Document:

EX-10.1

Exhibit 10.1

 

 

WOODLANDS INSURANCE COMPANY, INC

100 Bank Street, Suite 610

Burlington, Vermont 05401

Telephone: (802) 864-5599

(Please read the entire policy wording to ensure that it meets your requirements)

POLICY REFERENCE: DED-2007-001

DEDUCTIBLE AND SELF-INSURANCE RETENTION

INDEMNIFICATION

NAMED INSURED:

Bottling Group LLC

1 Pepsi Way

Somers, NY 10589

PERIOD: January 1, 2007 — January 1, 2008

POLICY NUMBER: DED-2007-001

 

 

 

 

LIST OF CONTENTS 

FORMS MADE PART OF THIS POLICY AT TIME OF ISSUANCE

	 	 	 	 	 
	Declaration Page
	 	 	1	 
	 
	 	 	 	 
	Definitions
	 	 	2-6	 
	 
	 	 	 	 
	Endorsements
	 	 	7-9	 

 

 

WOODLANDS INSURANCE COMPANY, INC.

DEDUCTIBLE AND SELF-INSURANCE RETENTION INDEMNIFICATION POLICY

(“POLICY”)

DECLARATIONS 

	 	 	 
	Item 1. Named Insured:

	 	Bottling Group LLC

1 Pepsi Way

Somers, NY 10589
	 
	 	 
	Item 2. Policy Number:

	 	DED — 2007-001
	 
	 	 
	Item 3. Policy Term:

	 	January 1, 2007 — January 1, 2007
	 
	 	 
	Item 4. Deposit Premium:

	 	 $57,539,253.60 plus any taxes, fees and/or assessments resulting from issuance of this policy

			
	Item 5.	 	Deductible policy(s) and See Endorsement No. 1

Self-Insurance Excess

Workers’ Compensation and

Employers’ Liability policy(s):

	 	 	 
	Item 6. Limits of Liability:

	 	See Endorsement No. 1
	 
	 	 
	Items 7. Insurer:

	 	Woodlands Insurance Company, Inc. (“Company”)

WOODLANDS INSURANCE COMPANY, INC.

Date: December 11, 2007

By: _________________________________

 

 

	1.	 	In consideration of $57,539,253.60 paid to the Insurer, insurance afforded by this Policy
shall follow the terms and conditions of the policies listed in Endorsement 1, said terms
being incorporated herein by reference, covering the same period and the Named Insured
referred to herein, except where the conditions herein differ. All premiums hereunder are due
on or before January 1, 2007, or may be financed during the year subject to mutually agreed
financing terms and conditions.

The policy premium specified in Item 4 of the declarations page is a guaranteed cost
premium and any taxes, fees and/or assessments resulting from issuance of this Policy will be
billed separately to the Named Insured. The premium is adjustable only for divestitures and
acquisitions, in the manner and the amount which will be negotiated at the time of the
divestiture or acquisition.

	2.	 	The Company agrees that if the Named Insured is obligated to pre-fund losses within any
Deductible or Self-Insured Retention provisions of or associated with the policies listed in
Endorsement 1 or pursuant to any Finance Agreement related thereto, the Company will advance
to the Named Insured sufficient funds to meet these obligations. The foregoing shall apply
whether the funds are advanced directly by the Named Insured or under a Letter of Credit or
other collateral arrangement required pursuant to the terms of any Finance Agreement
associated with the policies in Item 5 of the declarations page. The Company and the Named
Insured will reconcile any advancement of funds under this Paragraph B at the same time and
under the same terms and conditions as the reconciliation of funds between the Named Insured
and the insurer(s) of the policies in Item 5 of the declarations page. If upon “Final
Settlement” the Named Insured received a return of any of these pre-funded losses from the
insurer of the policies in Item 5 of the declarations page, the Named Insured shall
immediately remit such funds to the Company. “Final Settlement” shall be defined as either the
date on which all claims that have arisen under the policies in Item 5 of the declarations
page and any associated Finance Agreement have been closed and the insurer on these policies
is satisfied that no new claims will arise under these policies, or the date on which the
Named Insured and the insurer of the policies in Item 5 of the declarations page have mutually
agreed in writing to be deemed as the final settlement date.
	 
	3.	 	The Company’s limit of liability under this Policy is equal to the Named Insured’s
obligations to pay or pre-fund losses and loss adjustment expenses within any Deductible or
Self-Insured Retention provision of the policies in Item 5 of the declarations page and any
associated Finance Agreement.
	 
	4.	 	The Named Insured shall provide the Insurer every month with a statement of current paid
losses, paid losses to date and cumulative incurred losses.
	 
	5.	 	As respects the losses and expenses covered by this Policy, the liability of the Insurer
shall attach simultaneously with that of the Named Insured and shall be subject in all
respects to the same risks, terms, conditions, interpretations, waivers, and to the same
modifications, alterations, and cancellations as in the policies listed in Endorsement 1 and
the Deductible or Self-Insured Retention provisions and the Finance Agreement associated
therewith, and the Company shall, in all respects, follow the fortunes of the Named Insured
with respect thereto. In the event that any of the Named Insureds for the insurance policies
listed in Endorsement 1 are added, deleted, or modified, this Policy and its declarations page
shall simultaneously be modified to add, delete, or modify its Named Insureds to reflect this
change for the same coverage provided by this Policy. All loss settlements agreed to by Named
Insured, provided they are within the terms and conditions of this Policy, shall be binding
upon the Insurer and the Insurer will indemnify the Named Insured for all reasonable cost
incurred in adjustment, investigation, settlement and defense within the limits of liability
of this Policy.
	 
	6.	 	The Insurer shall have the right for cause to undertake, but not the duty to undertake, so
long as the Named Insured undertakes in lieu of the Insurer, to:

	 	a)	 	assume responsibility for all investigation, settlement and defense obligations under
all policies listed in Endorsement 1,

 

 

	 	 b)	 	to contract for such services as may be required from any agreed upon company, to carry
out the administration of this arrangement.

	7.	 	The Insurer and Named Insured may offset any balance(s), whether on account of premiums,
administrative fees or paid losses, due from one party to the other under this Policy or under
any other agreement in connection with the matters set forth herein heretofore or hereafter
entered into between the Insurer and the Named Insured.
	 
	8.	 	Upon receipt by the Insurer of the premium due Insurer under this Policy, this Policy may not
be canceled by either party. This Policy may be non-renewed by either party upon not less than
one hundred and twenty (120) days prior written notice, one to the other stating when
thereafter the insurance afforded hereunder shall terminate. In the event of non-renewal or
other termination of this Policy, the Named Insured, under its agreements, will continue to
pay claims incurred prior to the effective time and date of such termination until all such
claims are finally closed, and the Insurer shall continue to be bound by the terms and
obligations of this Policy and shall continue to remit, on a monthly basis, such amounts as
may be due under this Policy until all liabilities of the parties are finally settled.
	 
	9.	 	In the event of the insolvency of the Named Insured, the insurance provided by this Policy
shall be payable by the Insurer on the basis of the liability of the Named Insured under this
Policy without diminution because of such insolvency, directly to the Named Insured or its
receiver, the liquidator or statutory successor. The Insurer shall be given written notice of
the pendency of each claim against the Named Insured on the contracts insured hereunder within
a reasonable time after such claim is filed in the insolvency proceeding. The Insurer shall
have the right to investigate each such claim and interpose at its own expense, in the
proceedings where such claim is to be adjudicated, any defenses which it may deem available to
the Named Insured or its receiver, liquidator or statutory successor. The expense thus
incurred by the Insurer shall be chargeable, subject to the appropriate court’s approval,
against the insolvent company as part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to the Named Insured solely as the result
of the defense undertaken by the Insurer.
	 
	10.	 	In no event shall anyone other than the Named Insured or, in the event of the Named Insured’s
insolvency, its receiver, liquidator or statutory successor, have any rights to payment from
the Insurer under this Policy.
	 
	11.	 	The Insurer, or its duly authorized representative, shall have free access at all reasonable
times during and after the term of this Policy, to books and records maintained by any of the
division, department and branch offices of the Named Insured which are involved in the subject
matter of this Policy and which pertain to the insurance provided hereunder and all claims
made in connection therewith.
	 
	 	 	Notwithstanding the provisions of the preceding paragraph, if undisputed balances due from the
Insurer under this Policy have not been paid for the two most recent reported calendar quarters,
the Insurer shall not have access to any of the Named Insured’s records relating to this Policy
without the specific consent of the Named Insured.
	 
	12.	 	Inadvertent delays, errors or omissions made in connection with this Policy or any
transaction hereunder shall not relieve either party from any liability which would have
attached had such delay, error or omission not occurred, provided always that such error or
omission is rectified as soon as possible after discovery.
	 
	13.	 	This Policy shall be construed as an honorable undertaking between the parties hereto not to
be defeated by technical legal construction or poverty of language, the true intent of this
Policy continuing and being that the Insurer, in every case to which this Policy applies,
follows the fortunes of the Named Insured.

 

 

	14.	 	As a condition precedent to any right of action hereunder, in the event of any dispute or
difference of opinion hereafter arising with respect to this Policy, it is hereby mutually
agreed that such dispute or difference of opinion shall be submitted to arbitration. One
Arbiter shall be chosen by the Named Insured, the other by the Insurer, and an Umpire shall be
chosen by two Arbiters before they enter upon arbitration, all of whom shall be active or
retired disinterested executive officers of insurance or reinsurance companies or Lloyd’s
London Underwriters. In the event that either party shall fail to choose an Arbiter within 30
days following a written request by the other party to do so, the requesting party may choose
two Arbiters who shall in turn choose an Umpire before entering upon arbitration. If the two
Arbiters fail to agree upon the selection of an Umpire within 30 days following their
appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.
	 
	 	 	Each party shall present its case to the Arbiters within 30 days following the date of
appointment of the Umpire. The Arbiters shall consider this Policy as an honorable engagement
rather than merely as a legal obligation and they are relieved of all judicial formalities and
may abstain from following the strict rules of law. The decision of the Arbiters shall be final
and binding on both parties; but failing to agree, they shall call in the Umpire and the
decision of the majority shall be final and binding upon both parties. Judgment upon the final
decision of the Arbiters may be entered in any court of competent jurisdiction.
	 
	 	 	Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with
the other the expense of the Umpire and of the arbitration. In the event that the two Arbiters
are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the
arbitration shall be equally divided between the two parties.
	 
	 	 	Any arbitration proceedings shall take place in Burlington, Vermont, unless otherwise mutually
agreed upon by the parties to this Policy. Notwithstanding the location of the arbitration, all
proceedings pursuant hereto shall be governed by the law of the state in which the Insurer has
its principal office.

In witness whereof, the Company has caused this Policy to be signed by a duly authorized
representative of the Company at Burlington, VT.

WOODLANDS INSURANCE COMPANY, INC.

          Authorized Representative

Date: December 11, 2007

By: _________________________________

        Authorized Representative

 

 

WOODLANDS INSURANCE COMPANY, INC.

DEDUCTIBLE AND SELF-INSURED RETENTION INDEMNIFICATION POLICY 

 
Endorsement No. 1

Woodlands Insurance Company, Inc.

Indemnity Policy #DED — 2007-001

	 	 	 	 	 	 	 	 	 
	Policy	 	Insurance	 	Policy Effective	 	 	 	 
	Number	 	Company	 	Dates	 	Coverage	 	Deductible
	MWC 

11890

	 	Old Republic
	 	January 1, 2007 to
January 1, 2008
	 	Workers’
Compensation
and Employers’
Liability
	 	$10MM each accident including allocated claim expense
	 
	 	 	 	 	 	 	 	 
	MWXS775

	 	Old Republic
	 	July 1, 2007 to
January 1, 2008
	 	Excess Workers’
Compensation —
West Virginia
	 	$10MM each accident including allocated claim expense
	 
	 	 	 	 	 	 	 	 
	MWZY 

57286

	 	Old Republic
	 	January 1, 2007 to
January 1, 2008
	 	General and Product
Liability
	 	$5MM each occurrence including allocated claim expense
	 
	 	 	 	 	 	 	 	 
	MWTB 

19647

	 	Old Republic
	 	January 1, 2007 to
January 1, 2008
	 	Commerical Automobile Liability
	 	$10MM each accident including allocated claim expense
	 
	 	 	 	 	 	 	 	 
	MWE 

22179

	 	Old Republic
	 	January 1, 2007 to
January 1, 2008
	 	Motor Truck Cargo
	 	$100K Any One
Occurrence

 

 

WOODLANDS INSURANCE COMPANY, INC.

DEDUCTIBLE AND SELF-INSURED RETENTION INDEMNIFICATION POLICY 

Endorsement No. 2

INSURED LOSSES RESULTING FROM ACTS OF TERRORISM 

     The federal Terrorism Risk Insurance Act of 2002 (“TRIA”) requires certain insurance companies
that offer commercial property and casualty coverage to offer coverage for certain losses resulting
from an Act of Terrorism. The Act applies to Woodlands Insurance Company, Inc. (the “Company”).

     This endorsement (the “Endorsement”) modifies the provisions of the Deductible and
Self-Insured Retention Indemnification Policy, policy number DED-2007-001, and any prior
amendments, modifications or endorsements thereto (collectively, the “Policy”). This Endorsement
provides the exclusive terms of coverage under this Policy for an Insured Loss resulting from an
Act of Terrorism, subject to the terms and conditions set forth in this Endorsement. Capitalized
terms not specifically defined in this Endorsement are defined in TRIA and the Interim Guidance and
Regulations issued by the U.S. Department of Treasury pursuant to TRIA. To the extent such terms
are also defined in the Policy, such definitions will not apply for purposes of this Endorsement
and the coverage provided herein.

Federal Compensation Payments

Subject to the terms, conditions, and limits set forth in this Endorsement and the Policy, the
Company will indemnify the Insured for 100% of Insured Losses resulting from an Act of Terrorism.

     If the Company makes payment under this Policy for an Insured Loss resulting from an Act of
Terrorism, the Company will be partially reimbursed by the United States under a formula
established by federal law. Under this formula, the United States would pay 90%-2006, 85%-2007 of
Insured Losses exceeding the statutorily established deductible paid by the Company in providing
the coverage (the “Federal Share of Compensation”).

Terms and Conditions/Exclusions

     The coverage provided under this Endorsement for Insured Losses resulting from an Act of
Terrorism is provided on the same terms, conditions, coverage limits and deductibles applicable to
other losses covered by the Policy, as stated in the Declarations, the policy form and any
endorsement thereto, but subject to the following:

	 	(i)	 	any loss must qualify as an “Insured Loss” as defined in TRIA and the interim guidance
and regulations promulgated by the U.S. Department of Treasury;
	 
	 	(ii)	 	there is no coverage for punitive damages resulting from or arising out of an Act of
Terrorism;
	 
	 	(iii)	 	the Company will pay the amount of Insured Loss equal to the Federal Share of
Compensation at such time as the Company receives payment of such amount from the U.S.
Government; and
	 
	 	(iv)	 	notwithstanding any other provision of this Policy, the Declarations, and any
endorsement or amendment thereto, the Company’s limits of liability with respect to an
Insured Loss resulting from an Act of Terrorism (both per claim and in the aggregate) will
be reduced:

 

 

	 	(A)	 	by the amount of the Federal Share of Compensation that is not paid to the
Company, for any reason whatsoever, including but not limited to the Company’s failure
to qualify for such payments due to noncompliance with any provision of TRIA; and
	 
	 	(B)	 	to the extent the Company’s liability is limited under Section 103(e)(2)(A) of
TRIA as determined by the U.S. Secretary of Treasury, with respect to total Insured
Losses exceeding $100 billion.

Premium 

There is no additional premium charge for this coverage for Insured Loss resulting from an Act of
Terrorism. The Company reserves the right to adjust the premium payable for coverage for Insured
Loss resulting from an Act of Terrorism hereunder at any renewal of this Policy.

TRIA Surcharge

     Section 103(e)(7) of TRIA allows the federal government to recoup the Federal Share of
Compensation paid to any insurance company, including the Company, from all insurance companies
subject to TRIA, through the establishment of a terrorism loss risk-spreading premium applicable to
all such insurers. Such premium will be collected by all insurers, including the Company, as a
policyholder surcharge on premium charged for a commercial property and casualty insurance policy
that is in force as of the time the terrorism loss risk-spreading premium is determined. In the
event a terrorism loss risk-spreading premium is determined during the policy period of this
Policy, it will apply to the total premium paid for all coverages under this Policy, and the
Insured agrees to timely pay the applicable surcharge according to the procedures established by
the Company consistent with TRIA and the requirements of the Secretary of the Treasury.

This endorsement, effective 12:01 A.M., Eastern Standard Time, January 1, 2007.

 
By:

    Authorized SignatureEX-10.2

Exhibit 10.2

Bottling Group Holdings

PROMISSORY NOTE

Maturity Date: ____________, 20__

Dated as of: ____________, 20__

Bottling Group Holdings, a Delaware corporation having offices at One Pepsi Way, Somers, New York
10589 (hereinafter the “Borrower”), for value received, hereby promises to pay on the Maturity Date
set forth above to the order of Bottling Group LLC, a Delaware limited liability company having
offices at One Pepsi Way, Somers, New York 10589 (hereinafter the “Lender”), the principal sum set
forth below under the heading “Balance of Loan”, and to pay interest annually on any and all
amounts until maturity at the rate shown below (computed on the basis of the actual days elapsed
and a year of 365 days) under the heading “Interest Rate” compounded and reset annually. Both
principal and interest shall be payable in lawful money of the United States at such place as the
Lender shall specify in immediately available funds. All advances and all payments hereunder shall
be recorded and endorsed by the Lender below, and a copy of the endorsed Promissory Note shall be
made available to the Borrower.

This Promissory Note is subject to prepayment in whole or in part, without penalty, at any time at
the option of the Borrower. The amount of each such prepayment, at the option of the Lender, may be
applied first to accrued interest and then to a reduction of the principal balance outstanding.

IN WITNESS WHEREOF, the Borrower caused this Promissory Note to be duly executed in its corporate
name as of the ______ day of ____________, 20__ by one of its officers hereunder duly authorized.

Bottling Group Holdings

 
By:

Title:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	Principal Paid	 	 	 	 	 	 
	Date	 	Advance	 	or Prepaid	 	Interest Rate	 	Balance of Loan	 	Reference
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	[#]
	 	[#]
	 	[#]%
	 	[#]
	 	[#]
	 
	 	 	 	 	 	 	 	 	 	 	 
	Subtotal:
	 	[#]
	 	[#]
	 	 	 	[#]

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