that, if such date is not a Business Day, “Close
of Business” shall mean 5:00 p.m., New York City time, on the next succeeding Business Day.

 

5

          “Common Shares”, when used with reference to the Company prior to a Business
Combination, shall mean the shares of Common Stock or any other shares of capital stock of the
Company into which the Common Stock shall be reclassified or changed. “Common Shares”,
when used with reference to any Person (other than the Company prior to a Business Combination),
shall mean shares of capital stock of such Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such Person is not a corporation) of any
class or series, the terms of which do not limit (as a maximum amount and not merely in
proportional terms) the amount of dividends or income payable or distributable on such class or
series or the amount of assets distributable on such class or series upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person and do not provide that such
class or series is subject to redemption at the option of such Person, or any shares of capital
stock or units of equity interests into which the foregoing shall be reclassified or changed, and
if there shall be more than one class or series of such shares of capital stock or units of equity
interests of such Person, then “Common Shares” of such Person shall mean the class or
series of capital stock of such Person or units of equity interests in such Person having voting
power (being the power under ordinary circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors of such Person (if such Person is a corporation)
or to participate in the management and control of such Person (if such Person is not a
corporation)), or in the case of multiple classes or series having voting power, having the
greatest voting power.

          “Common Stock” shall have the meaning set forth in the introductory paragraph of this
Rights Agreement.

          “Company” shall have the meaning set forth in the heading of this Rights Agreement;
provided, however, that if there is a Business Combination, “Company” shall
have the meaning set forth in Section 11(c)(iii).

          The term “control” with respect to any Person shall mean the power to direct the
management and policies of such Person, directly or indirectly, by or through stock ownership,
agency or otherwise, or pursuant to or in connection with an agreement, arrangement or
understanding (written or oral) with one or more other Persons by or through stock ownership,
agency or otherwise; and the terms “controlling” and “controlled” shall have
meanings correlative to the foregoing.

          “Distribution Date” shall have the meaning set forth in Section 3(b).

          “Derivative Interest” shall mean any derivative securities (as defined under Rule
16a-1 under the Exchange Act) that increase in value as the value of the underlying equity
increases, including, but not limited to, a long convertible security, a long call option and a
short put option position, in each case, regardless of whether (x) such interest conveys any voting
rights in such security, (y) such interest is required to be, or is capable of being, settled
through delivery of such security or (z) transactions hedge the economic effect of such interest.

 

6

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as in effect on the
date in question, unless otherwise specifically provided.

          “Exchange Consideration” shall have the meaning set forth in Section 11(b)(i).

          “Expiration Date” shall mean the Close of Business on the first anniversary of the
date of this Rights Agreement.

          “including” shall mean including, without limitation.

          “Major Part”, when used with reference to the assets of the Company and its
Subsidiaries as of any date, shall mean assets (a) having a fair market value aggregating 50% or
more of the total fair market value of all the assets of the Company and its Subsidiaries (taken as
a whole) as of the date in question, (b) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and its Subsidiaries (taken as a
whole) as would be shown on a consolidated or combined balance sheet of the Company and its
Subsidiaries as of the date in question, prepared in accordance with generally accepted accounting
principles then in effect, or (c) accounting for 50% or more of the total amount of earnings before
interest, taxes, depreciation and amortization or of the revenues of the Company and its
Subsidiaries (taken as a whole) as would be shown on, or derived from, a consolidated or combined
statement of income or net earnings of the Company and its Subsidiaries for the period of 12 months
ending on the last day of the Company’s monthly accounting period next preceding the date in
question, prepared in accordance with generally accepted accounting principles then in effect.

          “Major Pepsi Reduction Date” shall mean the earliest date on which PepsiCo, Inc.,
together with its Affiliates, shall Beneficially Own (i) a total number of Common Shares and Class
B Common Shares not exceeding 15% of the Common Shares then outstanding (after giving effect to the
issuance of any Common Shares issuable upon conversion of the Class B Common Shares both for
purposes of calculating the Beneficial Ownership of PepsiCo, Inc. and its Affiliates and for
purposes of calculating the Common Shares then outstanding) and (ii) a total number of Common
Shares and Class B Common Shares not exceeding 15% of the total voting power of all Common Shares
and Class B Common Shares then outstanding.

          “Market Value”, when used with reference to Common Shares on any date, shall mean the
average of the daily closing prices, per share, of such Common Shares for the period which is the
shorter of (a) 30 consecutive Trading Days ending on the Trading Day immediately prior to the date
in question or (b) the number of consecutive Trading Days beginning on the Trading Day immediately
after the date of the first public announcement of the event requiring a determination of the
Market Value of Common Shares and ending on the Trading Day immediately prior to the record date of
such event. The closing price for each Trading Day shall be the closing price quoted on the
composite tape for securities listed on the New York Stock Exchange, or, if such securities are not
quoted on such composite tape or if such securities are not listed on

 

7

such exchange, on the principal United States securities exchange registered under the
Exchange Act (or any recognized foreign stock exchange) on which such securities are listed, or, if
such securities are not listed on any such exchange, the closing price (or, if no sale takes place
on such Trading Day, the average of the closing bid and asked prices on such Trading Day) as quoted
on any reputable quotations system specified by the Board, or if no such quotations are available,
the average of the closing bid and asked prices as furnished by a professional market maker making
a market in such securities selected by the Board, or if on any such Trading Day no market maker is
making a market in such securities, the closing price of such securities on such Trading Day shall
be deemed to be the fair value of such securities as determined in good faith by the Board (whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent, the holders of Rights and all other Persons); provided, however,
that if a Trading Day occurs during a period following an announcement of any action of the type
described in Section 12(a) that would require an adjustment thereunder by the issuer of the
securities the closing price of which is to be determined, then, and in each such case, the closing
price of such securities shall be appropriately adjusted to reflect the effect of such action on
the market price of such securities; and provided further, however, that for the
purpose of determining the closing price of the Preferred Shares for any Trading Day on which there
is no market maker for the Preferred Shares, the closing price on such Trading Day shall be deemed
to be the Formula Number (as defined in the Certificate of Designation) multiplied by the closing
price of the Common Shares of the Company on such Trading Day.

          “Person” shall mean an individual, firm, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other entity, and shall
include any successor (by merger or otherwise) thereof or thereto.

          “Post Transferee” shall have the meaning set forth in Section 7(e).

          “Preferred Shares” shall have the meaning set forth in the introductory paragraph of
this Rights Agreement. Any reference in this Rights Agreement to Preferred Shares shall be deemed
to include any authorized fraction of a Preferred Share, unless the context otherwise requires.

          “Principal Party” shall mean the Surviving Person in a Business Combination;
provided, however, that, (i) if such Surviving Person is a direct or indirect
Subsidiary of any other Person, “Principal Party” shall mean the Person which is the
ultimate parent of such Surviving Person, and (ii) in the event ultimate control of such Surviving
Person is shared by two or more Persons, “Principal Party” shall mean that Person that is
immediately controlled by such two or more Persons.

          “Prior Transferee” shall have the meaning set forth in Section 7(e).

          “Purchase Price” with respect to each Right shall mean $100.00, as such amount may
from time to time be adjusted as provided in this Rights Agreement, and shall be payable in lawful
money of the United States of America. All references herein to the Purchase Price shall mean the
Purchase Price as in effect at the time in question.

 

8

          “Record Date” shall have the meaning set forth in the introductory paragraph of this
Rights Agreement.

          “Redemption Date” shall have the meaning set forth in Section 24(a).

          “Redemption Price” with respect to each Right shall mean $0.01, as such amount may
from time to time be adjusted in accordance with Section 12. All references herein to the
Redemption Price shall mean the Redemption Price as in effect at the time in question.

          “Registered Common Shares” shall mean Common Shares that are, as of the date of
consummation of a Business Combination, and have continuously been for the 12 months immediately
preceding such date, registered under Section 12 of the Exchange Act, and if a Person has multiple
classes or series of Registered Common Shares outstanding, “Registered Common Shares” of
such Person shall mean the class or series of Registered Common Shares of such Person having voting
power (being the power under ordinary circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors of such Person (if such Person is a corporation)
or to participate in the management and control of such Person (if such Person is not a
corporation)), or in the case of multiple classes or series having voting power, having the
greatest voting power.

          “Right Certificate” shall mean a certificate evidencing a Right in substantially the
form attached hereto as Exhibit B.

          “Rights” shall mean the rights to purchase Preferred Shares (or other securities) as
provided in this Rights Agreement.

          “Securities Act” shall mean the Securities Act of 1933, as in effect on the date in
question, unless otherwise specifically provided.

          “Subsidiary” shall mean a Person, at least a majority of the total outstanding voting
power (being the power under ordinary circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors of such Person (if such Person is a corporation)
or to participate in the management and control of such Person (if such Person is not a
corporation)) of which is owned, directly or indirectly, by another Person or by one or more other
Subsidiaries of such other Person or by such other Person and one or more other Subsidiaries of
such other Person.

          “Surviving Person” shall mean (a) the Person which is the continuing or surviving
Person in a consolidation or merger specified in Section 11(c)(i)(A) or 11(c)(i)(B) or (b) the
Person to which the Major Part of the assets of the Company and its Subsidiaries is sold, leased,
exchanged or otherwise transferred or disposed of in a transaction specified in Section
11(c)(i)(C); provided, however, that, if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred or disposed of in
one or more related transactions specified in Section 11(c)(i)(C) to more than one Person, the
“Surviving Person” in such case shall

 

9

mean the Person that acquired assets of the Company and/or its Subsidiaries with the greatest fair
market value in such transaction or transactions.

          “Trading Day” shall mean a day on which the principal national securities exchange (or
principal recognized foreign stock exchange, as the case may be) on which any securities or Rights,
as the case may be, are listed or admitted to trading is open for the transaction of business or,
if the securities or Rights in question are not listed or admitted to trading on any national
securities exchange (or recognized foreign stock exchange, as the case may be), a Business Day.

          SECTION 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint one or more
co-Rights Agents as it may deem necessary or desirable (the term “Rights Agent” being used
herein to refer, collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more co-Rights Agents, the respective duties of the Rights
Agent and any co-Rights Agents shall be as the Company shall determine, and shall be provided in
writing to the Rights Agent and any such co-Rights Agent. Subject to Section 21(c), the Rights
Agent shall have no duty to supervise and shall not be liable for the acts or omissions of any such
co-Rights Agents.

          SECTION 3. Issue of Rights and Right Certificates. (a) One Right shall be
associated with each Common Share and Class B Common Share outstanding on the Record Date, each
additional Common Share and Class B Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date or the Expiration Date and each
additional Common Share and Class B Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or the Expiration Date as
provided in Section 23, subject to adjustment as provided in this Rights Agreement.

     (b) Until the earlier of (i) such date on which the Company learns that a Person has
become an Acquiring Person and (ii) such date, if any, as may be designated by the Board
following the commencement of, or first public disclosure of an intent to commence, a
tender or exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit or compensation plan of the Company or of any of its
Subsidiaries, or any Person organized, appointed or established by the Company and holding
Common Shares for or pursuant to the terms of any such employee benefit or compensation
plan) for outstanding Common Shares, if upon consummation of such tender or exchange offer
such Person could be the Beneficial Owner of more than 15% of the outstanding Common Shares
(the Close of Business on the earlier of such dates being the “Distribution Date”),
(x) the Rights shall, except as otherwise provided in Section 3(c), be evidenced by the
certificates for Common Shares or Class B Common Shares, as the case may be, registered in
the names of the holders thereof, or, in the case of Common Shares held in uncertificated
form, by the transaction statement or other record of ownership of such Common Shares,

 

10

and not by separate Right Certificates, and (y) the Rights, including the right to
receive Right Certificates, shall be transferable only in connection with the transfer of
the underlying Common Shares or Class B Common Shares, as the case may be. As soon as
practicable after the Distribution Date, the Company shall prepare and execute, the Rights
Agent shall countersign, and the Company will send or cause to be sent (and the Rights
Agent shall, if requested and provided with all necessary information, send) by
first-class, postage-prepaid mail, to each record holder of Common Shares and each record
holder of Class B Common Shares, in each case as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the Company or the
transfer agent or registrar for the Common Shares, one or more Right Certificates
evidencing one whole Right for each Common Share and one whole Right for each Class B
Common Share held by such record holder, subject to the provisions of Section 15 and to
adjustment as provided in this Rights Agreement. As of and after the Distribution Date,
the Rights shall be evidenced solely by such Right Certificates. The Company shall, as
promptly as practicable, notify the Rights Agent in writing upon the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall confirm same
in writing on or prior to the Business Day next following. Until such notice is received
by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the
Distribution Date has not occurred.

     (c) As soon as practicable after the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the form attached hereto
as Exhibit C (the “Summary of Rights”), by first-class, postage-prepaid mail, to
each record holder of Common Shares and each record holder of Class B Shares in each case
as of the Close of Business on the Record Date at the address of such holder shown on the
records of the Company or the transfer agent or registrar for the Common Shares. With
respect to any Common Shares and Class B Common Shares outstanding as of the Record Date,
and until the earliest of the Distribution Date, the Redemption Date or the Expiration
Date, (i) in the case of certificated shares, (A) the Rights associated with the Common
Shares or Class B Common Shares, as the case may be, represented by any certificate shall
be evidenced by such certificate for the Common Shares or Class B Common Shares, as the
case may be, with a copy of the Summary of Rights attached thereto and the registered
holders of the Common Shares and Class B Common Shares shall also be the registered holders
of the associated Rights and (B) the surrender for transfer of any such certificate, even
without a copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares or Class B Common Shares, as the
case may be, represented thereby, and (ii) in the case of Common Shares held in
uncertificated form, (A) the Rights associated with the Common Shares shall be evidenced by
the balances indicated in the book-entry account system of the transfer agent for such
Common Shares and the registered holders of the Common Shares shall also be the registered
holders of the associated Rights and (B) the transfer of any Common Shares in the
book-entry account system of the transfer

 

11

agent for such Common Shares shall also constitute the transfer of the Rights
associated with such Common Shares.

          (d) In the case of certificated Common Shares and Class B Common Shares, certificates issued
for Common Shares and Class B Common Shares after the Record Date (including upon transfer or
exchange of outstanding Common Shares and Class B Common Shares), but prior to the earliest of the
Distribution Date, the Redemption Date or the Expiration Date, shall have printed on, written on or
otherwise affixed to them a legend in substantially the following form:

     This certificate also evidences and entitles the holder hereof to certain Rights as
set forth in a Rights Agreement dated as of May 18, 2009 (as it may be amended from time to
time (the “Rights Agreement”)), between THE PEPSI BOTTLING GROUP, INC. (the “Company”) and
MELLON INVESTOR SERVICES LLC, as Rights Agent (the “Rights Agent”), the terms of which
(including restrictions on the transfer of such Rights) are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such Rights shall be
evidenced by separate certificates and shall no longer be evidenced by this certificate.
The Company shall mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.

Notwithstanding this Section 3(d), neither the omission of a legend nor the inclusion of a legend
that makes reference to a rights agreement other than the Rights Agreement shall affect the
enforceability of any part of this Rights Agreement or the rights of any holder of Rights.

          (e) In the case of Common Shares held in uncertificated form, the Company shall cause the
confirmation and account statements sent to holders of Common Shares in book-entry form (including
upon transfer or exchange of outstanding Common Shares) prior to the earliest of the Distribution
Date, the Redemption Date or the Expiration Date to bear a legend in substantially the following
form:

     Each share of Common Stock, par value $0.01 per share, of THE PEPSI BOTTLING GROUP,
INC. (the “Company”) entitles the holder thereof to certain Rights as set forth in a Rights
Agreement dated as of May 18, 2009 (as it may be amended from time to time (the “Rights
Agreement”)), between the Company and MELLON INVESTOR SERVICES LLC, as Rights Agent (the
“Rights Agent”), the terms of which (including restrictions on the transfer of such Rights)
are hereby incorporated herein by reference and a copy of which is on file at the principal
executive offices of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate

 

12

certificates and shall no longer be evidenced by the shares to which this statement
relates. The Company shall mail to the holder of shares to which this statement relates a
copy of the Rights Agreement without charge after receipt of a written request therefor.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE
NULL AND VOID AND NONTRANSFERABLE.

Notwithstanding this Section 3(e), neither the omission of a legend nor the inclusion of a legend
that makes reference to a rights agreement other than the Rights Agreement shall affect the
enforceability of any part of this Rights Agreement or the rights of any holder of Rights.

          SECTION 4. Form of Right Certificates. The Right Certificates (and the form of
election to purchase and form of assignment to be printed on the reverse side thereof) shall be in
substantially the form set forth as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent)
and as are not inconsistent with the provisions of this Rights Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the other provisions of this Rights Agreement (including Sections 7,
11 and 23), the Right Certificates, whenever issued, shall be dated as of the Distribution Date and
shall entitle the holders thereof to purchase such number of Preferred Shares as shall be set forth
therein for the Purchase Price set forth therein, subject to adjustment as provided in this Rights
Agreement.

          SECTION 5. Execution, Countersignature and Registration. (a) The Right Certificates
shall be executed on behalf of the Company by (x) the Chairman, or any Vice President, and by the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer or (y) any two
officers designated by the Board, either manually or by facsimile signature, and may have affixed
thereto the Company’s seal or a facsimile thereof. The Right Certificates shall be countersigned
by the Rights Agent either manually or, at the Company’s option, by facsimile signature, and shall
not be valid or obligatory for any purpose unless so countersigned. In the event that any officer
of the Company who shall have signed any of the Right Certificates shall cease to be such an
officer of the Company before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates may nevertheless be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such an officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person who, at the actual date of execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate,
although at the date of execution of this Rights Agreement any such person was not such an officer
of the Company.

 

13

     (b) Following the Distribution Date, the Rights Agent shall keep or cause to be kept,
at its office designated for such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced by each of the
Right Certificates, the certificate number of each of the Right Certificates and the date
of each of the Right Certificates.

          SECTION 6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights. (a) Subject to Sections
7(e) and 15, at any time after the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become null and void
pursuant to Section 7(e)) may be transferred, split-up, combined or exchanged for another Right
Certificate or Right Certificates representing, in the aggregate, the same number of Rights as the
Right Certificate or Right Certificates surrendered then represented. The Right Certificates are
transferable only on the registry books of the Rights Agent. Any registered holder desiring to
transfer, split-up, combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split-up, combined or exchanged at the office of the Rights Agent
designated for such purpose; provided, however, that neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the transfer of any
Right Certificate surrendered for transfer until the registered holder shall have properly
completed and duly signed the certification contained in the form of assignment on the reverse side
of such Right Certificate and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to Sections
7(e) and 15, countersign and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Right Certificates. If and to the extent the
Company does require payment of any such taxes or charges, the Company shall give the Rights Agent
prompt written notice thereof and the Rights Agent shall not deliver any Right Certificate unless
and until it is satisfied that all such payments have been made, and the Rights Agent shall
promptly forward any such sum collected by it to the Company or to such Persons as the Company may
specify by written notice.

     (b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a valid Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company’s request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancelation of the Right Certificate if mutilated, the
Company shall execute a new Right Certificate

 

14

of like tenor and deliver such new Right Certificate to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.

     (c) Notwithstanding any other provision hereof, the Company and the Rights Agent may
amend this Rights Agreement to provide for uncertificated Rights in addition to or in place
of Rights evidenced by Right Certificates.

          SECTION 7. Exercise of Rights; Expiration Date of Rights. (a) Subject to the other
provisions of this Rights Agreement (including Section 7(e) and Section 11), each Right shall
entitle the registered holder thereof, upon exercise thereof as provided in this Rights Agreement,
to purchase for the Purchase Price, at any time after the Distribution Date and at or prior to the
earlier of (i) the Expiration Date and (ii) the Redemption Date, one one-thousandth (1/1,000th) of
a Preferred Share, subject to adjustment as provided in this Rights Agreement.

     (b) Subject to the other provisions of this Rights Agreement (including Section
7(e)), the registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided in this Rights Agreement) in whole or in part at any
time after the Distribution Date, upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof properly completed and duly executed, to
the Rights Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one one-thousandth (1/1,000th) of a Preferred
Share (as such fraction may be adjusted as provided in this Rights Agreement) as to which
the Rights are exercised, at or prior to the earlier of (i) the Expiration Date and (ii)
the Redemption Date.

     (c) Subject to the other provisions of this Rights Agreement (including Section
7(e)), upon receipt of a Right Certificate representing exercisable Rights, with the form
of election to purchase properly completed and duly executed, accompanied by payment of the
Purchase Price for the Preferred Shares to be purchased together with an amount equal to
any applicable transfer tax, in lawful money of the United States of America, in cash or by
certified check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) either (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such requests or (B) if
the Company shall have elected to deposit the Preferred Shares with a depositary agent
under a depositary arrangement, requisition from the depositary agent depositary receipts
representing the number of one one-thousandths (1/1,000ths) of a Preferred Share (as such
fraction may be adjusted as provided in this Rights Agreement) to be purchased (in which
case certificates for the Preferred Shares to be represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company shall direct the
depositary agent to comply with all such requests, (ii) when necessary to comply

 

15

with this Rights Agreement (or otherwise when appropriate, as determined by the
Company with notice to the Rights Agent), requisition from the Company the amount of cash,
if any, to be paid in lieu of issuance of fractional shares in accordance with Section 15,
(iii) after receipt of such certificates or depositary receipts, cause the same to be
delivered to or, upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (iv) when
necessary to comply with this Rights Agreement (or otherwise when appropriate, as
determined by the Company with notice to the Rights Agent), after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Right Certificate.

     (d) In case the registered holder of any Right Certificate shall exercise fewer than
all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to such holder’s duly authorized assigns,
subject to the provisions of Section 15.

     (e) Notwithstanding anything in this Rights Agreement to the contrary, any Rights
that are at any time beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
Associate or Affiliate of such Acquiring Person) who becomes a transferee after the
Acquiring Person becomes such (a “Post Transferee”), (iii) a transferee of an
Acquiring Person (or of any Associate or Affiliate of such Acquiring Person) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or from such Affiliate or Associate) to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person (or such Affiliate or
Associate) has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the avoidance of this
Section 7(e) (a “Prior Transferee”), or (iv) any subsequent transferee receiving
transferred Rights from a Post Transferee or a Prior Transferee, either directly or through
one or more intermediate transferees, shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Rights Agreement or otherwise. The Company shall use
all reasonable efforts to ensure that the provisions of this Section 7(e) are complied
with, but shall have no liability to any holder of any Right Certificate or any other
Person as a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliate or Associate, or any transferee thereof, hereunder. The Company
shall give the Rights Agent written notice of the identity of any Acquiring Person,
Associate or Affiliate known to it, or the nominee of any of the foregoing, and the Rights
Agent may rely on such notice in carrying out its duties under this Agreement and shall be
deemed not to have any knowledge of the identity of any such Acquiring Person, Associate or
Affiliate, or

 

16

the nominee of any of the foregoing unless and until it shall have received such
notice.

     (f) Notwithstanding anything in this Rights Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of any Right Certificates upon the occurrence of any purported exercise
as set forth in this Section 7 unless such registered holder shall have (i) properly
completed and duly signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.

          SECTION 8. Cancelation and Destruction of Right Certificates. All Right Certificates
surrendered or presented for the purpose of exercise, transfer, split-up, combination or exchange
shall, and any Right Certificate representing Rights that have become null and void and
nontransferable pursuant to Section 7(e) surrendered or presented for any purpose shall, if
surrendered or presented to the Company or to any of its agents, be delivered to the Rights Agent
for cancelation or in canceled form, or, if surrendered or presented to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly
permitted by this Rights Agreement. The Company shall deliver to the Rights Agent for cancelation
and retirement, and the Rights Agent shall so cancel and retire, any Right Certificate purchased or
acquired by the Company. The Rights Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such canceled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the Company.

          SECTION 9. Reservation and Availability of Preferred Shares. (a) The Company shall
cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any
authorized and issued Preferred Shares held in its treasury, free from preemptive rights or any
right of first refusal, a number of Preferred Shares sufficient to permit the exercise in full of
all outstanding Rights.

     (b) If there are not sufficient Preferred Shares issued but not outstanding or
authorized but unissued to permit the exercise or exchange of Rights in accordance with
this Rights Agreement, the Company shall take all such action as may be necessary to
authorize additional Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to this Rights Agreement; provided, however, that if the Company
is unable to cause the authorization of additional Preferred Shares, then the Company
shall, or, if action by the Company’s stockholders is necessary to cause such
authorization, in lieu of seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or instruments in effect prior
to the Distribution Date to which it is a party, (i) upon surrender of a Right, pay cash
equal to the Purchase Price in lieu of issuing Preferred Shares and requiring payment
therefor, (ii) upon due exercise of a Right and payment of the Purchase

 

17

Price for each Preferred Share as to which such Right is exercised, issue common stock
or other equity and/or debt securities having a value equal to the value of the Preferred
Shares that otherwise would have been issuable pursuant to this Rights Agreement, which
value shall be determined by a nationally recognized investment banking firm selected by
the Board, or (iii) upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, distribute a combination of Preferred
Shares, cash and/or other equity and/or debt securities having an aggregate value equal to
the value of the Preferred Shares that otherwise would have been issuable pursuant to this
Rights Agreement, which value shall be determined by a nationally recognized investment
banking firm selected by the Board. To the extent that any legal or contractual
restrictions (pursuant to agreements or instruments in effect prior to the Distribution
Date to which it is party) prevent the Company from paying the full amount payable in
accordance with the foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made all amounts that are not then restricted on a pro
rata basis as such payments become permissible under such legal or contractual restrictions
until such payments have been paid in full.

     (c) The Company shall take all actions as may be necessary to ensure that all
Preferred Shares delivered upon exercise or exchange of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and nonassessable shares.

     (d) The Company shall pay when due and payable any and all Federal and state transfer
taxes and charges which may be payable in respect of the issuance or delivery of Right
Certificates or of any Preferred Shares or Common Shares or other securities upon the
exercise or exchange of the Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or in respect of the issuance or delivery of
certificates or depositary receipts for the Preferred Shares or Common Shares or other
securities, as the case may be, in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or exchange or to issue or
deliver any certificates or depositary receipts for Preferred Shares or Common Shares or
other securities, as the case may be, upon the exercise or exchange of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the Company’s
satisfaction that no such tax is due.

          SECTION 10. Preferred Shares Record Date. Each Person in whose name any certificate
for Preferred Shares or Common Shares or other securities is issued upon the exercise or exchange
of Rights shall for all purposes be deemed to have become the holder of record of the Preferred
Shares or Common Shares or other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date on which the Right Certificate evidencing such Rights was duly
surrendered and payment of

 

18

any Purchase Price (and any applicable transfer taxes) was made; provided,
however, that, if the date of such surrender and payment is a date upon which the transfer
books of the Company for the Preferred Shares or Common Shares or other securities, as the case may
be, are closed, such Person shall be deemed to have become the record holder of such Preferred
Shares or Common Shares or other securities, as the case may be, on, and such certificate shall be
dated, the next succeeding Business Day on which the transfer books of the Company for the
Preferred Shares or Common Shares or other securities, as the case may be, are open.

          SECTION 11. Adjustments in Rights After There Is an Acquiring Person; Exchange of Rights
for Shares; Business Combinations. (a) Subject to the other provisions of this Rights
Agreement (including Section 7(e)), upon a Person becoming an Acquiring Person, each holder of a
Right shall thereafter have a right to receive, upon exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, such number of one one-thousandths (1/1,000ths)
of a Preferred Share (as such fraction may be adjusted as provided in this Rights Agreement) as
shall equal the result obtained by multiplying the Purchase Price by a fraction, the numerator of
which is the number of one one-thousandths (1/1,000ths) of a Preferred Share (as such fraction may
be adjusted as provided in this Rights Agreement) for which such Right is then exercisable and the
denominator of which is 50% of the Market Value of the Common Shares on the date on which such
Person became an Acquiring Person.

     (b) (i) The Board may, at its option, at any time after a Person becomes an
Acquiring Person, mandatorily exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that shall have become null and void and
nontransferable pursuant to Section 7(e)) for consideration per Right consisting of either
(A) one-half of the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) or, if applicable, Section 9(b)(ii) or 9(b)(iii) or
(B) if applicable, the cash consideration specified in Section 9(b)(i) (the consideration
issuable per Right pursuant to this Section 11(b)(i) being the “Exchange
Consideration”). The Board may, at its option, issue a number of Common Shares in lieu
of each Preferred Share equal to the Formula Number (as defined in the Certificate of
Designation) if there are sufficient Common Shares issued but not outstanding or authorized
but unissued. If the Board elects to exchange all the Rights for Exchange Consideration
pursuant to this Section 11(b)(i) prior to the physical distribution of the Right
Certificates, the Company may distribute the Exchange Consideration in lieu of distributing
Right Certificates, in which case for purposes of this Rights Agreement holders of Rights
shall be deemed to have simultaneously received and surrendered for exchange Right
Certificates on the date of such distribution. Notwithstanding the foregoing, the Board
may not effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or any of its
Subsidiaries or any Person holding Common Shares for or pursuant to the terms of any such
employee benefit or compensation plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of more than 50% of the Common Shares then
outstanding.

 

19

          (ii) Any action of the Board ordering the exchange of any Rights pursuant to Section 11(b)(i)
shall be irrevocable and, immediately upon the taking of such action and without any further action
and without any notice, the right to exercise any such Right so exchanged pursuant to Section 11(a)
shall terminate and the only right thereafter of a holder of such Right shall be to receive the
Exchange Consideration in exchange for each such Right held by such holder or, if the Exchange
Consideration shall not have been paid or issued, to exercise any such Right pursuant to Section
11(c)(i). The Company shall promptly give public notice of any such exchange (with prompt written
notice thereof to the Rights Agent); provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all holders of the Rights to be exchanged at their
last addresses as they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange shall state the method by which the exchange of the Rights
for the Exchange Consideration will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than Rights which shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) held by each holder of Rights.

     (c) (i) In the event that, directly or indirectly, any transactions specified in the
following clause (A), (B) or (C) of this Section 11(c)(i) (each such transaction being a
“Business Combination”) shall be consummated:

     (A) the Company shall consolidate with, or merge with and into, any Acquiring
Person or any Affiliate or Associate of an Acquiring Person;

     (B) any Acquiring Person or any Affiliate or Associate of an Acquiring Person
shall merge with and into the Company and, in connection with such merger, all or
part of the outstanding Common Shares of the Company shall be changed into or
exchanged for capital stock or other securities of the Company or of any Acquiring
Person or Affiliate or Associate of an Acquiring Person or cash or any other
property; or

     (C) the Company shall sell, lease, exchange or otherwise transfer or dispose
of (or one or more of its Subsidiaries shall sell, lease, exchange or otherwise
transfer or dispose of), in one or more transactions, the Major Part of the assets
of the Company and its Subsidiaries to any Acquiring Person or any Affiliate or
Associate of an Acquiring Person,

then, in each such case, proper provision shall be made so that each holder of a Right, except as
provided in Section 7(e), shall thereafter have the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights Agreement, the securities specified
below (or, at such holder’s option, the securities

 

20

specified in Section 11(a) if the Company is the surviving corporation in such Business
Combination):

     (1) if the Principal Party in such Business Combination has Registered
Common Shares outstanding, each Right shall thereafter represent the right to
receive, upon the exercise thereof for the Purchase Price in accordance with
the terms of this Rights Agreement, such number of Registered Common Shares of
such Principal Party, free and clear of all liens, encumbrances or other
adverse claims, as shall have an aggregate Market Value as of the time of
exercise thereof equal to the result obtained by multiplying the Purchase Price
by two;

     (2) if the Principal Party involved in such Business Combination does not
have Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, at the election of
the holder of such Right at the time of the exercise thereof, any of:

     (i) such number of Common Shares of the Surviving Person in such
Business Combination (if the Principal Party is also the Surviving
Person in such Business Combination) as shall have an aggregate Book
Value immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by two;

     (ii) such number of Common Shares of the Principal Party in such
Business Combination (if the Principal Party is not also the Surviving
Person in such Business Combination) as shall have an aggregate Book
Value immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by two;
or

     (iii) if the Principal Party in such Business Combination is an
Affiliate of one or more Persons that has Registered Common Shares
outstanding, such number of Registered Common Shares of whichever of
such Affiliates of the Principal Party has Registered Common Shares
with the greatest aggregate Market Value on the date of consummation
of such Business Combination as shall have an aggregate Market Value
on the date of such Business Combination equal to the result obtained
by multiplying the Purchase Price by two.

          (ii) The Company shall not consummate any Business Combination unless each issuer of Common
Shares for which Rights may be exercised, as set forth in this Section 11(c), shall have sufficient
authorized Common Shares that have not been issued or reserved for issuance (and which shall, when
issued upon exercise thereof in

 

21

accordance with this Rights Agreement, be validly issued, fully paid and nonassessable and
free of preemptive rights, rights of first refusal or any other restrictions or limitations on the
transfer or ownership thereof) to permit the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:

     (A) a registration statement under the Securities Act on an appropriate form,
with respect to the Rights and the Common Shares of such issuer purchasable upon
exercise of the Rights, shall be effective under the Securities Act; and

     (B) the Company and each such issuer shall have:

     (1) executed and delivered to the Rights Agent a supplemental agreement
providing for the assumption by such issuer of the obligations set forth in
this Section 11(c) (including the obligation of such issuer to issue Common
Shares upon the exercise of Rights in accordance with the terms set forth in
Sections 11(c)(i) and 11(c)(iii)) and further providing that such issuer, at
its own expense, shall use its best efforts to:

     (i) cause a registration statement under the Securities Act on
an appropriate form, with respect to the Rights and the Common Shares
of such issuer purchasable upon exercise of the Rights, to remain
effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;

     (ii) qualify or register the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights under the blue sky
or securities laws of such jurisdictions as may be necessary or
appropriate; and

     (iii) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national securities
exchange on which the Common Shares were listed prior to the
consummation of the Business Combination or, if the Common Shares were
not listed on a national securities exchange prior to the consummation
of the Business Combination, on a national securities exchange;

     (2) furnished to the Rights Agent a written opinion of independent
counsel stating that such supplemental agreement is a valid, binding and
enforceable agreement of such issuer; and

     (3) filed with the Rights Agent a certificate of a nationally recognized
firm of independent accountants setting forth the number of Common Shares of
such issuer that may be purchased upon the

 

22

exercise of each Right after the consummation of such Business
Combination.

          (iii) After consummation of any Business Combination and subject to the provisions of Section
11(c)(ii), (A) each issuer of Common Shares for which Rights may be exercised as set forth in this
Section 11(c) shall be liable for, and shall assume, by virtue of such Business Combination, all
the obligations and duties of the Company pursuant to this Rights Agreement, (B) the term
“Company” shall thereafter be deemed to refer to such issuer, (C) each such issuer shall
take such steps in connection with such consummation as may be necessary to assure that the
provisions of this Rights Agreement (including Sections 11(a) and 11(c)) shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights, (D) the number of Common Shares of each such issuer thereafter
receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions of Sections 11 and 12 and (E)
the other provisions of this Rights Agreement (including Sections 7, 9 and 10) with respect to the
Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any such Common
Shares.

          SECTION 12. Certain Adjustments. (a) To preserve the actual or potential economic
value of the Rights, if at any time after the date of this Rights Agreement there shall be any
change in the Common Shares, the Class B Common Shares or the Preferred Shares, whether by reason
of stock dividends, stock splits, reclassifications, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other
similar changes in capitalization, any distribution or issuance of cash, assets, evidences of
indebtedness or subscription rights, options or warrants to holders of Common Shares, the Class B
Common Shares or Preferred Shares, as the case may be (other than distribution of the Rights or
regular quarterly cash dividends), or otherwise, then, in each such event the Board shall make such
appropriate adjustments in the number of Preferred Shares (or the number and kind of other
securities) issuable upon exercise of each Right, the Purchase Price and Redemption Price in effect
at such time and the number of Rights outstanding at such time (including the number of Rights or
fractional Rights associated with each Common Share or Class B Common Share, as the case may be)
such that following such adjustment such event shall not have had the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such event.

     (b) If, as a result of an adjustment made pursuant to Section 12(a), the holder of
any Right thereafter exercised shall become entitled to receive any securities other than
Preferred Shares, thereafter the number of such securities so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions of Sections 11 and 12 and the other
provisions of this Rights Agreement (including Sections 7, 9 and 10) with respect to the
Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any such
other securities.

 

23

     (c) All Rights originally issued by the Company subsequent to any adjustment made to
the amount of Preferred Shares or other securities relating to a Right shall evidence the
right to purchase, for the Purchase Price, the adjusted number and kind of securities
purchasable from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided in this Rights Agreement.

     (d) Irrespective of any adjustment or change in the Purchase Price or the number of
Preferred Shares or number or kind of other securities issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to express
the terms that were expressed in the initial Right Certificates issued hereunder.

     (e) In any case in which action taken pursuant to Section 12(a) requires that an
adjustment be made effective as of a record date for a specified event, the Company may
elect to defer (with prompt written notice thereof to the Rights Agent) until the
occurrence of such event the issuing to the holder of any Right exercised after such record
date the Preferred Shares and/or other securities, if any, issuable upon such exercise over
and above the Preferred Shares and/or other securities, if any, issuable before giving
effect to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional securities upon the occurrence of the event requiring such
adjustment.

          SECTION 13. Certificate of Adjustment. Whenever an adjustment is made or any event
occurs affecting the Rights or their exercisability (including an event which causes the Rights to
become null and void) as provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment or describing such event and a brief, reasonably detailed
statement of the facts, computations and methodology accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Shares, a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right Certificate (or, if
prior to the Distribution Date, to each holder of Common Shares and each holder of Class B Common
Shares) in accordance with Section 25, provided that the failure to prepare, file or mail such
certificate or summary shall not affect the validity of such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment or statement therein
contained and, subject to Section 21(c) shall have no duty or liability with respect to, and shall
not be deemed to have knowledge of, any adjustment or any such event unless it shall have received
such a certificate.

          SECTION 14. Additional Covenants. (a) Notwithstanding any other provision of this
Rights Agreement, no adjustment to the number of Preferred Shares (or fractions of a share) or
other securities for which a Right is exercisable or the number of Rights outstanding or associated
with each Common Share and Class B Common Share or any similar or other adjustment shall be made or
be effective if such adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have

 

24

had absent such adjustment, including the benefits under Sections 11 and 12, unless the terms
of this Rights Agreement are amended so as to preserve such benefits.

     (b) The Company covenants and agrees that, after the Distribution Date, except as
permitted by Section 26, it shall not take (or permit any Subsidiary of the Company to
take) any action if at the time such action is taken it is intended or reasonably
foreseeable that such action will reduce or otherwise limit the benefits the holders of
Rights would have had absent such action, including the benefits under Sections 11 and 12.
Any action taken by the Company during any period after any Person becomes an Acquiring
Person but prior to the Distribution Date shall be null and void unless such action could
be taken under this Section 14(b) from and after the Distribution Date. The Company shall
not consummate any Business Combination if any issuer of Common Shares for which Rights may
be exercised after such Business Combination in accordance with Section 11(c) shall have
taken any action that reduces or otherwise limits the benefits the holders of Rights would
have had absent such action, including the benefits under Sections 11 and 12.

          SECTION 15. Fractional Rights and Fractional Shares. (a) The Company may, but shall
not be required to, issue fractions of Rights or distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, the Company may pay to the registered
holders of the Right Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market value of a whole Right.
For purposes of this Section 15(a), the current market value of a whole Right shall be the closing
price of the Rights (as determined pursuant to the second sentence of the definition of Market
Value contained in Section 1) for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.

     (b) The Company may, but shall not be required to, issue fractions of Preferred
Shares upon exercise of the Rights or distribute certificates that evidence fractional
Preferred Shares. In lieu of fractional Preferred Shares, the Company may elect to (i)
utilize a depository arrangement as provided by the terms of the Preferred Shares or (ii)
in the case of a fraction of a Preferred Share (other than one one-thousandths (1/1,000ths)
of a Preferred Share (as such fraction may adjusted as provided in this Rights Agreement)
or any integral multiple thereof), pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share, if any are outstanding and
publicly traded (or the same fraction of the current market value of one Common Share times
the Formula Number (as defined in the Certificate of Designation) if the Preferred Shares
are not outstanding and publicly traded). For purposes of this Section 15(b), the current
market value of a Preferred Share (or Common Share) shall be the closing price of a
Preferred Share (or Common Share) (as determined pursuant to the second sentence of the
definition of Market Value contained in Section 1) for the Trading Day immediately prior to
the date of such exercise. If, as a result of an adjustment made pursuant to Section
12(a),

 

25

the holder of any Right thereafter exercised shall become entitled to receive any
securities other than Preferred Shares, the provisions of this Section 15(b) shall apply,
as nearly as reasonably practicable, on like terms to such other securities.

     (c) The Company may, but shall not be required to, issue fractions of Common Shares
upon exchange of Rights pursuant to Section 11(b), or to distribute certificates that
evidence fractional Common Shares. In lieu of such fractional Common Shares, the Company
may pay to the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to the same
fraction of the current Market Value of one Common Share as of the date on which a Person
became an Acquiring Person.

     (d) Each holder of Rights by the acceptance of such Rights expressly waives such
holder’s right to receive any fractional Rights or any fractional shares upon exercise of a
Right except as provided in this Section 15.

     (e) Whenever a payment for fractional Rights or fractional shares is to be made by
the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a
certificate setting forth in reasonable detail the facts related to such payments and the
prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make such payments. The
Rights Agent shall be fully protected in relying upon such a certificate and shall have no
duty with respect to, and shall not be deemed to have knowledge of any payment for
fractional Rights or fractional shares under any Section of this Agreement relating to the
payment of fractional Rights or fractional shares unless and until the Rights Agent shall
have received such a certificate and sufficient monies.

          SECTION 16. Rights of Action. (a) All rights of action in respect of this Rights
Agreement, excepting the rights of action given to the Rights Agent under Sections 19 and 21, are
vested in the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares and Class B Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common
Shares or Class B Common Shares), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common Shares or Class B Common
Shares) may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Rights Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Rights
Agreement and shall be entitled to specific performance of the obligations of any Person under, and
injunctive relief against actual or threatened violations of the obligations of any Person subject
to, this Rights Agreement. Notwithstanding anything in this Rights Agreement to the contrary,
neither

 

26

the Company nor the Rights Agent shall have any liability to any holder of a Right or other
Person as a result of its inability to perform any of its obligations under this Rights Agreement
by reason of any preliminary or permanent injunction or other order, judgment decree or ruling
(whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental,
regulatory, self-regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however, the
Company must use reasonable efforts to have any such injunction, order, judgment, decree or ruling
lifted or otherwise overturned as soon as possible.

     (b) Any holder of Rights who prevails in an action to enforce the provisions of this
Rights Agreement shall be entitled to recover the reasonable costs and expenses, including
attorneys’ fees, incurred in such action.

          SECTION 17. Transfer and Ownership of Rights and Right Certificates. (a) Prior to
the Distribution Date, the Rights shall be transferable only in connection with the transfer of the
Common Shares and Class B Common Shares and the Right associated with each such Common Share or
Class B Common Share shall be automatically transferred upon the transfer of each such Common Share
or Class B Common Share, as the case may be.

     (b) After the Distribution Date, the Right Certificates shall be transferable,
subject to Section 7(e), only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates properly completed
and duly executed.

     (c) The Company and the Rights Agent may deem and treat the Person in whose name a
Right Certificate (or, prior to the Distribution Date, the associated Common Shares or
Class B Common Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated certificate for Common Shares or Class B Common Shares
made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the contrary.

          SECTION 18. Right Certificate Holder Not Deemed a Stockholder. No holder, as such,
of any Right Certificate shall be entitled to vote or receive dividends or other distributions or
be deemed, for any purpose, the holder of the Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to confer upon the holder
of any Right Certificate, as such, any of the rights of a stockholder of the Company, including any
right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders, or to receive dividends or other distributions or

 

27

subscription rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.

          SECTION 19. Concerning the Rights Agent. (a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the preparation, negotiation, delivery, amendment, administration and
execution of this Rights Agreement and the exercise and performance of its duties hereunder,
including any taxes or governmental charges imposed as a result of the action taken by it hereunder
(other than any taxes on the fees payable to it). The provisions of this Section 19 and Section 21
below shall survive the termination of this Agreement, the exercise or expiration of the Rights and
the resignation, replacement or removal of the Rights Agent.

     (b) The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its acceptance
and administration of this Rights Agreement and the exercise and performance of its duties
hereunder (other than matters arising out of or resulting from a conflict of interest of
the Rights Agent or other business interests of the Rights Agent) in reliance upon any
Right Certificate or certificate for the Common Shares, Class B Common Shares, or for other
securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or upon the written
advice or opinion of counsel as set forth in Section 21. The Rights Agent shall not be
deemed to have knowledge of any event of which it was supposed to receive notice thereof
hereunder and, subject to Section 21(c), the Rights Agent shall be fully protected and
incur no liability for failing to take action in connection therewith unless and until it
has received such notice in writing.

          SECTION 20. Merger or Consolidation or Change of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any Person resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to
the shareholder services or stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this Rights Agreement
without the execution or filing of any paper or any further act on the part of any of the parties
hereto; provided, however, that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 22. In case, at the time such successor
Rights Agent shall succeed to the agency created by this Rights Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and, in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights

 

28

Agent; and in all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Rights Agreement.

     (b) In case at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and, in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such Right Certificates
either in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in this
Rights Agreement.

          SECTION 21. Duties of Rights Agent. The Rights Agent undertakes to perform only the
duties and obligations expressly imposed by this Rights Agreement (and no implied duties) upon the
following terms and conditions, by all of which the Company and the holders of Right Certificates
(or, prior to the Distribution Date, of the Common Shares and Class B Common Shares), by their
acceptance thereof, shall be bound:

     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company or legal counsel for the Rights Agent), and the written advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights Agent and,
subject to Section 21(c), the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted by it in accordance with such written advice or
opinion.

     (b) Whenever in the performance of its duties under this Rights Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter (including the identity
of any Acquiring Person and the determination of the current per share market price of any
security) be proved or established by the Company prior to taking, suffering or omitting to
take any action hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by
a certificate signed by any one of the Chairman of the Board, any Vice Chairman of the
Board, the Chief Executive Officer, the President, a Vice President (whether preceded by
any additional title), the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full and complete authorization and protection
to the Rights Agent and, subject to Section 21(c), the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted by it in reliance upon
such certificate.

     (c) The Rights Agent shall be liable hereunder to the Company and any other Person
only for its own gross negligence, bad faith or intentional misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final, non-appealable
judgment of a court of competent jurisdiction). Anything to the contrary notwithstanding,
in no event shall the Rights Agent be liable for special, punitive, indirect, consequential
or incidental loss or damage of any kind whatsoever (including but not limited to lost
profits),

 

 29

even if the Rights Agent has been advised of the likelihood of such loss or damage.

     (d) Subject to Section 21(c), the Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been made by the
Company only.

     (e) The Rights Agent shall not be under any responsibility in respect of the validity
of this Rights Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof) and, subject to Section 21(c), shall have
no liability therefor; nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability of the Rights (including the
Rights becoming null and void pursuant to Section 7(e)) or any change or adjustment in the
terms of Rights as required under the provisions of Section 11 or 12 or responsible for the
manner, method or amount of any such change or adjustment or the ascertaining of the
existence of facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice of any such
adjustment pursuant to Section 13); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Preferred Shares
or Common Shares to be issued pursuant to this Rights Agreement or any Right Certificate or
as to whether any Preferred Shares or Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.

     (f) The Company agrees that it shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this Rights Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Board of Directors,
the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President, a Vice President (whether preceded by any additional title), the Secretary or
the Treasurer of the Company, in connection with its duties and such instructions shall be
full authorization and protection to the Rights Agent and, subject to Section 21(c), the
Rights Agent shall not be liable for or in respect of any action taken, suffered or omitted
by it in accordance with any such instructions or for any delay in acting while waiting for
such instructions. In the event of any conflict or inconsistency between or among any such
instructions, the later in time shall govern. Any application by the Rights Agent for
written instructions from the Company may, at the option of the

 

30

Rights Agent, set forth in writing any action proposed to be taken, suffered or
omitted by the Rights Agent under this Agreement and the date on and/or after which such
action shall be taken or suffered or such omission shall be effective. Subject to Section
21(c), the Rights Agent shall not be liable for any action taken or suffered by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall not be
less than five Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to an earlier
date) unless, prior to the later of (i) the expiry of such five Business Day period and
(ii) the Right’s Agent taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received either a written instructions in response
to such application specifying the action to be taken, suffered or omitted, or a written or
oral objection by the Company to such proposal.

     (h) The Rights Agent and any stockholder, affiliate, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company or its
Subsidiaries may be interested, or contract with or lend money to the Company or its
Subsidiaries or otherwise act as fully and freely as though it were not the Rights Agent
under this Rights Agreement. Nothing herein shall preclude the Rights Agent or any
stockholder, affiliate, director, officer or employee from acting in any other capacity for
the Company or for any other Person.

     (i) If, with respect to any Right Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has either not
been properly completed or indicates an affirmative response to any clause thereof, the
Rights Agent shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.

     (j) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself (through its directors, officers
and employees) or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided that reasonable care was exercised in the selection and continued
employment thereof.

     (k) The Company shall indemnify the Rights Agent for, and hold the Rights Agent
harmless against, any loss, liability, damage, claim or expense (including reasonable fees
and expenses of legal counsel) that the Rights Agent may incur resulting from any action
taken, suffered or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this Rights Agreement (other
than matters arising

 

31

out of or resulting from a conflict of interest of the Rights Agent or other business
interests of the Rights Agent); provided, however, that the Rights Agent
shall not be indemnified or held harmless with respect to any such loss, liability, damage
or expense incurred by the Rights Agent as a result of, or arising out of, its own gross
negligence, bad faith or intentional misconduct. In no case shall the Company be liable
with respect to any action, proceeding, suit or claim against the Rights Agent unless the
Rights Agent shall have notified the Company, by letter or by facsimile confirmed by
letter, of the assertion of any action, proceeding, suit or claim against the Rights Agent,
promptly after the Rights Agent shall have notice of any such assertion of an action,
proceeding, suit or claim or have been served with the summons or other first legal process
giving information as to the nature and basis of the action, proceeding, suit or claim.
The Company shall be entitled to participate at its own expense in the defense of any such
action, proceeding, suit or claim, and, if the Company so elects, the Company shall assume
the defense of any such action, proceeding, suit or claim. In the event that the Company
assumes such defense, the Company shall not thereafter be liable for the fees and expenses
of any additional counsel retained by the Rights Agent, so long as the Company shall retain
counsel satisfactory to the Rights Agent, in the exercise of its reasonable judgment, to
defend such action, proceeding, suit or claim. The Rights Agent agrees not to settle any
litigation in connection with any action, proceeding, suit or claim with respect to which
it may seek indemnification from the Company without the prior written consent of the
Company. If a final, non-appealable judgment of a court of competent jurisdiction shall be
issued in favor of the Rights Agent in respect of an action by the Rights Agent to enforce
the indemnification provisions of this Section 21(k), then the Company shall reimburse the
Rights Agent’s for its costs and expenses in enforcing such indemnification provisions.

     (l) No provision of this Agreement shall require the Rights Agent to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if it believes that repayment of such
funds or adequate indemnification against such risk or liability is not reasonably assured
to it.

          SECTION 22. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Rights Agreement upon 30 days’ notice in
writing mailed to the Company and to each transfer agent of the Common Shares, the Class B Common
Shares and the Preferred Shares known to the Rights Agent, after due inquiry, by registered or
certified mail, and to the holders of the Right Certificates (or, prior to the Distribution Date,
of the Common Shares and the Class B Common Shares ) by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares, the Class B Common Shares and the Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates (or, prior to the Distribution Date, of the Common
Shares and the Class B Common Shares) by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable

 

32

of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares and the Class B Common Shares) (who shall, with such notice, submit such
holder’s Right Certificate or, prior to the Distribution Date, the certificate representing such
holder’s Common Shares or Class B Common Shares, for inspection by the Company), then the
registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common
Shares and the Class B Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be a Person organized and doing business under the laws of the United States
or of the State of New York (or of any other state of the United States so long as such entity is
authorized to conduct a stock transfer or corporate trust business in the State of New York), in
good standing, which is authorized under such laws to exercise stock transfer or corporate trust
powers and is subject to supervision or examination by Federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus of at least
$100,000,000; provided, however, that the principal transfer agent for the Common
Shares shall in any event be qualified to be the Rights Agent. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares,
the Class B Common Shares and the Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates (or, prior to the Distribution Date, of the Common
Shares and the Class B Common Shares). Failure to give any notice provided for in this Section 22,
however, or any defect therein shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

          SECTION 23. Issuance of Additional Rights and Right Certificates. Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as may be approved by
its Board to reflect any adjustment or change made in accordance with the provisions of this Rights
Agreement. In addition, in connection with the issuance or sale of Common Shares or Class B Common
Shares following the Distribution Date and prior to the earlier of the Redemption Date and the
Expiration Date, the Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued if, and to
the extent that, the Company shall be advised by

 

33

counsel that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right Certificate would be issued, (ii) no
such Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof and (iii) no such Right Certificate shall
be issued to an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

          SECTION 24. Redemption and Termination. (a) The Board may, at its option, at any
time prior to the earlier of (i) the Distribution Date and (ii) the Expiration Date, order the
redemption of all, but not fewer than all, the then outstanding Rights at the Redemption Price (the
date of such redemption being the “Redemption Date”), and the Company, at its option, may
pay the Redemption Price either in cash or Common Shares or other securities of the Company deemed
by the Board, in the exercise of its sole discretion, to be at least equivalent in value to the
Redemption Price.

     (b) Immediately upon the action of the Board ordering the redemption of the Rights,
and without any further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall be to receive
the Redemption Price. Promptly after the action of the Board ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common Shares and
Class B Common Shares. Each such notice of redemption shall state the method by which
payment of the Redemption Price will be made. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not the holder
of Rights receives such notice. In any case, failure to give such notice by mail, or any
defect in the notice, to any particular holder of Rights shall not affect the sufficiency
of the notice to other holders of Rights. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in any manner
except as specifically set forth in this Section or in Section 11(b) or in connection with
the purchase of Common Shares or Class B Common Shares prior to the Distribution Date.

          SECTION 25. Notices. Notices or demands authorized by this Rights Agreement to be
given or made by the Rights Agent or by the holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares or Class B Common Shares) to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage-prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:

The Pepsi Bottling Group, Inc.

One Pepsi Way

Somers, New York 10589

Attention: General Counsel

 

34

Subject to the provisions of Section 22, any notice or demand authorized by this Rights Agreement
to be given or made by the Company or by the holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares or Class B Common Shares) to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage-prepaid, addressed (until
another address is filed in writing with the Company) as follows:

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Boulevard

Jersey City, New Jersey 07310

Attention: Relationship Manager

with a copy to:

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Boulevard

Jersey City, New Jersey 07310

Attention: General Counsel

Notices or demands authorized by this Rights Agreement to be given or made by the Company or the
Rights Agent to any holder of a Right Certificate (or, prior to the Distribution Date, of the
Common Shares or Class B Common Shares) shall be sufficiently given or made if sent by first-class
mail, postage-prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares and Class B Common Shares.

          SECTION 26. Supplements and Amendments. At any time prior to the time any Person
becomes an Acquiring Person, and subject to the last sentence of this Section 26, the Company may,
and the Rights Agent shall if the Company so directs, supplement or amend any provision of this
Rights Agreement in any manner which the Company may deem necessary or desirable (including the
date on which the Distribution Date or Expiration Date shall occur, the amount of the Purchase
Price, the definition of “Acquiring Person” or the time during which the Rights may be redeemed
pursuant to Section 24) without the approval of any holder of the Rights. From and after the
Distribution Date, and subject to applicable law, the Company may, and the Rights Agent shall if
the Company so directs, amend this Rights Agreement without the approval of any holders of Right
Certificates (a) to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision of this Rights Agreement or (b) to
otherwise change or supplement any other provisions in this Rights Agreement in any matter which
the Company may deem necessary or desirable and which does not adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), any such supplement or amendment to be evidenced in writing. Any supplement
or amendment adopted during any period after any Person has become an

 

35

Acquiring Person but prior to the Distribution Date shall be null and void unless such
supplement or amendment could have been adopted under the prior sentence from and after the
Distribution Date. Any supplement or amendment to this Rights Agreement duly approved by the
Company that does not affect the Rights Agent’s own rights, duties, obligations or immunities under
this Rights Agreement shall become effective immediately upon execution by the Company, whether or
not also executed by the Rights Agent. Upon delivery of a certificate from an appropriate officer
of the Company that states that the proposed supplement or amendment complies with this Section 26,
the Rights Agent shall execute such supplement or amendment. Notwithstanding anything to the
contrary contained in this Rights Agreement, the Rights Agent may, but shall not be obligated to,
enter into any supplement or amendment that affects the Rights Agent’s own rights, duties,
obligations or immunities under this Rights Agreement. In addition, notwithstanding anything to
the contrary contained in this Rights Agreement, no supplement or amendment to this Rights
Agreement shall be made which extends the date on which the Expiration Date shall occur or reduces
the Redemption Price (except as required by Section 12(a)).

          SECTION 27. Successors. All the covenants and provisions of this Rights Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

          SECTION 28. Benefits of Rights Agreement; Determinations and Actions by the Board,
etc. (a) Nothing in this Rights Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, of the Common Shares and Class B Common Shares) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, of the Common Shares and Class B Common Shares).

     (b) Except as explicitly otherwise provided in this Rights Agreement, the Board shall
have the exclusive power and authority to administer this Rights Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or as may be
necessary or advisable, in the administration of this Rights Agreement, including the right
and power to (i) interpret the provisions of this Rights Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this Rights
Agreement (including a determination to redeem or not redeem the Rights or to amend this
Rights Agreement and a determination of whether there is an Acquiring Person).

     (c) Nothing contained in this Rights Agreement shall be deemed to be in derogation of
the obligation of the Board to exercise its fiduciary duty. Without limiting the
foregoing, nothing contained herein shall be construed to suggest or imply that the Board
shall not be entitled to reject any tender offer or other acquisition proposal, or to
recommend that holders of Common Shares and Class B Common Shares reject any tender offer,
or to take any other action (including the commencement, prosecution, defense or settlement
of any litigation

 

36

and the submission of additional or alternative offers or other proposals) with
respect to any tender offer or other acquisition proposal that the Board believes is
necessary or appropriate in the exercise of such fiduciary duty.

          SECTION 29. Severability. If any term, provision, covenant or restriction of this
Rights Agreement is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this
Rights Agreement shall remain in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that if the absence of such excluded provision
shall, in the reasonable judgment of the Rights Agent, materially and adversely its rights,
immunities, duties or obligations under this Rights Agreement, the Rights Agent shall be entitled
to resign on the next Business Day.

          SECTION 30. Governing Law. This Rights Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the law of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the law of such State applicable to
contracts to be made and performed entirely within such State; provided, however,
that all provisions regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York applicable to
contracts made to be performed entirely within such State.

          SECTION 31. Counterparts; Effectiveness. This Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the same instrument.
This Rights Agreement shall be effective as of the Close of Business on the date hereof.

          SECTION 32. Descriptive Headings. Descriptive headings of the several Sections of
this Rights Agreement are inserted for convenience only and shall not control or affect the meaning
or construction of any of the provisions of this Rights Agreement.

          SECTION 33. Force Majeure. Notwithstanding anything to the contrary contained
herein, the Rights Agent shall not be liable for any delays or failures in performance resulting
from acts beyond its reasonable control including acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or loss of data
due to power failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war or civil unrest.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed
as of the day and year first above written.

	 	 	 	 	 	 
	 	THE PEPSI BOTTLING GROUP, INC.,

 	 
	 		by  	 	 
	 		 	Name:  	 	 
	 		 	Title:  	 	 
	 	
	 	MELLON INVESTOR SERVICES LLC,
 as Rights Agent

 	 
	 		by  	 	 
	 		 	Name:  	 	 
	 		 	Title:  	 	 
	 	

 

 

EXHIBIT A

CERTIFICATE OF THE VOTING POWERS,

DESIGNATIONS, PREFERENCES AND RELATIVE

PARTICIPATING, OPTIONAL AND OTHER SPECIAL

RIGHTS AND QUALIFICATIONS, LIMITATIONS

OR RESTRICTIONS OF SERIES A

PREFERRED STOCK OF

THE PEPSI BOTTLING GROUP, INC.

          Pursuant to Section 151 of the General Corporation Law of the State of Delaware, THE PEPSI
BOTTLING GROUP, INC., a corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

          That, pursuant to the authority conferred upon the Board of Directors (the “Board”) of
THE PEPSI BOTTLING GROUP, INC. (the “Company”) by Article Second of the Amended and
Restated Certificate of Incorporation of the Company, the Board on May 18, 2009, adopted the
following resolution designating a new series of preferred stock as Series A Preferred Stock:

     RESOLVED, that, pursuant to the authority vested in the Board of Directors (the
“Board”) of THE PEPSI BOTTLING GROUP, INC. (the “Company”) in accordance
with the provisions of the Amended and Restated Certificate of Incorporation of the Company
(the “Certificate”) and the provisions of Section 151(g) of the General Corporation
Law of the State of Delaware, a series of preferred stock of the Company is hereby
authorized, and the designation and number of shares thereof, and the voting powers,
preferences and relative, participating, optional and other special rights, and the
qualifications, limitations or restrictions thereof, shall be as follows (in addition to
the voting powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations or restrictions thereof, set forth in the
Certificate which are applicable to shares of Preferred Stock, par value $0.01 per share of
the Company (the “Preferred Stock”)):

          SECTION 1. Designation and Number of Shares. The shares of such series shall be
designated as “Series A Preferred Stock” (the “Series A Preferred Stock”). The number of
shares initially constituting the Series A Preferred Stock shall be 1,000,000; provided,
however, that, if more than a total of 1,000,000 shares of Series A Preferred Stock shall
be issuable upon the exercise of Rights (the “Rights”) issued pursuant to the Rights
Agreement dated as of May 18, 2009, between the Company and Mellon Investor Services LLC, a New
Jersey limited liability company, as Rights Agent (the “Rights Agreement”), the Board,
pursuant to Section 151(g) of the General Corporation Law of the State of Delaware, shall direct by
resolution or resolutions that a certificate be properly executed, acknowledged, filed and
recorded, in accordance with the provisions of Section 103 thereof, providing for the total number
of shares of Series A

 

2

Preferred Stock authorized to be issued to be increased (to the extent that the Certificate
then permits) to the largest number of whole shares (rounded up to the nearest whole number)
issuable upon exercise of such Rights.

          SECTION 2. Dividends or Distributions. (a)  Subject to the superior rights of the
holders of shares of any other series of Preferred Stock or other class of capital stock of the
Company ranking superior to the shares of Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if
declared by the Board, out of the assets of the Company legally available therefor, (1) quarterly
dividends payable in cash on the last day of each fiscal quarter in each year, or such other dates
as the Board shall approve (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or a fraction of a share of Series A Preferred Stock, in the amount of $0.10
per whole share (rounded to the nearest cent) less the amount of all cash dividends declared on the
Series A Preferred Stock pursuant to the following clause (2) since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A Preferred Stock (the total
of which shall not, in any event, be less than zero) and (2) dividends payable in cash on the
payment date for each cash dividend declared on the shares of Common Stock, par value $0.01 per
share, of the Company (the “Common Stock”) in an amount per whole share (rounded to the
nearest cent) equal to the Formula Number (as hereinafter defined) then in effect times the cash
dividends then to be paid on each share of Common Stock. In addition, if the Company shall pay any
dividend or make any distribution on the Common Stock payable in assets, securities or other forms
of noncash consideration (other than dividends or distributions solely in shares of Common Stock),
then, in each such case, the Company shall simultaneously pay or make on each outstanding whole
share of Series A Preferred Stock a dividend or distribution in like kind equal to the Formula
Number then in effect times such dividend or distribution on each share of Common Stock. As used
herein, the “Formula Number” shall be 1,000; provided, however, that, if at
any time after May 18, 2009, the Company shall (i) declare or pay any dividend on the Common Stock
payable in shares of Common Stock or make any distribution on the Common Stock in shares of Common
Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of Common Stock into a
larger number of shares of Common Stock or (iii) combine (by a reverse stock split or otherwise)
the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then in
each such event the Formula Number shall be adjusted to a number determined by multiplying the
Formula Number in effect immediately prior to such event by a fraction, the numerator of which is
the number of shares of Common Stock that are outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that are outstanding immediately prior
to such event (and rounding the result to the nearest whole number); and provided further
that, if at any time after May 18, 2009, the Company shall issue any shares of its capital stock in
a merger, reclassification, or change of the outstanding shares of Common Stock, then in each such
event the Formula Number shall be appropriately adjusted to reflect such merger, reclassification
or change so that each share of Preferred Stock continues to be

 

3

the economic equivalent of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.

          (b) The Company shall declare a cash dividend on the Series A Preferred Stock as provided in
Section 2(a) immediately prior to or at the same time it declares a cash dividend on the Common
Stock; provided, however, that, in the event no cash dividend shall have been
declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, during the period between the first issuance of any share or fraction of a share of
Series A Preferred Stock, a dividend of $0.10 per whole share on the Series A Preferred Stock shall
nevertheless accrue on such subsequent Quarterly Dividend Payment Date or the first Quarterly
Dividend Payment Date, as the case may be. The Board may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a dividend or distribution
declared thereon, which record date shall be the same as the record date for any corresponding
dividend or distribution on the Common Stock.

          (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from and after the Quarterly Dividend Payment Date next preceding the date of issue
of such shares, unless the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue and
be cumulative from and after the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from and after such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.

          (d) So long as any shares of Series A Preferred Stock are outstanding, no dividends or other
distributions shall be declared, paid or distributed, or set aside for payment or distribution, on
the Common Stock or Class B Common Stock unless, in each case, the dividend required by this
Section 2 to be declared on the Series A Preferred Stock shall have been declared and set aside.

          (e) The holders of shares of Series A Preferred Stock shall not be entitled to receive any
dividends or other distributions except as herein provided.

          SECTION 3. Voting Rights. The holders of shares of Series A Preferred Stock shall
have the following voting rights:

          (a) Each holder of Series A Preferred Stock shall be entitled to a number of votes equal to
the Formula Number then in effect, for each share of Series A Preferred Stock held of record,
multiplied by the maximum number of votes per share which any

 

4

holder of Common Stock or stockholders generally then have with respect to such matter
(assuming any holding period or other requirement to vote a greater number of shares is satisfied).

          (b) Except as otherwise herein provided or by the Certificate or applicable law, the holders
of shares of Series A Preferred Stock and the holders of shares of Common Stock and Class B Common
Stock shall vote together as one class for the election of directors of the Company and on all
other matters submitted to a vote of stockholders of the Company.

          (c) Except as provided herein or by the Certificate or applicable law, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not be required for
authorizing or taking any corporate action.

          SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends or other
dividends or distributions on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall
not

     (i) declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;

     (ii) declare or pay dividends on or make any other distributions on any shares of
stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then entitled;

     (iii) redeem or purchase or otherwise acquire for consideration shares of any stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock; provided, however, that the Company may
at any time redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Company ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or

     (iv) purchase or otherwise acquire for consideration any shares of Series A Preferred
Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by publication (as determined by the
Board) to all holders of such shares upon such terms as the Board, after consideration of
the respective annual dividend rates and other relative rights and preferences of the
respective series and classes, shall

 

5

determine in good faith will result in fair and equitable treatment among the
respective series or classes.

          (b) The Company shall not permit any subsidiary of the Company to purchase or otherwise
acquire for consideration any shares of stock of the Company unless the Company could, under
Section 4(a), purchase or otherwise acquire such shares at such time and in such manner.

          SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary, no distribution shall be made (1) to the holders of
any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to the accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, plus an amount equal
to the greater of (x) $1,000 per whole share or (y) an aggregate amount per share equal to the
Formula Number then in effect times the aggregate amount to be distributed per share to holders of
Common Stock or (2) to the holders of any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up; provided, that no holder of any Series A Preferred
Stock shall be authorized or entitled to receive upon involuntary liquidation of the Company an
amount in excess of $100 per share of Series A Preferred Stock.

          SECTION 6. Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash or any other property, then in any
such case the then outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula Number then in effect
times the aggregate amount of stock, securities, cash or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is exchanged or changed. In
the event both this Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.

          SECTION 7. No Redemption; No Sinking Fund. (a)  The shares of Series A Preferred
Stock shall not be subject to redemption by the Company or at the option of any holder of Series A
Preferred Stock; provided, however, that, subject to Section 4(a)(iv), the Company
may purchase or otherwise acquire outstanding shares of Series A Preferred Stock in the open market
or by offer to any holder or holders of shares of Series A Preferred Stock.

          (b) The shares of Series A Preferred Stock shall not be subject to or entitled to the
operation of a retirement or sinking fund.

 

6

          SECTION 8. Ranking. The Series A Preferred Stock shall rank junior to all other
series of Preferred Stock of the Company unless the Board shall specifically determine otherwise in
fixing the powers, preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions thereof.

          SECTION 9. Fractional Shares. The Series A Preferred Stock shall be issuable upon
exercise of the Rights issued pursuant to the Rights Agreement in whole shares or in any fraction
of a share that is one one-thousandth of a share (as such fraction may be adjusted as provided in
the Rights Agreement) or any integral multiple of such fraction which shall entitle the holder, in
proportion to such holder’s fractional shares, to receive dividends, exercise voting rights,
participate in distributions and to have the benefit of all other rights of holders of Series A
Preferred Stock. In lieu of fractional shares, the Company, prior to the first issuance of a share
or a fraction of a share of Series A Preferred Stock, may elect (a) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one one-thousandths of a share
(as such fraction may be adjusted as provided in the Rights Agreement) or any integral multiple
thereof or (b) to issue depository receipts evidencing such authorized fraction of a share of
Series A Preferred Stock pursuant to an appropriate agreement between the Company and a depository
selected by the Company; provided, however, that such agreement shall provide that
the holders of such depository receipts shall have all the rights, privileges and preferences to
which they are entitled as holders of the Series A Preferred Stock.

          SECTION 10. Reacquired Shares. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their cancelation become authorized but
unissued shares of Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board pursuant to the provisions of the
Certificate.

          SECTION 11. Amendment. So long as any shares of Series A Preferred Stock shall be
outstanding, (i) none of the powers, preferences and relative, participating, optional and other
special rights of the Series A Preferred Stock as herein provided shall be amended in any manner
which would alter or change the powers, preferences, rights or privileges of the holders of Series
A Preferred Stock so as to affect them adversely and (ii) no amendment, alteration or repeal of the
Certificate or of the By-laws of the Company shall be effected so as to affect adversely any of
such powers, preferences, rights or privileges, in each case without the affirmative vote of the
holders of at least 66-2/3% of the outstanding shares of Series A Preferred Stock, voting as a
separate class; provided, however, that no such amendment, alteration or repeal
approved by the holders of at least 66-2/3% of the outstanding shares of Series A Preferred Stock
shall be deemed to apply to the powers, preferences, rights or privileges of any holder of shares
of Series A Preferred Stock originally issued upon exercise of the Rights after the time of such
approval without the approval of such holder.

 

7

          
IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed in its
corporate name on this 18th day of May, 2009.

	 	 	 	 	 	 
	 	THE PEPSI BOTTLING GROUP, INC.,

 	 
	 		by  	 	 
	 		 	Name:  	 	 
	 		 	Title:  	 	 
	 	

 

 

EXHIBIT B

[Form of Right Certificate]

			
	 	 	 
	Certificate No. [R]-
	 	                     Rights

NOT EXERCISABLE AFTER MAY 18, 2010, OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.

Right Certificate

THE PEPSI BOTTLING GROUP, INC.

          This certifies that          , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement dated as of May 18, 2009 as it may be
amended from time to time (the “Rights Agreement”), between THE PEPSI BOTTLING GROUP, INC.,
a Delaware corporation (the “Company”), and MELLON INVESTOR SERVICES LLC, as Rights Agent
(the “Rights Agent”), unless the Rights evidenced hereby shall have been previously
redeemed or exchanged by the Company, to purchase from the Company at any time after the
Distribution Date (as defined in the Rights Agreement) and prior to 5:00 p.m., New York City time,
on the first anniversary of the date of the Rights Agreement (the “Expiration Date”), at
the office or offices of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one one-thousandth (1/1,000th) of a fully paid, nonassessable share of Series A Preferred
Stock, par value $0.01 per share, of the Company (the “Preferred Shares”), at a purchase
price per one one-thousandth (1/1,000th) of a share equal to $100 (the “Purchase Price”)
payable in cash, upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.

          The Purchase Price and the number and kind of shares which may be purchased upon exercise of
each Right evidenced by this Right Certificate, as set forth above, are the Purchase Price and the
number and kind of shares which may be so purchased as of May 18, 2009. As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares which may be purchased upon the
exercise of each Right evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

 

2

          If the Rights evidenced by this Right Certificate are at any time beneficially owned by an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement), such Rights shall be null and void and nontransferable and the holder of any
such Right (including any purported transferee or subsequent holder) shall not have any right to
exercise or transfer any such Right.

          This Right Certificate is subject to all the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which reference to the Rights Agreement is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and are also available from
the Company upon written request.

          This Right Certificate, with or without other Right Certificates, upon surrender at the office
of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number and kind of shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not exercised.

          Subject to the provisions of the Rights Agreement, the Rights evidenced by this Right
Certificate may be redeemed by the Company at its option at a redemption price (in cash or shares
of Common Stock, par value $0.01 per share, of the Company or other securities of the Company
deemed by the Board of Directors of the Company to be at least equivalent in value) of $0.01 per
Right (which amount shall be subject to adjustment as provided in the Rights Agreement) at any time
prior to the earlier of (i) the Distribution Date and (ii) the Expiration Date.

          The Company may, but shall not be required to, issue fractions of Preferred Shares or
distribute certificates which evidence fractions of Preferred Shares upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing fractional shares, the Company may elect to make a
cash payment as provided in the Rights Agreement for fractions of a share other than
one one-thousandth (1/1,000th) of a share (as such fraction may be adjusted as provided in the
Rights Agreement) or any integral multiple thereof or to issue certificates or utilize a depository
arrangement as provided in the terms of the Rights Agreement and the Preferred Shares.

          No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company, including, without limitation, any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any

 

3

corporate action, or to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or other distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in accordance with the provisions of the Rights Agreement.

          This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by an authorized signatory of the Rights Agent.

          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.

Dated as of:

	 	 	 	 	 
	 	THE PEPSI BOTTLING GROUP, INC.,

 	 
	 	by  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Attest:

	 	 	 	 	 
	 

Name:
	 	 	 	 
	Title:
	 	 	 	 

Date of countersignature:

Countersigned:

	 	 	 	 	 
	MELLON INVESTOR SERVICES LLC, as Rights Agent,	 	 
	 
	 	 	 	 
	by
	 	 	 	 
		 	 
Authorized Signatory	 	 

 

4

[On Reverse Side of Right Certificate]

FORM OF ELECTION TO PURCHASE

(To be executed by the registered holder if

such holder desires to exercise the Rights

represented by this Right Certificate.)

To the Rights Agent:

          The undersigned hereby irrevocably elects to exercise                      Rights represented by
this Right Certificate to purchase the Preferred Shares (or other shares) issuable upon the
exercise of such Rights and requests that certificates for such shares be issued in the name of:

Please insert social security

or other identifying number

 

(Please print name and address)

          If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a
new Right Certificate for the balance remaining of such Rights shall be registered in the name of
and delivered to:

Please insert social security

or other identifying number

 

(Please print name and address)

Dated:
                     ,

	 	 	 	 	 	 	 
	 

	 	 

Signature
	 	 	 	 

Signature Guaranteed:

Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program,
the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature
Program.

The undersigned hereby certifies that (1) the Rights evidenced by this Right Certificate are not
being exercised by or on behalf of a person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and (2) after due inquiry and
to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by
this Right Certificate from any person who is or was an Acquiring Person or an Affiliate or
Associate thereof.

 

5

Dated:                                         ,                    

	 	 	 	 	 	 	 
	 

	 	 

Signature
	 	 	 	 

Signature Guaranteed:

Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program,
the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature
Program.

 

6

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

     FOR VALUE RECEIVED                                                             hereby
sells, assigns and transfer unto                                                            

 

(Please print name and address of transferee)

      

this Right Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                                          Attorney, to transfer the within Right
Certificate on the books of the within-named Corporation, with full power of substitution.

Dated:                                         ,                    

	 	 	 	 	 
	 

Signature
	 	 	 	 

Signature Guaranteed:

Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program,
the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature
Program.

     The undersigned hereby certifies that (1) the Rights evidenced by this Right Certificate are
not being sold, assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement),
(2) this Right Certificate is not being sold, assigned or transferred to or on behalf of any such
Acquiring Person, Affiliate or Associate and (3) after inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement).

	 	 	 	 	 
	 

Signature
	 	 	 	 

 

7

NOTICE

          The signature on the foregoing Form of Election to Purchase or Form of Assignment must
correspond to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.

 

 

EXHIBIT C

RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES AND BY ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.

SUMMARY OF RIGHTS TO PURCHASE

SERIES A PREFERRED STOCK

OF THE PEPSI BOTTLING GROUP, INC.

          On May 18, 2009, the Board of Directors (the “Board”) of THE PEPSI BOTTLING GROUP,
INC., a Delaware corporation (the “Company”), declared a dividend of one right (the
“Rights”) for each outstanding share of Common Stock, par value $0.01 per share, of the
Company (the “Common Shares”) and each share of Class B Common Stock, par value $0.01 per
share of the Company (the “Class B Common Shares”). The Rights will be issued to the
holders of record of Common Shares and Class B Common Shares outstanding at May 28, 2009 (the “
Record Date”) and with respect to Common Shares and Class B Common Shares issued thereafter
until the Distribution Date (as defined below). Each Right, when it becomes exercisable as
described below, will entitle the registered holder to purchase from the Company
one one-thousandth (1/1,000th) of a share of Series A Preferred Stock, par value $0.01 per share,
of the Company (the “Preferred Shares”) at a price of $100.00 (the “Purchase
Price”). The description and terms of the Rights are set forth in a Rights Agreement dated as
of May 18, 2009 as it may be amended from time to time (the “Rights Agreement”), between
the Company and Mellon Investor Services LLC, a New Jersey limited liability company, as Rights
Agent (the “Rights Agent”).

 

2

          Until the earlier of (i) such time as the Company learns that (A) a person or group (including
any affiliate or associate of such person or group), other than PepsiCo, Inc. (so long as PepsiCo,
Inc. continues to own more than 15% of the voting and economic power of the outstanding Common
Shares and Class B Common Shares), has acquired, or obtained the right to acquire, beneficial
ownership of more than 15% of the outstanding Common Shares, or (B) that PepsiCo, Inc. or any of
its affiliates or associates has acquired, or obtained the right to acquire, beneficial ownership
of any additional Common Shares (any such person or group being called an “Acquiring
Person”) and (ii) such date, if any, as may be designated by the Board following the
commencement of, or first public disclosure of an intention to commence, a tender or exchange offer
for outstanding Common Shares which could result in such person or group becoming the beneficial
owner of more than 15% of the outstanding Common Shares, (the earlier of such dates being called
the “Distribution Date”), the Rights will be evidenced by certificates for Common Shares or
Class B Common Shares as the case may be, registered in the names of the holders thereof, or, in
the case of Common Shares held in uncertificated form, by the transaction statement or other record
of ownership of such Common Shares, and not by separate Right Certificates. With respect to any
Common Shares and Class B Common Shares outstanding as of the Record Date, until the earliest of
the Distribution Date, the Redemption Date or the Expiration Date, (i) in the case of certificated
shares, the Rights associated with the Common Shares or Class B Common Shares represented by a
certificate shall be evidenced by such certificate along with a copy of this Summary of Rights, and
the surrender for transfer of any such certificate shall also constitute the transfer of the Rights
associated with the Common

 

3

Shares or Class B Common Shares, as the case may be, represented thereby, and (ii) in the case
of Common Shares held in uncertificated form, the Rights associated with the Common Shares shall be
evidenced by the balances indicated in the book-entry account system of the transfer agent for the
Common Shares, and the transfer of any Common Shares in the book-entry account system of the
transfer agent for such Common Shares shall also constitute the transfer of the Rights associated
with such Common Shares. Therefore, until the Distribution Date, the Rights will be transferred
with and only with the underlying Common Shares or Class B Common Shares, as the case may be.

          As soon as practicable following the Distribution Date, separate certificates evidencing the
Rights (“Right Certificates”) will be mailed to holders of record of the Common Shares and
Class B Common Shares as of the close of business on the Distribution Date, and such separate Right
Certificates alone will thereafter evidence the Rights.

          The Rights are not exercisable until the Distribution Date and will expire at
5:00 p.m., New York City time, on May 18, 2010 (the “Expiration Date”), unless earlier
redeemed or exchanged by the Company as described below.

          The number of Preferred Shares or other securities issuable upon exercise of the Rights is
subject to adjustment by the Board in the event of any change in the Common Shares, Class B Common
Shares or Preferred Shares, whether by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups,
split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or
issuance of assets, evidences of indebtedness or subscription rights, options or warrants to
holders of Common Shares,

 

4

Class B Common Shares or Preferred Shares or otherwise. The Purchase Price and the number of
Preferred Shares or other securities issuable upon exercise of the Rights are subject to adjustment
from time to time in the event of the declaration of a stock dividend on the Common Shares or
Class B Common Shares payable in Common Shares or Class B Common Shares or a subdivision or
combination of the Common Shares or Class B Common Shares prior to the Distribution Date.

          The Preferred Shares are authorized to be issued in fractions which are an integral multiple
of one one-thousandth (1/1,000th) of a Preferred Share. The Company may, but is not required to,
issue fractions of shares upon the exercise of Rights, and in lieu of fractional shares, the
Company may make a cash payment based on the market price of such shares on the first trading date
prior to the date of exercise or utilize a depositary arrangement as provided by the terms of the
Preferred Shares.

          Subject to the right of the Board to redeem or exchange the Rights as described below, at such
time as there is an Acquiring Person, the holder of each Right will thereafter have the right to
receive, upon exercise thereof, for the Purchase Price, that number of
one one-thousandths (1/1,000ths) of a Preferred Share equal to the number of Common Shares which at
the time of such transaction would have a market value of twice the Purchase Price. Any Rights
that are or were beneficially owned by an Acquiring Person on or after the Distribution Date will
become null and void and will not be subject to the “flip-in” provision.

          In the event the Company is acquired in a merger or other business combination by an Acquiring
Person that has common shares publicly traded in the United States or 50% or more of the Company’s
assets or assets representing 50% or

 

5

more of the Company’s earning power are sold, leased, exchanged or otherwise transferred (in
one or more transactions) to an Acquiring Person that has common shares publicly traded in the
United States, proper provision must be made so that each Right will entitle its holder to
purchase, for the Purchase Price, that number of common shares of such entity which at the time of
the transaction would have a market value of twice the Purchase Price. In the event the Company is
acquired in a merger or other business combination by an Acquiring Person that does not have common
shares publicly traded in the United States or 50% or more of the Company’s assets or assets
representing 50% or more of the earning power of the Company are sold, leased, exchanged or
otherwise transferred (in one or more transactions) to an Acquiring Person that does not have
common shares publicly traded in the United States, proper provision must be made so that each
Right will entitle its holder to purchase, for the Purchase Price, at such holder’s option,
(i) that number of common shares of the surviving corporation in the transaction with such entity
which at the time of the transaction would have a book value of twice the Purchase Price, (ii) that
number of common shares of such entity which at the time of the transaction would have a book value
of twice the Purchase Price or (iii) if such entity has an affiliate which has common shares
publicly traded in the United States, that number of common shares of such affiliate which at the
time of the transaction would have a market value of twice the Purchase Price. The “flip-over”
provision only applies to a merger or similar business combination with an Acquiring Person.

          ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE AN ACQUIRING PERSON BECOMES
SUCH, BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF

 

6

AN ACQUIRING PERSON (OR A TRANSFEREE THEREOF) WILL BECOME NULL AND VOID AND ANY HOLDER OF ANY
SUCH RIGHT (INCLUDING ANY SUBSEQUENT HOLDER) WILL BE UNABLE TO EXERCISE ANY SUCH RIGHT.

          The Rights are redeemable by the Board at a redemption price of $0.01 per Right (the
“Redemption Price”) any time prior to the earlier of (i) the Distribution Date and (ii) the
Expiration Date (the date of such redemption being the “Redemption Date”). Immediately
upon the action of the Board electing to redeem the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.

          After there is an Acquiring Person the Board may elect to exchange each Right (other than
Rights owned by an Acquiring Person) for consideration per Right consisting of (i) one-half of the
securities that would be issuable at such time upon the exercise of one Right pursuant to the terms
of the Rights Agreement or (ii) cash in an amount equal to the Purchase Price. Notwithstanding the
foregoing, the Board is not empowered to effect such exchange at any time after any person (other
than the Company, any subsidiary of the Company, any employee benefit plan of the Company or any
such subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such
plan), together with all affiliates and associates of such person, becomes the beneficial owner of
50% or more of the Common Shares then outstanding.

          At any time prior to such time as there shall be an Acquiring Person, the Company may, without
the approval of any holder of the Rights, supplement or amend any provision of the Rights Agreement
(including the date on which the Distribution Date will occur, the amount of the Purchase Price or
the definition of “Acquiring Person”),

 

7

except that no supplement or amendment may be made that extends the Expiration Date or reduces
the Redemption Price.

          Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive dividends.

          A copy of the Rights Agreement, including the terms of the Preferred Shares, will be filed
with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
A copy of the Rights Agreement is available free of charge from the Company upon written request.
This summary description of the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is incorporated herein by reference.exv10w42

Exhibit 10.42

 

ARCADIA SERVICES, INC.

GRAYROSE, INC.

ARCADIA HEALTH SERVICES OF MICHIGAN, INC.

ARCADIA HEALTH SERVICES, INC.

ARCADIA EMPLOYEE SERVICES, INC.

AMENDED AND RESTATED CREDIT AGREEMENT

DATED
AS OF JULY 13, 2009

COMERICA BANK

 

Execution Copy

 

 

     AMENDED AND RESTATED CREDIT AGREEMENT

     THIS
AMENDED AND RESTATED LOAN AGREEMENT, made as of the 13 day of July, 2009, by and among
ARCADIA SERVICES, INC., a Michigan corporation (“Arcadia”), ARCADIA HEALTH SERVICES, INC., a
Michigan corporation (“Arcadia Health Services”), GRAYROSE, INC., a Michigan corporation
(“Grayrose”) and ARCADIA HEALTH SERVICES OF MICHIGAN, INC., a Michigan corporation (“Arcadia Health
Michigan”) and ARCADIA EMPLOYEE SERVICES, INC., a Michigan corporation (“Arcadia Employee” and
together with Arcadia, Arcadia Health Services, Arcadia Health Michigan, and Grayrose, being
collectively identified as “Companies” and individually as a “Company”) and Comerica Bank, a
Michigan banking corporation, of Detroit, Michigan (herein called “Bank”);

RECITALS:

     A. Companies and Bank are parties to that certain Credit Agreement dated May 7, 2004 (“Prior
Agreement”).

     B. Companies and Bank desire to amend and restate the Prior Agreement as set forth below.

     NOW, THEREFORE, Bank and Companies agree that the Prior Agreement is amended and restated to
read as follows:

      WITNESSETH:

1. DEFINITIONS

     For the purposes of this Agreement the following terms will have the following meanings:

     “Advance” shall mean a borrowing requested by Companies and made by Bank under Section 2 of this
Agreement, including any refunding or conversions of such borrowings pursuant to Section 3.3
hereof, and shall include a Prime-based Advance.

     “Advance Formula Agreement” shall mean the Advance Formula Agreement dated even date herewith
executed by Bank and Companies, as may be amended, restated, supplemented or replaced from time to
time.

     “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly
controlling (including but not limited to all directors and executive officers of such Person),
controlled by, or under direct or indirect common control with such Person. A Person shall be
deemed to control a corporation for the purposes of this definition if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (ii) to direct or cause the direction of

 

 

the management and policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.

     “Business Day” shall mean any day on which commercial banks are open for domestic and
international business (including dealings in foreign exchange) in Detroit.

     “Capital Expenditure” shall mean, without duplication, any payment made directly or indirectly
for the purpose of acquiring or constructing fixed assets, real property or equipment which in
accordance with GAAP would be added as a debit to the fixed asset account of the person making such
expenditure, including, without limitation, amounts paid or payable under any conditional sale or
other title retention agreement or under any lease or other periodic payment arrangement which is
of such a nature that payment obligations of the lessee or obligor thereunder would be required by
generally accepted accounting principles to be capitalized and shown as liabilities on the balance
sheet of such lessee or obligor.

     “Capital Lease” shall mean any lease of any property (whether real, personal or mixed) by a
Person as lessee which, in conformity with GAAP, is, or is required to be accounted for as a
capital lease on the balance sheet of such Person, together with any renewals of such leases (or
entry into new leases) on substantially similar terms.

     “Consolidated” or “Consolidating” shall, when used with reference to any financial information
pertaining to (or when used as a part of any defined term or statement pertaining to the financial
condition of) Arcadia and its Subsidiaries, mean the accounts of Arcadia and its Subsidiaries
determined on a consolidated or consolidating basis, as the case may be, all determined as to
principles of consolidation and, except as otherwise specifically required by the definition of
such term or by such statements, as to such accounts, in accordance with generally accepted
accounting principles applied on a consistent basis and consistent with the financial statements,
if any, as at and for the fiscal year ended March 31, 2009.

     “Debt” shall mean as of any applicable time of determination thereof, the total liabilities of
a Person at such time, as determined in accordance with GAAP.

     “Default” shall mean an event which with the giving of notice or passage of time or both would
constitute an Event of Default.

     “Environmental Laws” shall mean all federal, state and local laws including statutes,
regulations, ordinances, codes, rules, and other governmental restrictions and requirements,
relating to environmental pollution, contamination or other impairment of the environment or any
hazardous or toxic substances of any nature. These Environmental Laws shall include but not be
limited to the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean Water
Act, the Federal Resource Conservation and Recovery Act of 1976, the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, and the Federal Superfund
Amendments and Reauthorization Act of 1986.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, or any
successor act or code.

2

 

     “Event of Default” shall mean any of the Events of Default specified in Section 10 hereof.

     “GAAP” shall mean, as of any applicable date of determination, generally accepted accounting
principles consistently applied, as in effect on the date of this Agreement.

     “Guarantors” shall mean the Parent Guarantor and each other Person who/which on or after the
date hereof executes a Guaranty in favor of Bank and “Guarantor” shall mean any of them.

     “Guaranty” shall mean any Guaranty by a Guarantor of the Indebtedness in form and substance
acceptable to Bank, as amended from time to time and “Guaranties” means all of them.

     “Indebtedness” shall mean all loans, advances, indebtedness, obligations and liabilities of
Companies to Bank under this Agreement, together with all other indebtedness, obligations and
liabilities whatsoever of Companies to Bank whether or not arising under or in connection with the
Loan Documents, whether matured or unmatured, liquidated or unliquidated, direct or indirect,
absolute or contingent, joint or several, due or to become due, now existing or hereafter arising.

     “Letter of Credit” shall have the meaning set forth in Section 2.9 of this Agreement. 

     “Letter
of Credit Reserve” shall mean as of any date of determination an amount equal to the undrawn amount
of all Letters of Credit plus the unreimbursed amount of any draws under Letters of Credit honored
by Bank 

     “Loan Documents” shall mean collectively, this Agreement, the Note, the Guaranties, the
Security Agreements, the Stock Pledge, the Advance Formula Agreement, the Subordination Agreements
and any other instruments or agreements executed at any time pursuant to or in connection with any
such documents.

     “Net Income” shall mean, as of any date of determination, the net income (or loss) of Arcadia
and its Consolidated Subsidiaries for the single quarter period ending on the date of
determination,
plus, to the extent deducted in determining net income, the net
decrease in the sum of any deferred tax asset and deferred tax
valuation allowance accounts, and minus to the extent included in
determining net income, the net increase in the sum of any deferred
tax asset and deferred tax valuation allowance accounts, all

as determined in accordance with GAAP.

     “Note” shall mean the Revolving Credit Note.

     “Ordinary Course Liens” shall mean with respect to any Person:

	 	(a)	 	liens for taxes not yet due and payable or which are being contested in good faith by
appropriate proceedings diligently pursued, provided that provision for the payment of all such
taxes has been made on the books of such Person as may be required by GAAP;
	 
	 	(b)	 	mechanics’, materialmen’s, banker’s, carriers’, warehousemen’s and similar liens and
encumbrances arising in the ordinary course of business and securing obligations of such Person
that are not overdue for a period of more than 60 days

3

 

	 	 	 	or are being contested in good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings commenced for the enforcement of such
liens and encumbrances shall have been duly suspended; and (ii) such provision for the payment of
such liens and encumbrances has been made on the books of such Person as may be required by GAAP;
	 
	 	(c)	 	liens arising in connection with worker’s compensation, unemployment insurance, old age
pensions and social security benefits and similar statutory obligations which are not overdue or
are being contested in good faith by appropriate proceedings diligently pursued, provided that in
the case of any such contest (i) any proceedings commenced for the enforcement of such liens shall
have been duly suspended; and (ii) such provision for the payment of such liens has been made on
the books of such Person as may be required by GAAP;
	 
	 	(d)	 	(i) liens incurred in the ordinary course of business to secure the performance of
statutory obligations arising in connection with progress payments or advance payments due under
contracts with the United States government or any agency thereof entered into in the ordinary
course of business and (ii) liens incurred or deposits made in the ordinary course of business to
secure the performance of statutory obligations, bids, leases, fee and expense arrangements with
trustees and fiscal agents and other similar obligations (exclusive of obligations incurred in
connection with the borrowing of money, any lease-purchase arrangements or the payment of the
deferred purchase price of property), provided that full provision for the payment of all such
obligations set forth in clauses (i) and (ii) has been made on the books of such Person as may be
required by GAAP; and
	 
	 	(e)	 	minor survey exceptions or minor encumbrances, easements or reservations, or rights of
others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as
to the use of real properties, which do not materially interfere with the business of such Person.

     “Parent Guarantor” shall mean RKDA, Inc., a Michigan corporation, and its successors and
assigns.

     “Person” or “person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, association, trust, unincorporated association, joint stock company,
government, municipality, political subdivision or agency, or other entity.

     “Revolving Credit” shall mean the revolving credit facility described in Section 2 of this
Agreement.

     “Revolving Credit Commitment Amount” shall mean Fourteen Million Dollars
 ($ 14,000,000).

     “Revolving Credit Maturity Date” shall mean August 1, 2011.

4

 

     “Revolving Credit Note” shall mean the Note described in Section 2.1 hereof made by Companies
to Bank in the form annexed to this Agreement as Exhibit “C”.

     “Security Agreements” shall mean (i) the Security Agreements dated May 7, 2004 executed by
Arcadia, Arcadia Health, Arcadia Health Michigan and Grayrose in favor of Bank, (ii) the Security
Agreement dated August 30, 2005 executed by Arcadia Employee in favor of Bank, and (iii) the
Security Agreement (Deposit Account) dated July ___, 2009 executed by Arcadia, as each may be
amended, restated, supplemented or replaced from time to time 

     “Stock Pledge” shall mean the
Security Agreement (Negotiable Collateral) dated May 7, 2004 executed by Parent Guarantor under
which the Parent Guarantor granted Bank a first priority security interest in all of the issued and
outstanding capital stock of Arcadia, as may be amended, restated, supplemented or replaced from
time to time.

     “Subordinated Debt” shall mean, as of any applicable time of determination, any Debt of
Companies (or any of them) which is subordinated in priority of payment or other terms to any of
the indebtedness of Companies (or any of them) to Bank, in each case, pursuant to a Subordination
Agreement.

     “Subordination Agreement” shall mean a written agreement executed and delivered by the holder
of Subordinated Debt to, and in form and detail satisfactory to, Bank, and includes without
limitation the Subordination Agreement dated even date herewith executed by Arcadia Services, Inc
and acknowledged by Companies.

     “Subsidiary” shall mean a corporation or other entity of which more than fifty percent (50%)
of the outstanding voting stock or other equity interests is owned by a Company, either directly or
indirectly, through one or more intermediaries.

     “Tangible Effective Net Worth” shall mean, as of any applicable date of determination,
Tangible Net Worth as of such date plus an amount equal to the outstanding principal amount of the
Subordinated Debt as of such date.

     “Tangible Net Worth” shall mean as of any applicable time of determination thereof, the excess
of (i) the net book value of the assets of Companies at such time (excluding receivables from
officers, directors, employees or affiliates and excluding patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, goodwill, deferred tax
assets and all other intangible assets of
Companies at such time), after all appropriate deductions in accordance with GAAP (including,
without limitation, reserves for doubtful receivables, obsolescence, depreciation and
amortization), over (ii) the sum of the total Debt of Companies
less Companies’ deferred tax liabilities at such time, all as determined in
accordance with GAAP on a Consolidated basis.

2. THE INDEBTEDNESS: Revolving Credit; Fees

     2.1 Bank agrees to make Advances to Companies from time to time from the effective date hereof
until the Revolving Credit Maturity Date, not to exceed the lesser of the Revolving Credit
Commitment Amount, as in effect from time to time, or the amount of indebtedness permitted under
the Advance Formula Agreement in aggregate principal amount at any one time outstanding. All of the
Advances under the Revolving Credit shall be evidenced by

5

 

the Revolving Credit Note under which advances, repayments and readvances may be made, subject to
the terms and conditions of this Agreement.

     2.2 The Revolving Credit Note shall mature on the Revolving Credit Maturity Date and each
Advance made under the Revolving Credit Note shall bear interest at the rate(s) et forth in the
Revolving Credit Note. The amount and date of each Advance, it’s applicable interest rate, and the
amount and date of any repayment shall be noted on Bank’s records, which records will be conclusive
evidence thereof absent manifest error.

     Companies may request an Advance under the Revolving Credit as set forth in the Revolving
Credit Note.

     2.3 The initial Advance shall be used to repay in full the indebtedness outstanding under that
certain Revolving Credit Note dated August 30, 2005 made in the principal amount of $19,000,000 by
the Companies payable to Bank. The proceeds of all other Advances under the Revolving Credit Note
shall be used solely for working capital purposes.

     2.4 The aggregate principal amount at any one time outstanding under the Revolving Credit Note
shall never exceed the formula set forth in the Advance Formula Agreement or in any Advance Formula
Agreement delivered by Companies to Bank in substitution therefor. Companies shall immediately make
all payments necessary to comply with this provision.

     2.5 Companies agree to pay Bank a non-refundable, unused fee on the average daily balance of
the unused portion of the Revolving Credit at the rate per annum equal to one eighth of one percent
(.125%) of the Revolving Credit Commitment Amount for the average number of days elapsed using a
year of 360 days. The commitment fee shall be payable quarterly in arrears on the first Business
Day of each March, June, September and December, commencing September 1, 2009, and on the Revolving
Credit Maturity Date.

     2.6 Companies shall pay Bank a non-refundable closing fee of $14,000 on the date of execution
of this Agreement, which fee shall be deemed fully earned by Bank upon execution of this Agreement
by Companies and Bank.

     2.7 In addition to direct Advances under the Revolving Credit Note to be provided to Companies
by Bank under and pursuant to Section 2.1 of this Agreement, Bank further agrees to issue, or
commit to issue, from time to time, standby letters of credit for the account of Companies (herein
individually called a “Letter of Credit” and collectively “Letters of Credit”) in aggregate undrawn
amounts not to exceed Five Hundred Thousand Dollars ($500,000) at any one time outstanding;
provided, however that the sum of the aggregate amount of Advances outstanding under the Revolving
Credit Note plus the Letter of Credit Reserve shall not exceed the Revolving Credit Commitment
Amount at any time; and provided further that no Letter of Credit shall, by its terms, have an
expiration date which is more than twelve (12) months after issuance or which extends beyond the
Revolving Credit Maturity Date. In addition to the terms and conditions of this Agreement, the
issuance of any Letters of Credit also shall be subject to the terms and conditions of any letter
of credit applications and agreements executed and delivered by Companies unto Bank with respect
thereto. Companies shall pay to Bank annually in advance a fee equal to the 1.75% per annum of the
amount of each Letter of Credit. The sum

6

 

of the aggregate principal amount at any time outstanding under the borrowing formula set forth in
the Advance Formula Agreement. Companies shall immediately make all payments necessary to comply
with this provision.

3. CONDITIONS

     3.1 Companies agree to furnish Bank prior to the initial borrowing under this Agreement, in
form and substance to be satisfactory to Bank, with (i) certified copies of resolutions of the
Boards of Directors of Companies evidencing approval of the borrowings and transactions
contemplated hereunder; (ii) a certificate of good standing from the state of each Company’s
incorporation and from the state(s) in which each of them is required to be qualified to do
business; (iii) the other Loan Documents; (iv) a borrowing base report and (v) such other
documents, instruments and legal opinions as Bank may require. 

     3.2 As security for all Indebtedness
of Companies to Bank hereunder, Companies agree to furnish, execute and deliver to Bank, or cause
to be furnished, executed and delivered to Bank, prior to or simultaneously with the initial
borrowing hereunder, in form to be satisfactory to Bank and supported by appropriate resolution in
certified form authorizing same, the following:

	 	(a)	 	The Security Agreements;
	 
	 	(b)	 	The Subordination Agreements;
	 
	 	(c)	 	The Stock Pledge;
	 
	 	(d)	 	The Guaranties;
	 
	 	(e)	 	Financing Statements required or requested by Bank to perfect all security interests to be
conferred upon Bank under this Agreement and to accord Bank a perfected first priority security
position under the Uniform Commercial Code (subject only to the encumbrances permitted hereunder);
and
	 
	 	(f)	 	Such other documents or agreements of security and appropriate assurances of validity and
perfected first priority of lien or security interest as Bank may reasonably request at any time.

To the extent that any of the Companies has heretofore given a security interest to Bank to certain
of the foregoing and such documents and agreements comply with the requirements of this Agreement,
it is hereby agreed that such documents and agreements shall remain in full force and effect for
the purposes of this Agreement, but Bank may, if it deems it necessary or desirable, require
execution of a new agreement or agreements or amendments to such agreements.

     3.3 As a condition to the initial Advance, Companies shall have provided Bank evidence of
satisfaction of conditions precedent set forth in the commitment letter dated June 23, 2009.

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4. REPRESENTATIONS AND WARRANTIES

     Each of the Companies represents and warrants and such representations and warranties shall be
deemed to be continuing representations and warranties during the entire life of this Agreement:

     
4.1 It is a corporation duly organized and existing in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business and in good standing in
every jurisdiction in which such qualification is material to its business and operation or the
ownership or lease of its properties; execution, delivery and performance of this Agreement and
other documents and instruments required under this Agreement, and the issuance of the Note by
Companies are within its corporate powers, have been duly authorized, are not in contravention of
law or the terms of its Articles of Incorporation or Bylaws, and do not require the consent or
approval of any governmental body, agency or authority; and this Agreement and the other documents
and instruments required under this Agreement and the Note, when issued and delivered, will be
valid and binding in accordance with their terms.

     4.2 The execution, delivery and performance of this Agreement and any other documents and
instruments required under this Agreement, and the issuance of the Note by Companies are not in
contravention of the unwaived terms of any indenture, agreement or undertaking to which any Company
is a party or by which any Company is bound.

     4.3 Except as may be set forth in Schedule 4.3, no litigation or other proceeding before any
court or administrative agency is pending, or to the knowledge of its officers is threatened
against Companies or any Subsidiary of any of the Companies, the outcome of which could materially
impair any of the Companies’ or any Subsidiary’s financial condition or their ability to carry on
their businesses taken as a whole.

     4.4 There are no security interests in, or liens, mortgages, or other encumbrances on any of
Companies’ or any Subsidiary’s assets, except to Bank, or as permitted in this Agreement.

     4.5 None of the Companies nor any Subsidiary maintains or contributes to any employee pension
benefit plan subject to title IV of the “Employee Retirement Income Security Act of 1974” (herein
called “ERISA”), except the plans described in attached Schedule 4.5. There is no unfunded past
service liability of the pension plan and there is no accumulated funding deficiency within the
meaning of ERISA, or any existing material liability with respect to any pension plan owed to the
Pension Benefit Guaranty Corporation (“PBGC”) or any successor thereto, except any funding
deficiency for which an application to the PBGC for waiver is pending or for which a waiver has
been granted by the PBGC.

     4.6 The financial statements of Companies dated March 31, 2009, previously furnished Bank, are
complete and correct in all material respects and fairly present the financial condition of
Companies and their consolidated Subsidiaries as of their respective dates; since March 31, 2009,
there has been no material adverse change in the financial condition of any of the Companies or any
of the Subsidiaries; to the knowledge of its officers, none of the Companies nor any of the
Subsidiaries has any contingent obligations (including any liability for taxes) not disclosed by or
reserved against in said financial statements and at the present time

8

 

there are no material unrealized or anticipated losses from any present commitment of any of the
Companies or Subsidiaries.

     4.7 All tax returns and tax reports of Companies and each Subsidiary required by law to have
been filed have been duly filed or extensions obtained, and all taxes, assessments and other
governmental charges or levies (other than those presently payable without penalty and those
currently being contested in good faith for which adequate reserves have been established) upon
Companies or any Subsidiary (or any of its properties) which are due and payable have been paid for
which the failure to pay would materially adversely affect its business or the value of its
property or assets (taken as a whole). The charges, accruals and reserves on the books of Companies
and the Subsidiaries in respect of the Federal income tax for all periods are adequate in the
opinion of Companies.

     4.8 All of the issued and outstanding capital stock of Arcadia is owned by the Parent
Guarantor. Except as disclosed on Schedule 4.8 annexed hereto, there are no Subsidiaries of any
Company.

     4.9 Each Company and its Subsidiaries are, in the conduct of their business, in compliance in
all material respects with all federal, state or local laws, statutes, ordinances and regulations
applicable to any of them, the enforcement of which, if such Company or any Subsidiary were not in
compliance, would reasonably be expected to materially adversely affect its business or the value
of its property or assets (taken as a whole). Each Company and its Subsidiaries have all approvals,
authorizations, consents, licenses, orders and other permits of all governmental agencies and
authorities, whether federal, state or local, required to permit the operation of their business as
presently conducted, except such approvals, authorizations, consents, licenses, orders and other
permits with respect to which the failure to have would reasonably be expected to materially
adversely affect its business or the value of its property or assets (taken as a whole).

     4.10 Except as may be set forth in Schedule 4.10, none of the Companies nor any Subsidiary is
party to any litigation or administrative proceeding, nor so far as is known by it is any
litigation or administrative proceeding threatened against it or any other Company or Subsidiary,
which in either case (A) asserts or alleges that any of the Companies or any Subsidiary violated
Environmental Laws (as defined herein), (B) asserts or alleges that any of the Companies or any
Subsidiary is required to clean up, remove, or take remedial or other response action due to the
disposal, depositing, discharge, leaking or other release of any hazardous substances or materials,
or (C) asserts or alleges that any of the Companies or any Subsidiary is required to pay all or a
portion of the cost of any past, present, or future cleanup, removal or remedial or other response
action which arises out of or is related to the disposal, depositing, discharge, leaking or other
release of any hazardous substances or materials by any of the Companies or any Subsidiary.

     4.11 To the best of its knowledge, after due inquiry, except as otherwise previously disclosed
in writing by Companies to Bank, there are no conditions existing currently or likely to exist
during the term of this Agreement which would subject any of the Companies or any Subsidiary to
material damages, penalties, injunctive relief or cleanup costs under any applicable Environmental
Laws or which require or are likely to require material cleanup, removal,

9

 

remedial action or other response pursuant to applicable Environmental Laws by any of the Companies
or any Subsidiary.

     4.12 None of the Companies nor any Subsidiary is subject to any judgment, decree, order or
citation related to or arising out of applicable Environmental Laws and to the best of its
knowledge, after due inquiry, except as otherwise previously disclosed in writing to the Bank,
neither of the Companies nor any Subsidiary has been named or listed as a potentially responsible
party by any governmental body or agency in a matter arising under any applicable Environmental
Laws.

     4.13 Each of the Companies and the Subsidiaries has all material permits, licenses and
approvals required under applicable Environmental Laws.

     4.14 None of the Companies is an “Investment Company” within the meaning of the Investment
Company Act of 1940, as amended. None of the Companies is engaged principally, or as one of its
important activities, directly or indirectly, in the business of extending credit for the purpose
of purchasing or carrying margin stock, and none of the proceeds of any of the loans hereunder will
be used, directly or indirectly, for any purpose which would violate the provisions of Regulation U
or X of the Board of Governors of the Federal Reserve System. Terms for which meanings are provided
in Regulation U of the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph with such
meanings.

     4.15 Each Company has good and valid title to the property pledged, mortgaged or otherwise
encumbered or to be encumbered by it under the Loan Documents to which such Company is a party.

     4.16 Schedule 4.16 annexed hereto is a complete list of all premises where tangible personal
property of the Companies is located.

5. AFFIRMATIVE COVENANTS

     Each of the Companies covenants and agrees that it will, and it will cause each of its
Subsidiaries, so long as Bank may make any Advance under this Agreement and thereafter so long as
any Indebtedness remains outstanding under this Agreement:

     5.1 Furnish Bank:

	 	(a)	 	prompt notification of any condition or event which constitutes or with the running of
time and/or the giving of notice would constitute an Event of Default under this Agreement, and
promptly inform the Bank of any material adverse change in any of the Companies’ or any
Subsidiary’s financial condition;
	 
	 	(b)	 	as soon as available and in any event within 30 days after and as of the end of each
month, the consolidated and consolidating balance sheets and statements of profit and loss and
surplus of the Companies and their consolidated Subsidiaries, duly certified (subject to year-end
audit adjustments) by the chief financial officer of each of the Companies as having been prepared
in accordance with GAAP

10

 

	 	 	 	consistent with those applied in the preparation of the financial statements referred to in
Section 4.6;
	 
	 	(c)	 	as soon as available and in any event within 45 days after and as of the end of each
month, the balance sheet and statements of profit and loss and surplus of Arcadia Resources, Inc.
and its Consolidated Subsidiaries duly certified (subject to year-end audit adjustments) by the
chief financial officer of Arcadia Resources, Inc. as having been prepared in accordance with the
GAAP consistent with those applied by Arcadia in the preparation of the financial statements
referred to in Section 4.6;
	 
	 	(d)	 	as soon as available and in any event within 90 days after and as of the end of each
fiscal year of the Companies, consolidated and consolidating audited financial statements of
Companies and their consolidated Subsidiaries, including a balance sheet, statements of income and
retained earnings and changes in financial position for such year, prepared in accordance with GAAP
and certified by independent certified public accountants reasonably acceptable to the Bank;
	 
	 	(e)	 	as soon as available and in any event within 90 days after and as of the end of each
fiscal year of Arcadia Resources, Inc., a Nevada corporation (“Resources”), (i) Resources’ form
10-K as of the end of such fiscal year, and (ii) financial statements of Resources and its
subsidiaries, including a balance sheet, statements of income and retained earnings and changes in
financial position for such year, prepared on a consolidated and consolidating basis in accordance
with GAAP, in such detail as Bank may reasonably require, and audited by independent certified
public accountants of recognized standing selected by Resources and acceptable to Bank;
	 
	 	(f)	 	within ten (10) days after and as of the end of each month, a detailed aging of Accounts
and accounts payable, an inventory report and a borrowing base report all in form acceptable to
Bank, certified by an officer of each of the Companies;
	 
	 	(g)	 	on Friday of each week and as of Friday of the previous week, a borrowing base report in
form acceptable to Bank, certified by an officer of each of the Companies;
	 
	 	(h)	 	such information as required by the terms and conditions of the Advance Formula Agreement
and any security agreements referred to in this Agreement; and
	 
	 	(i)	 	from time to time, such further information regarding the business affairs and financial
condition of the Companies as the Bank may reasonably request.

     5.2 Pay and discharge, and cause its Subsidiaries to pay and discharge, all taxes and other
governmental charges and all contractual obligations calling for the payment of money, before the
same shall become overdue, unless and to the extent only that such payment is being contested in
good faith and, if required by Bank, bonded in a manner satisfactory to Bank.

11

 

     5.3 Maintain, and cause its Subsidiaries to maintain, insurance coverage on their physical
assets and against other business risks in such amounts and of such types as are customarily
carried by companies similar in size and nature, and in the event of acquisition of additional
property, real or personal, or of incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business judgment and present
practice would dictate; and in the case of all policies covering property mortgaged or pledged to
Bank or property in which Bank shall have a security interest of any kind whatsoever, other than
those policies protecting against casualty liabilities to strangers, all such insurance policies
shall provide that the loss payable thereunder shall be payable to Companies and Bank as their
respective interests may appear; copies of all said policies, including all endorsements thereon
and those required hereunder, to be deposited with Bank.

     5.4 Permit, and cause its Subsidiaries to permit, Bank, through its authorized attorneys,
accountants, and representatives, to examine each Company’s and its Subsidiaries’ books, accounts,
records, ledgers and assets of every kind and description at all reasonable times upon oral or
written request of Bank, including, without limitation, collateral audits of Companies at the
expense of Companies; provided, however, so long as no Default or Event of Default has occurred and
is continuing, Companies shall not be required to reimburse Bank for more than two (2) such audits
during each twelve month period thereafter.

     5.5 Promptly notify Bank of any condition or event which constitutes or with the running of
time and/or the giving of notice would constitute a default under this Agreement, and promptly
inform Bank of any material adverse change in any Company’s or any Subsidiary’s financial
condition.

     5.6 Furnish to the Bank concurrently with the delivery of each of the financial statements
required by Section 5.1(a) and (b) hereof, a statement in the form of Exhibit A annexed hereto
prepared and certified by the chief financial officer of Arcadia (or in his absence, a responsible
senior officer of Arcadia) (a) setting forth all computations necessary to show compliance by
Companies with the financial covenants contained in Sections 5.11 and 5.12 of this Agreement as of
the date of such financial statements, (b) stating that as of the date thereof, no condition or
event which constitutes an event of default or which with the running of time and/or the giving of
notice would constitute an event of default has occurred and is continuing, or if any such event or
condition has occurred and is continuing or exists, specifying in detail the nature and period of
existence thereof and any action taken with respect thereto taken or contemplated to be taken by
Companies and (c) stating that the signer has personally reviewed this Agreement and that such
certificate is based on an examination sufficient to assure that such certificate is accurate.

     5.7 Maintain in good standing, and cause each Subsidiary to maintain in good standing, all
licenses required by the State of Michigan or any agency thereof, or other governmental authority
that may be necessary or required for Companies or any Subsidiary to carry on its general business
objects and purposes.

     5.8 Furnish, and cause each Subsidiary to furnish, Bank, upon Bank’s request, in form
satisfactory to Bank with pledges, assignments, mortgages, lien instruments or other security
instruments covering any or all of each Company’s and each Subsidiary’s real or personal

12

 

property, of every nature and description, whether now owned or hereafter acquired, to the extent
that Bank may in its sole reasonable discretion require.

     5.9 Comply, and cause each Subsidiary to comply, with all requirements imposed by ERISA as
presently in effect or hereafter promulgated including, but not limited to, the minimum funding
requirements of the Pension Plans.

     5.10 Promptly notify Bank after the occurrence thereof in writing of any of the following
events:

	 	(a)	 	the termination of any Company’s or any Subsidiary’s Pension Plan pursuant to Subtitle C
of Title IV of ERISA or otherwise;
	 
	 	(b)	 	the appointment of a trustee by a United States District Court to administer the Pension
Plan;
	 
	 	(c)	 	the commencement by the Pension Benefit Guaranty Corporation, or any successor thereto of
any proceeding to terminate any Company’s or any Subsidiary’s Pension Plan;
	 
	 	(d)	 	the failure of any Company’s or any Subsidiary’s Pension Plan to satisfy the minimum
funding requirements for any plan year as established in Section 412 of the Internal Revenue Code
of 1954, as amended;
	 
	 	(e)	 	the withdrawal of any Company or any Subsidiary from a Pension Plan; or
	 
	 	(f)	 	a reportable event, within the meaning of Title IV of ERISA.

     5.11 Maintain as of the end of each fiscal quarter of Arcadia, commencing with the fiscal
quarter ending June 30, 2009, Tangible Effective Net Worth of not less than the following as of the
dates set forth below:

	 	 	 	 	 
	June 30, 2009
	 	$	2,000,000	 
	September 30, 2009
	 	$	2,000,000	 
	December 31, 2009
	 	$	2,100,000	 
	March 31, 2010
	 	$	2,200,000	 
	June 30, 2010
	 	$	2,300,000	 
	September 30, 2010
	 	$	2,400,000	 
	December 31, 2010
	 	$	2,500,000	 
	March 31, 2011
	 	$	2,600,000	 
	June 30, 2011
	 	$	2,700,000	 
	September 30, 2011 and the last day of each fiscal quarter
thereafter
	 	$	2,800,000	 

13

 

     5.12 Earn as of the end of each fiscal quarter of Companies, commencing with the fiscal
quarter ending June 30, 2009, Net Income of not less than $400,000.

     5.13 Maintain all cash collection and general disbursement accounts with Bank.

     5.14 Furnish, and cause each Person which becomes a holder of the capital stock of Arcadia
after the date hereof to furnish, Bank contemporaneously with the acquisition of such stock, a
Stock Pledge, together with delivery of the original stock certificate(s) and a stock assignment(s)
duly executed in blank, all in form satisfactory to Bank, supported by appropriate resolutions in
certified form authorizing same, as applicable. Nothing set forth in this Section shall constitute
Bank’s consent to the acquisition by any Person of any of the capital stock of Arcadia.

     5.15 Promptly furnish Bank with notice of any merger or acquisition of the Parent Guarantor
into, with or by any other Person.

     5.16 Cause Arcadia to maintain Subordinated Debt owing to Arcadia Resources, Inc. and/or
additional paid in capital of Arcadia (as reflected as a line item on Arcadia’s financial
statements) of not less than $15,500,000 in the aggregate at all times. Nothing set forth in this
Section 5.16 shall constitute Bank’s consent to the payment of any Subordinated Debt.

6. NEGATIVE COVENANTS

     Each of the Companies covenants and agrees that, so long as Bank may make any Advances under
this Agreement and thereafter so long as any Indebtedness remains outstanding under this Agreement,
it will not, and it will not permit its Subsidiaries to, without the prior written consent of Bank:

     6.1 Purchase, acquire, issue (except as permitted in Section 6.9) or redeem any of its capital
stock or make any material change in its capital structure.

     6.2 Enter into any merger or consolidation or sell, lease, transfer, or dispose of all,
substantially all, or any part of its assets, (i) except sales of Inventory in the ordinary course
of its business, (ii) dispositions of obsolete equipment to the extent not exceeding $100,000
during any single fiscal year, and (iii) sales, transfers and dispositions of other assets not
described in subclauses (i) and (ii) and not in excess of $100,000 during any single fiscal year.

     6.3 Guarantee, endorse, or otherwise become secondarily liable for or upon the obligations of
others, except by endorsement for deposit in the ordinary course of business and guaranties in
favor of Bank.

     6.4 Purchase or otherwise acquire or become obligated for the purchase of all or substantially
all of the assets or business interests of any person, firm or corporation or any shares of stock
of any corporation, trusteeship or association or in any other manner effectuate or attempt to
effectuate an expansion of present business by acquisition.

14

 

     6.5 Become or remain obligated for any indebtedness for borrowed money, or for any
indebtedness incurred in connection with the acquisition of any property, real or personal,
tangible or intangible, except:

	 	(a)	 	indebtedness to Bank;
	 
	 	(b)	 	current unsecured trade payables and accrued liabilities arising in the ordinary course of
any Company’s business;
	 
	 	(c)	 	the Subordinated Debt;
	 
	 	(d)	 	indebtedness owing from one Company to another Company;
	 
	 	(e)	 	indebtedness not to exceed $150,000 in the aggregate at any time outstanding secured by
purchase money liens permitted by Section 6.6(b); and
	 
	 	(f)	 	other unsecured indebtedness not exceeding $75,000 at any time outstanding.

     6.6 Affirmatively pledge or mortgage any of its assets, whether now owned or hereafter
acquired, or create, suffer or permit to exist any lien, security interest in, or encumbrance
thereon, except (collectively, the “Permitted Liens”):

	 	(a)	 	to Bank;
	 
	 	(b)	 	liens and security interests upon fixed assets acquired by a Company after the date of
this Agreement (including by virtue of a Capital Lease) to secure the indebtedness permitted by
Section 6.5(e) provided that (i) any such lien or security interest is created solely for the
purpose of securing indebtedness representing, or incurred to finance, the cost of the item of
property subject thereto; (ii) the principal amount of the indebtedness secured by such lien does
not exceed 100% of the fair value of the property at the time it was acquired, and (iii) the lien
or security interest does not cover any other property other than such item of property; and
	 
	 	(c)	 	the Ordinary Course Liens.

     6.7 Sell, assign, transfer or confer a security interest in any account, contract, note, trade
acceptance or other receivable, except to Bank.

     6.8 Materially alter the character of its businesses from that conducted as of the date of
this Agreement.

     6.9 Declare or pay any dividends or make any other distribution upon its shares of capital
stock except dividends payable in the capital stock of Companies and dividends by a Subsidiary of a
Company to a Company.

15

 

     6.10 Enter into any transaction or series of transactions with any Affiliate other than on
terms and conditions as favorable to Companies as would be obtainable in a comparable arms-length
transaction with a Person other than an Affiliate.

     6.11 Make or allow to remain outstanding any investment (whether such investment shall be of
the character of investment in shares of stock, evidences of indebtedness or other securities or
otherwise) in, or any loans or advances to, any person, firm, corporation or other entity or
association, except:

	 	(a)	 	advances made for expenses or purchases in the ordinary course of business; and
	 
	 	(b)	 	loans or advances made by a Company to another Company.

     6.12 Allow any fact, condition or event to occur or exist with respect to any employee pension
and/or profit sharing plan of any of the Companies or any Subsidiaries, which shall constitute
grounds for termination of such plan by the PBGC or for the appointment by a United States District
Court of a trustee to administer any such plan.

     6.13 Enter into or become subject to any agreement (other than this Agreement) (i) prohibiting
the creation or assumption of any lien or encumbrance upon the properties or assets of any Company
or (ii) requiring an obligation to become secured (or further secured) if another obligation is
secured or further secured.

     6.14 Make any payment or redemption of the Subordinated Debt.

7. ENVIRONMENTAL PROVISIONS

     7.1 For the purposes of this Agreement the term “Environmental Laws” shall mean all federal,
state and local laws including statutes, regulations, ordinances, codes, rules, and other
governmental restrictions and requirements, relating to environmental pollution, contamination or
other impairment of any nature, any hazardous or other toxic substances of any nature, whether
liquid, solid and/or gaseous, including smoke, vapor, fumes, soot, acids, alkalis, chemicals,
wastes, by-products, and recycled materials. Environmental Laws shall include but not be limited to
the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976, the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act of 1986, regulations of the Environmental Protection Agency, regulations of the
Nuclear Regulatory Agency, regulations of any state department of natural resources or state
environmental protection agency now or at any time hereafter in effect and local health department
ordinances.

     7.2 Each of the Companies shall timely comply in all material respects with all applicable
Environmental Laws.

     7.3 Each of the Companies shall provide to the Bank, immediately upon receipt, copies of any
correspondence, notice, pleading, citation, indictment, complaint, order, decree, or other document
from any source asserting or alleging a circumstance or condition which requires or may require a
financial contribution by any of the Companies or any Subsidiary or a cleanup,

16

 

removal, remedial action, or other response by or on the part of either of the Companies or any
Subsidiary under applicable Environmental Laws or which seeks damages or civil, criminal or
punitive penalties from any Company or any Subsidiary for an alleged violation of Environmental
Laws.

     7.4 Each of the Companies shall promptly notify the Bank in writing as soon as it becomes
aware of any condition or circumstance which makes the environmental warranties contained in this
Agreement incomplete or inaccurate in any material respect as of any date.

     7.5 In the event of any condition or circumstance that makes any environmental warranty,
representation and/or agreement incomplete or inaccurate in any material respect as of any date,
Companies shall, at their sole expense, if reasonably requested by Bank, retain an environmental
professional consultant, reasonably acceptable to Bank, to conduct a thorough and complete
environmental audit regarding the changed condition and/or circumstance and any environmental
concerns arising from that changed condition and/or circumstance. A copy of the environmental
consultant’s report will be promptly delivered to both Bank and Companies upon completion.

     7.6 At any time if any of the Companies, directly or indirectly through any professional
consultant or other representative, determines to undertake an environmental audit, assessment or
investigation, it shall promptly provide the Bank with written notice of the initiation of the
environmental audit, fully describing the purpose and intended scope of the environmental audit.
Upon receipt, Companies will promptly provide to the Bank copies of all final findings and
conclusions of any such environmental investigation. Preliminary findings and conclusions shall be
provided if final reports have not been completed and delivered to the Bank within 60 days
following completion of the preliminary findings and conclusions.

     7.7 Each of the Companies hereby indemnifies, saves and holds the Bank and any of its past,
present and future officers, directors, shareholders, employees, representatives and consultants
harmless from any and all loss, damages, suits, penalties, costs, liabilities and expenses
(including but not limited to reasonable investigation, environmental audit(s), and legal expenses)
arising out of any claim, loss or damage of any property, injuries to or death of persons,
contamination of or adverse affects on the environment, or any violation of any applicable
Environmental Laws, caused by or in any way related to any property owned, leased or operated by
Companies, or due to any acts of either of the Companies, its officers, directors, shareholders,
employees, consultants and/or representatives. In no event shall either of the Companies be liable
hereunder for any loss, damages, suits, penalties, costs, liabilities or expenses arising from any
intentional wrongful act or act of gross negligence of the Bank, or its agents or employees.

     It is expressly understood and agreed that the indemnification granted herein is intended to
protect the Bank, its past, present and future officers, directors, shareholders, employees,
consultants and representatives from any claims that may arise by reason of the security interest,
liens and/or mortgages granted to the Bank, or under any other document or agreement given to
secure repayment of any indebtedness from either of the Companies, whether or not such claims arise
before or after the Bank has foreclosed upon and/or otherwise become the owner of any

17

 

such property. All obligations of indemnity as provided hereunder shall be secured by the
collateral documents.

     It is expressly agreed and understood that the provisions hereof shall and are intended to be
continuing and shall survive the repayment of any indebtedness from Companies to the Bank.

     7.8 Each of the Companies and its Subsidiaries have and shall maintain all permits, licenses
and approvals required under applicable Environmental Laws.

8. EVENTS OF DEFAULT

     8.1 Upon occurrence of any of the following events of default:

	 	(a)	 	non-payment of any installment of the principal or interest on the Note when due, or
non-payment of any other outstanding Indebtedness when due, and (in each case) continuance thereof
for five (5) Business Days;
	 
	 	(b)	 	default in the observance or performance of any of the conditions, covenants or agreements of
Companies set forth in Sections 5.1, 5.3, 5.4, 5.5, 5.6, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15 or 6
(in its entirety);
	 
	 	(c)	 	default in observance or performance of any of the other conditions, covenants or agreements of
any Company herein set forth, and continuance thereof for thirty (30) days after written notice to
Companies by Bank;
	 
	 	(d)	 	any material representation or warranty made by any Company herein or in any instrument
submitted pursuant hereto proves untrue in any material respect when made or deemed made;
	 
	 	(e)	 	default in the observance or performance of any of the conditions, covenants or agreements of
any Company set forth in any collateral document of security which may be given to secure the
indebtedness hereunder or in any other document related to or connected with this Agreement or the
indebtedness hereunder, and lapse of any applicable grace or cure period;
	 
	 	(f)	 	default in the payment of any other obligation of any Company, any of its Subsidiaries or any
Guarantor for borrowed money in an aggregate amount in excess of Twenty Thousand Dollars ($20,000),
or in the observance or performance of any conditions, covenants or agreements related or given
with respect to any obligations for borrowed money in an aggregate amount in excess of Twenty
Thousand Dollars ($20,000) sufficient to permit the holder thereof to accelerate the maturity of
such obligation;
	 
	 	(g)	 	judgments for the payment of money in excess of the sum of Twenty Thousand Dollars ($20,000) in
the aggregate shall be rendered against any Company, any of its Subsidiaries or any Guarantor and
such judgments shall remain unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a
period of thirty (30) consecutive days from the date of its entry and such judgment is not covered

18

 

	 	 	 	by insurance from a solvent insurer who is defending such action without reservation of
rights;
	 
	 	(h)	 	the occurrence of any “reportable event”, as defined in the Employee Retirement Income
Security Act of 1974 and any amendments thereto, which is determined to constitute grounds for
termination by the Pension Benefit Guaranty Corporation of any employee pension benefit plan
maintained by or on behalf of any Company for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a trustee to administer such plan
and is reasonably likely that the occurrence of such event would result in a material adverse
effect on Companies, and such reportable event is not corrected and such determination is not
revoked within sixty (60) days after notice thereof has been given to the plan administrator or
Companies; or the institution of proceedings by the Pension Benefit Guaranty Corporation to
terminate any such employee benefit pension plan or to appoint a trustee to administer such plan;
or the appointment of a trustee by the appropriate United States District Court to administer any
such employee benefit pension plan;
	 
	 	(i)	 	if there shall be any change for any reason whatsoever in the management, ownership or
control of any of the Companies, which shall in the reasonable judgment of Bank materially
adversely affect future prospects for the successful operation of any Company or any Subsidiary;
	 
	 	(j)	 	if any Guaranty or Subordination Agreement is revoked in whole or in part; or if there
occurs any default under the terms of any Guaranty or Subordination Agreement;
	 
	 	(k)	 	If Companies shall pay or any holder of Subordinated Debt shall accept, any payment or
distribution of the Subordinated Debt in violation of the Subordination Agreement; or if there
occurs any other default by any holder of Subordinated Debt under the terms of the Subordination
Agreements; or
	 
	 	(l)	 	if Bank shall for any reason deem itself to be insecure, believing in good faith that the
prospect of payment of or performance of the Indebtedness is materially impaired. 

then, or at any
time thereafter, unless such default is remedied, Bank may give written notice to Companies
declaring all outstanding Indebtedness hereunder and under the Note to be due and payable,
whereupon all Indebtedness then outstanding hereunder and under the Note shall immediately become
due and payable without further notice and demand, and Bank shall not be obligated to make further
Advances hereunder.

     8.2 If a creditors’ committee shall have been appointed for the business of any Company or any
of its Subsidiaries or any Guarantor in connection with any bankruptcy or insolvency; or if any
Company or any of its Subsidiaries or any Guarantor shall have made a general assignment for the
benefit of creditors or shall have been adjudicated bankrupt, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to effect a plan or

19

 

arrangement with creditors; or shall file an answer to a creditor’s petition or other petition
filed against it, admitting the material allegations thereof for an adjudication in bankruptcy or
for reorganization; or shall have applied for or permitted the appointment of a receiver, or
trustee or custodian for any of its property or assets; or such receiver, trustee or custodian
shall have been appointed for any of its property or assets (otherwise than upon application or
consent of applicable Company, Subsidiary or Guarantor, as applicable), and such receiver, trustee
or custodian so appointed shall not have been discharged within sixty (60) days after the date of
his appointment or if an order shall be entered and shall not be dismissed or stayed within sixty
(60) days from its entry, approving any petition for reorganization of any Company or any of its
Subsidiaries or any Guarantor; then the Note and all indebtedness then outstanding hereunder shall
automatically become immediately due and payable and Bank shall not be obligated to make further
Advances under this Agreement.

     8.3 Upon the occurrence and during the continuance of an Event of Default, unless all of the
Indebtedness is then immediately fully paid, Bank shall have and may exercise any one or more of
the rights and remedies for which provision is made for a secured party under the Michigan Uniform
Commercial Code (“UCC”), under the Security Agreements or under any other document contemplated
hereby or for which provision is provided by law or in equity, including, without limitation, the
right to take possession and sell, lease or otherwise dispose of any or all of the collateral and
to set off against the Indebtedness any amount owing by Bank to a Company and/or any property of a
Company in possession of Bank. Companies agree, upon request of Bank, to assemble the collateral
and make it available to Bank at any place designated by Bank which is reasonably convenient to
Bank and Companies.

     8.4 All of the Indebtedness shall constitute one loan secured by Bank’s security interest in
the collateral and by all other security interests, mortgages, liens, claims, and encumbrances now
and from time to time hereafter granted from Companies to Bank. Upon the occurrence and during the
continuance of an Event of Default which is not cured within the cure period, if any, provided
hereunder, Bank may in its sole discretion apply the collateral to any portion of the Indebtedness.
The proceeds of any sale or other disposition of the Collateral authorized by this Agreement shall
be applied by Bank, first upon all expenses authorized by the UCC (or other applicable law) or
otherwise in connection with the sale and all reasonable attorneys’ fees and legal expenses
incurred by Bank; the balance of the proceeds of such sale or other disposition shall be applied in
the payment of the Indebtedness, first to interest, then to principal, then to other Indebtedness
and the surplus, if any, shall be paid over to Companies or to such other Person or Persons as may
be entitled thereto under applicable law. Companies shall remain liable for any deficiency, which
Companies shall pay to Bank immediately upon demand.

     8.5 The remedies provided for herein are cumulative to the remedies for collection of the
Indebtedness as provided by law, in equity or by any mortgage, security agreement or other document
contemplated hereby. Nothing herein contained is intended, nor shall it be construed, to preclude
Bank from pursuing any other remedy for the recovery of any other sum to which Bank may be or
become entitled for the breach of this Agreement by Companies.

     8.6 The remedies provided for herein are cumulative to the remedies for collection of the
Indebtedness as provided by law, in equity or by any mortgage, security agreement or other

20

 

document contemplated hereby. Nothing herein contained is intended, nor shall it be construed, to
preclude Bank from pursuing any other remedy for the recovery of any other sum to which Bank may be
or become entitled for the breach of this Agreement by Companies.

     8.7 Upon the occurrence and during the continuance of any Event of Default, Companies shall
immediately upon demand by Bank deposit with Bank cash collateral in the amount equal to the
maximum amount available to be drawn at any time under any Letter of Credit then outstanding.

9. MISCELLANEOUS

     9.1 This Agreement shall be binding upon and shall inure to the benefit of Companies and Bank
and their respective successors and assigns, except that the credit provided for under this
Agreement and no part thereof and no obligation of Bank hereunder shall be assignable or otherwise
transferable by any Companies.

     9.2 Companies shall pay all closing costs and expenses, including, by way of description and
not limitation, reasonable outside attorney fees, lien search fees, and title policy fees incurred
by Bank in connection with the commitment, consummation and closing of this Agreement. All costs,
including reasonable attorney fees incurred by Bank in protecting or enforcing any of its or any of
the Bank’s rights against Companies or any collateral or in defending Bank from any claims or
liabilities by any party or otherwise incurred by Bank in connection with an event of default or
the enforcement of this Agreement or the related documents, including by way of description and not
limitation, such charges in any court or bankruptcy proceedings or arising out of any claim or
action by any person against Bank which would not have been asserted were it not for Bank’s
relationship with Companies hereunder, shall also be paid by Companies.

     9.3 Where the character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation is required to be
made for the purposes of this Agreement, it shall be done in accordance with GAAP, consistently
applied.

     9.4 No delay or failure of Bank in exercising any right, power or privilege hereunder shall
affect such right, power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or privilege. The rights of
Bank under this Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have.

     9.5 All notices or other communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given (i) if physically delivered, (ii) three (3) business
days after having been deposited in the United States Mail, as certified mail with return receipt
requested and with postage prepaid, or (iii) one (1) business day after having been transmitted to
a third party providing delivery services in the ordinary course of business which guarantees
delivery on the next business day after such transmittal (e.g., via Federal Express), all of which
notices or other communications shall be addressed to the recipient as follows:  
To Companies:

21

 

Arcadia Services, Inc.

9229 Delegates Row

Suite 260

Indianapolis, IN 46240

Attention: Matthew R. Middendorf

To Bank:

Comerica Bank

100 NE Third Avenue

Suite 600

Ft. Lauderdale, FL 33301

Attention: MMBI-Florida; Justin R. Milligan

     9.6 This Agreement and the Note have been delivered at Detroit, Michigan, and shall be
governed by and construed and enforced in accordance with the laws of the State of Michigan.
Whenever possible each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

     9.7 No amendments or waiver of any provisions of this Agreement nor consent to any departure
by Companies therefrom shall in any event be effective unless the same shall be in writing and
signed by the Bank and Companies, and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No amendment, waiver or
consent with respect to any provision of this Agreement shall affect any other provision of this
Agreement.

     9.8 All sums payable by Companies to Bank under this Agreement or the other documents
contemplated hereby shall be paid directly to Bank at its principal office set forth in Section 9.5
hereof in immediately available United States funds, without set off, deduction or counterclaim.
In its sole discretion, Bank may charge any and all deposit or other accounts (including without
limit an account evidenced by a certificate of deposit) of each Company with Bank for all or a part
of any Indebtedness then due; provided, however, that this authorization shall not affect
Companies’ obligation to pay, when due, any Indebtedness whether or not account balances are
sufficient to pay amounts due.

     9.9 Any payment of the Indebtedness made by mail will be deemed tendered and received only
upon actual receipt by Bank at the address designated for such payment, whether or not Bank has
authorized payment by mail or any other manner, and (subject to any grace period in Section 8.1(a))
shall not be deemed to have been made in a timely manner unless received on the date due for such
payment, time being of the essence. Companies expressly assume all risks of loss or liability
resulting from non-delivery or delay of delivery of any item of payment transmitted by mail or in
any other manner. Acceptance by Bank of any payment in an amount less than the amount then due
shall be deemed an acceptance on account only, and the

22

 

failure to pay the entire amount then due shall be and continue to be an Event of Default, and at
any time thereafter and until the entire amount then due has been paid, Bank shall be entitled to
exercise any and all rights conferred upon it herein upon the occurrence of an Event of Default.
Upon the occurrence and during the continuance of an Event of Default, Companies waive the right to
direct the application of any and all payments at any time or times hereafter received by Bank from
or on behalf of Companies. Upon the occurrence and during the continuance of an Event of Default,
Companies agree that Bank shall have the continuing exclusive right to apply and to reapply any and
all payments received at any time or times hereafter against the Indebtedness in such manner as
Bank may deem advisable, consistent with the terms hereof, notwithstanding any entry by Bank upon
any of its books and records. Companies expressly agree that to the extent that Bank receives any
payment or benefit and such payment or benefit, or any part thereof, is subsequently invalidated,
declared to be fraudulent or preferential, set aside or is required to be repaid to a trustee,
receiver, or any other party under any bankruptcy act, state or federal law, common law or
equitable cause, then to the extent of such payment or benefit, the Indebtedness or part thereof
intended to be satisfied shall be revived and continued in full force and effect as if such payment
or benefit had not been made and, further, any such repayment by Bank, to the extent that Bank did
not directly receive a corresponding cash payment, shall be added to and be additional Indebtedness
payable upon demand by Bank.

     9.10 In the event Companies’ obligation to pay interest on the principal balance of the Note
is or becomes in excess of the maximum interest rate which Companies are permitted by law to
contract or agree to pay, giving due consideration to the execution date of this Agreement, then,
in that event, the rate of interest applicable shall be deemed to be immediately reduced to such
maximum rate and all previous payments in excess of such maximum rate shall be deemed to have been
payments in reduction of principal and not of interest.

     9.11 The Revolving Credit will not be on a remittance basis, but Companies shall maintain a
lockbox at Bank. All funds in the lockbox will be swept daily to Borrowers’ operating account at
Bank. Bank reserves its rights under the Security Agreements to request that the Revolving Credit
be on a remittance basis in the future, whether or not an Event of Default has occurred.

     9.12 This Agreement shall become effective upon the execution hereof by Bank and Companies

     9.13 COMPANIES AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR
IN ANY WAY RELATED TO, THIS AGREEMENT, THE NOTES OR THE INDEBTEDNESS.

     9.14 When used in this Agreement, the term “Companies” shall mean all or any of them. The
obligations and liabilities of Companies under this Agreement are joint and several.

23

 

     9.15 This Agreement amends, restates and replaces the Prior Agreement.

     WITNESS the due
execution hereof as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	COMERICA BANK	 	ARCADIA SERVICES, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael D. Malaga	 	By:	 	/s/ Matthew R. Middendorf	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Michael D. Malaga	 	 	 	   Matthew R. Middendorf	 	 
	Its:

	 	Vice
President	 	Its:
	 	   Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	GRAYROSE, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew R. Middendorf	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	   Matthew R. Middendorf	 	 
	 

	 	 	 	Its:
	 	   Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	ARCADIA HEALTH SERVICES OF
MICHIGAN, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew R. Middendorf	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	   Matthew R. Middendorf	 	 
	 

	 	 	 	Its:
	 	   Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	ARCADIA HEALTH SERVICES, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew R. Middendorf	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	   Matthew R. Middendorf	 	 
	 

	 	 	 	Its:
	 	   Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	ARCADIA EMPLOYEE SERVICES,
INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Matthew R. Middendorf	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	   Matthew R. Middendorf	 	 
	 

	 	 	 	Its:
	 	   Treasurer	 	 

24

 

COVENANT COMPLIANCE CERTIFICATE

				
	 	To:	 	Comerica Bank

				
	 	Re:	 	Amended and Restated Credit Agreement dated July 13, 2009, as may be amended, restated,
replaced or supplemented from time to time (the “Agreement”) among ARCADIA SERVICES, INC., ARCADIA
HEALTH SERVICES, INC., GRAYROSE,
INC., ARCADIA HEALTH SERVICES OF MICHIGAN, INC., and ARCADIA EMPLOYEE SERVICES, INC., (collectively
“Companies” and individually as a “Company”) and Comerica Bank (“Bank”).

     This Covenant Compliance Certificate (“Certificate”) is furnished pursuant to Section 5.6 of
the Agreement and sets forth various information as of ___, 200___ (the “Computation
Date”).

          1. Tangible Effective Net Worth. On the Computation Date, Companies’ Tangible
Effective Net Worth, which is required to be not less than
$___ was ___ as
computed in the supporting documents attached hereto as Schedule 1.

          2. Net Income. On the Computation Date, the Companies’ Net Income, for the fiscal quarter
ending on such date, which is required to be not less than $400,000
was ___ as computed in
the supporting documents attached hereto as Schedule 2.

          The undersigned officers of the Companies hereby certifies that:

          A. All of the information set forth in this Certificate (and in any Schedule attached hereto)
is true and correct in all material respects.

          B. As of the Computation Date, Companies have observed and performed all of their covenants
and other agreements contained in the Agreement and in any other Loan Documents to be observed,
performed and satisfied by Companies.

          C. The undersigned has reviewed the Agreement and this Certificate is based on an examination
sufficient to assure that this Certificate is accurate.

          D. Except as stated in Schedule 3 hereto (which shall describe any existing Event of Default
(or event which with the giving of notice or passage of time or both would constitute an Event of
Default (“Default”)) and the notice and period of existence thereof and any action taken with
respect thereto or contemplated to be taken by Companies), no Default or Event of Default has
occurred and is continuing on the date of this Certificate.

          Capitalized terms used in this Certificate and in the schedules hereto, unless specifically
defined to the contrary, have the meanings given to them in the Agreement.

25

 

     IN WITNESS WHEREOF, Companies have caused this Certificate to be executed and delivered by its
duly authorized officer this ___ day of                     , 200___.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	ARCADIA SERVICES, INC.	 	GRAYROSE, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	Matthew Middendorf, Treasurer
	 	Its:
	 	Matthew Middendorf, Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	ARCADIA HEALTH SERVICES OF
MICHIGAN, INC.	 	ARCADIA HEALTH SERVICES, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	Matthew Middendorf, Treasurer
	 	Its:
	 	Matthew Middendorf, Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	ARCADIA EMPLOYEE SERVICES INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	Matthew Middendorf, Treasurer	 	 	 	 	 	 

26

 

SCHEDULE 4.3

LITIGATION

Aneita Fowler filed a Charge of Discrimination on 6/10/03 with the St. Petersburg Community Affairs
Department based on discrimination for sex, female and race, black. The case is being handled by
Steve J. Weiss of Hertz, Scham, Saretsky, P.C. Mr. Weiss believes the claim is completely lacking
in merit (complainant was replaced by an African-American female).

Cain et al. v. Arcadia Services, Inc.: Arcadia Services, Inc. is named in lawsuit in Michigan,
sought to be certified as a class action, relating to employment discrimination where plaintiff
alleges that Arcadia allowed clients to determine which employ would work as a home health aide
based on racial preferences.

Medlin v. Citrus Memorial Hospital: An Arcadia Health Services, Inc. nurse (the “Arcadia Nurse”),
was a service provider at Citrus Memorial Hospital where plaintiff, Mr. Medlin, received medical
care. Citrus was sued by Medlin for negligent care. Citrus has settled the case and is now looking
to Arcadia, who was not named in the original lawsuit, for contribution. Arcadia maintains that the
Arcadia Nurse was not negligent in Mr. Medlin’s care and is not responsible for any damages, and
thus, the settlement cost remains solely with Citrus Memorial Hospital.

27

 

SCHEDULE 4.5

ERISA PLANS

None

 

 

SCHEDULE 4.8

SUBSIDIARIES

Arcadia Services, Inc. is the direct or indirect parent to the following wholly owned subsidiaries:

	 	•	 	Arcadia Health Services, Inc., a Michigan Corporation
	 
	 	•	 	Arcadia Health Services of Michigan, Inc., a Michigan Corporation
	 
	 	•	 	Grayrose, Inc., a Michigan Corporation
	 
	 	•	 	Arcadia Employee Services, Inc., a Michigan Corporation
	 
	 	•	 	Arcadia Home Health Care Services, Inc., a Michigan Corporation
	 	 	 	     (f/k/a Arcadia Staff Resources, Inc.)
	 
	 	•	 	ASR Staffing, Inc., a Michigan Corporation
	 
	 	•	 	Home Health Professionals, Inc., a Delaware Corporation 
     (a wholly owned subsidiary of
Arcadia Health Services of Michigan, Inc.)

 

 

SCHEDULE 4.10

ENVIRONMENTAL LITIGATION

None

 

 

SCHEDULE 4.16

LOCATIONS OF TANGIBLE PERSONAL PROPERTY

	 	 	 	 	 	 	 
	 	 	Locations of Tangible	 	Owned or	 	 
	Company	 	Personal Property	 	Leased	 	If Leased, Name of Lessor
	Arcadia Services, Inc.

	 	26777 Central Park Boulevard

Suite 200

Southfield, MI, 48076
	 	Leased
	 	Gateway Office Associates Limited

Partnership LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	1124 W. Granada Blvd

Ormond Beach, FL, 32174
	 	Leased
	 	DeRRu Properties Inc.
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	4350 Fowler Street

Suite 3

Ft. Myers, FL, 33901
	 	Leased
	 	ECI Health Care Properties Inc.
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	7815 North Dale Mabry

Suite 110

Tampa, FL, 33614
	 	Leased
	 	J&A Corporation of Tampa
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	3639 Cortez Road West

Suite 110

Bradenton, FL, 34210
	 	Leased
	 	Vector Corporate Park, Ltd., LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	710 94th Avenue North

Suite 303

St. Petersburg, FL, 33702
	 	Leased
	 	Robert Resnik & Sharon Resnik 
(dba
Southern Investment Trust)
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	693 Capital Avenue SW

Battle Creek, MI, 49015
	 	Leased
	 	Southern Michigan Bancorp, Inc.
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	455 E Grand River

Suite 201A

Brighton, MI, 48116
	 	Leased
	 	Morrison RE, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	10 Vans Avenue

Suite 6

Coldwater, MI, 49036
	 	Leased
	 	John Long & Randy Sanders
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	2380 Aurora Pond Drive

Suite 239

Wyoming, MI, 49519
	 	Leased
	 	Aurora Pond
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	3029 Page Avenue 
Jackson,
MI, 49203
	 	Leased
	 	Robele Investments L.L.C.
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	5413 S. Westnedge Avenue

Suite D & E

Portage, MI, 49002
	 	Leased
	 	234 Cedar Inc.
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	6540 Millennium Drive

Suite 160

Lansing, MI, 48917
	 	Leased
	 	MEIP Borrower C LLC
	 
	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 	 	Locations of Tangible	 	Owned or	 	 
	Company	 	Personal Property	 	Leased	 	If Leased, Name of Lessor
	Arcadia Health Services of
Michigan, Inc.

	 	920 East Maple

Birmingham, MI, 48009
	 	Leased
	 	Elmwood Properties I, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	3597 Henry Street

Suite 101

Norton Shores, MI, 49441
	 	Leased
	 	Colonial Square Office Park, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services of
Michigan, Inc.

	 	1956 Mall Place

Benton Harbor, MI, 49022
	 	Leased
	 	Orchards Park, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	1009 South Park Street

Asheboro, NC, 27203
	 	Leased
	 	Bennett-McKenzie Partnership of

Randolph Company
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	770 Patton Avenue

Suite F

Asheville, NC, 28806
	 	Leased
	 	Charles N. Dowsett and E. Marian
Dowsett
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	616 Pasteur Drive

Greensboro, NC, 27403
	 	Leased
	 	Carolina Healthcare Initiatives, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	101 North Third Street

Mebane, NC, 27302
	 	Leased
	 	Davis & Humbert
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	3901 Barrett Drive

Suite 210

Raleigh, NC, 27609
	 	Leased
	 	3901 Barrett Drive Associates, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	1033 Randolph Street

Suite 21

Thomasville, NC, 27360
	 	Leased
	 	Southgate Plaza Associates, LLC
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	1760 Jonestown Road

Suite 100

Winston-Salem, NC, 27103
	 	Sub-Leased
	 	Aerocare Holdings, Inc.
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	1650 W. Market Street

Suite 27

Akron, OH, 44313
	 	Leased
	 	Apollo Corporation
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	14077 Cedar Road

Suite 101 

South Euclid, OH, 44118
	 	Leased
	 	Walterstone Family Limited

Partnership
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	1250 W. Dorothy Lane

Suite 304

Dayton, OH, 45409
	 	Leased
	 	Caplina Family Limited
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	317 Bustleton Pike

Feasterville, PA, 19053
	 	Leased
	 	Dennis Zaporowski
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	3 Parkway Center East

2020 Ardmore Blvd, Suite 323

Pittsburgh, PA, 15221
	 	Leased
	 	Curtis I Kossman & Mark D.

Kossman
	 
	 	 	 	 	 	 
	Arcadia Health Services, Inc.

	 	762 Independence Boulevard

Suite 100 A

Virginia Beach, VA, 23455
	 	Leased
	 	Horizon Investment Co., LLC

2

 

SCHEDULE 6.6

LIENS

None

 

 

SCHEDULE 6.10

ENVIRONMENTAL MATTERS

None

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