Document:

MANAGEMENT AGREEMENT

 Exhibit 10.1 
  
 MANAGEMENT AGREEMENT 
  
 This Management Agreement (“Agreement”) made and entered into this 1st day of June, 2004, by and among CCBCC Operations, LLC (“Manager”), a Delaware limited liability company and a wholly-owned entity of
Coca-Cola Bottling Co. Consolidated and South Atlantic Canners, Inc., a South Carolina corporation (“SAC”). 
  
 W I T N E S S E T H: 
  
 Pursuant to a management agreement dated August 1, 1994 (the “Original Agreement”), SAC retained the parent of Manager for the purpose of
managing its day-to-day operations, as is more fully described in the Original Agreement. SAC’s Bylaws allow the SAC Board to assign some or all of the management responsibilities for SAC to a person or organization other than the officers of
SAC. The parent of Manager has demonstrated managerial expertise, knowledge of the industry, access to certain raw materials, and other capabilities, which have been beneficial to SAC and its membership. 
  
 The Original Agreement expires by its terms on its tenth anniversary. This
Agreement serves as an extension of the Original Agreement (with the substitution of Manager for its parent) pursuant to which Manager will supervise day-to-day operations, without material interference from the SAC Board of Directors (“SAC
Board”), although the SAC Board will generally perform the typical board functions of supervising the performance of management and establishing policy for SAC. The parties recognize, however, that the SAC Board has a legal obligation to
SAC and its membership to oversee and direct the operations of SAC, and nothing contained in this Agreement shall remove from the SAC Board its obligations or ability to direct the business and affairs of SAC. It is anticipated that a smooth working
relationship will be established through the adoption each year of an annual business plan (“Annual Business Plan”), under which Manager can perform its responsibilities as described herein. 
  
 The parties believe that the efficiencies to be derived from Manager’s
supervisory capabilities and the additional purchasing volume Manager (and its subsidiaries and affiliates) bring to SAC in their various capacities (including as a member) will prove to be beneficial to SAC’s membership in general. 

 NOW, THEREFORE, in consideration of the mutual promises, obligations and agreements contained
herein, the parties hereto, intending to be legally bound, do hereby agree as follows: 
  
 Section 1. Definitions. 
  
 1.01 Defined Terms. The following terms shall have the meanings set forth in the Section of this Agreement indicated below: 
  

			
	 Defined Term

	  	 Section

	 Agreement
	  	Preamble
	 Annual Business Plan
	  	Preamble
	 Claimant
	  	Section 10.03(a)
	 Claim
	  	Section 10.02.
	 CPI
	  	Section 6.01
	 SAC Bank Account
	  	Section 6.03(d)
	 Disclosing Party
	  	Section 9.04
	 Effective Date
	  	Section 8.01
	 Environmental Manager
	  	Section 3.01(c)(4)
	 Environmental Laws
	  	Section 3.01(c) (4) (i)
	 Expansion
	  	Section 3.01(c)(3)
	 Facility
	  	Section 2.01
	 FICA
	  	Section 3.02
	 FUTA
	  	Section 3.02
	 Indemnitee
	  	Section 10.02
	 Losses
	  	Section 10.02
	 Manager
	  	Preamble
	 Manager’s Corporate Offices
	  	Section 3.01
	 Manager Employee (s)
	  	Section 3.01(c)(2)
	 Management Fee
	  	Section 6-01
	 Notified Party
	  	Section 10.03(a)
	 Original Agreement
	  	Preamble
	 Physical Case
	  	Section 6.01
	 Proposed Budget
	  	Section 3.01(a)(2)
	 Receiving Party
	  	Section 9.04
	 Reimbursable Expenses
	  	Section 6.02
	 Rules
	  	Section 10.02
	 SAC
	  	Preamble
	 SAC Board
	  	Preamble
	 SAC Business
	  	Section 2.01
	 SAC Employee(s)
	  	Section 3.01(c)(2)
	 SAC Executive Committee
	  	Section 3.01(a)(5)
	 Summary of Major Operational and Business Items
	  	Section 3.01(a)(2)
	 Term
	  	Section 8.02

  
 Section 2.
Appointment of Manager. 
  
 2.01 Appointment of and
Acceptance by Manager. SAC hereby appoints and retains Manager for the purpose of managing SAC’s canning, bottling, and other soft drink packaging operations (the “SAC Business”), effective as of the Effective Date, and
authorizes Manager to supervise, direct and control the day-to-day operation of the SAC Business at 601 Cousar Street, Bishopville, South Carolina (the “Facility”) in accordance with this Agreement. In the appointment of Manager to
handle day-to-day operations hereunder, both SAC and Manager understand and agree that the business and affairs of SAC shall be under the direction and 
  

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 control of the SAC Board, and Manager agrees to carry out the policies and directives of the SAC Board. Manager hereby
accepts this appointment and agrees to perform its duties in accordance with this Agreement. 
  
 2.02 Standards of Performance. In providing services under this Agreement, Manager shall give the care and attention to its responsibilities that a reasonable business manager in its position would be expected
to give. Manager agrees to provide and employ a sufficient number of personnel with adequate training and experience to perform such duties competently and in a businesslike manner in such a way as to cause the operations of SAC to be carried on
efficiently and in the best interests of SAC. In its capacity as Manager under this Agreement, Manager shall perform its duties in good faith, and shall loyally seek to promote the best interests of SAC. Manager shall perform in a timely and
cooperative manner. 
  
 2.03 Non-exclusive Service. It is
understood and agreed that nothing in this Agreement shall confer upon SAC an exclusive right to Manager’s service. Manager may contract with others for the provision of expertise and services similar to those to be provided to SAC as
contemplated herein. 
  
 2.04 Services to be Performed by
SAC’s Officers and Others. SAC will continue to have as corporate officers a President, a Secretary and such other officers as may be determined by the SAC Board, who shall perform such functions as the SAC Board may assign to them. Nothing
in this Agreement shall prevent SAC from obtaining services from others which are not assigned to Manager under Sections 3 and 4 of this Agreement. 
  
 Section 3. Services and Responsibilities of Manager. 
  
 3.01 Primary Services and Responsibilities. Within the scope of the authority granted to it under this Agreement and
subject to any limitations provided herein, Manager will undertake to manage SAC in a manner such that it may meet its operating requirements. It is agreed by SAC that Manager may perform the services and functions required of it hereunder (in whole
or in part) at Manager’s corporate offices located at 4115 Coca-Cola Plaza, Charlotte, North Carolina (“Manager’s Corporate Offices”). Manager is hereby authorized to and shall provide the following services or cause the
following services to be performed: 
  
 (a) Annual Business
Plan. Manager will develop an Annual Business Plan, based on its business judgment, to be adopted by the SAC Board prior to the beginning of each fiscal year, with such changes as the SAC Board deems necessary. 
  
 (1) Adoption. Manager will present the proposed plan to the SAC
Board no later than thirty (30) days prior to the beginning of SAC’s fiscal year that is the subject of such projections. 
  
 (2) General Contents. Manager’s proposed Annual Business Plan will contain a proposed annual budget (“Proposed
Budget”), a summary of major operational and financial items (“Summary of Major Operational and Business Items”) projected for the year in sufficient detail for the SAC Board to determine the nature and extent of proposed
operations, an estimate of the Management Fee and Reimbursable Expenses SAC will be asked to pay to Manager for the year, and such other items as the SAC Board may request. 
  

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 (3) Projections, Developments, and Anticipated Events. The Proposed Budget will contain (i)
annual projections of volumes, (ii) recommended pricing based on an estimated cost-plus margin authorized by the SAC Board, (iii) estimated operating revenues based upon pricing, (iv) required capital expenditures, (v) operating expenses and (vi)
cash flow. The presentation of items will show a breakdown of each item for each of SAC’s operating allocation units (cans, bottles, etc.). The Summary of Major Operational and Business Items will include (a) a description of proposed
activities in areas for which Manager has operational responsibility under Section 3.01(c), (b) a description of significant developments relating to the business and financial, items for which Manager has responsibility under Section 3.01(b), and
(c) a description of other major operational and business, items, if any, which Manager reasonably anticipates for the upcoming year. 
  
 (4) Effect of Not Adopting Business Plan Prior to the Commencement of the Fiscal Year. If the SAC Board has not adopted an Annual Business
Plan prior to the commencement of any fiscal year, Manager shall continue to provide management functions for SAC based upon the most recently adopted Annual Business Plan, until such time as a new Annual Business Plan is adopted and takes effect
for such fiscal year; provided, however, that (i) any CPI increases that will be due as part of the Management Fee under Section 6.01 for the new fiscal year and (ii) any previously approved increase in a normal, recurring operating expense (such
as, personnel compensation) since the adoption of the most recent Annual Business Plan will take effect with the beginning of such year. 
  
 (5) Performance of Services Under the Annual Business Plan and Deviations Therefrom. In performing its services under this Agreement,
Manager shall follow the Annual Business Plan adopted for the fiscal year, unless otherwise directed by the SAC Board. If Manager encounters a business situation which will require it to deviate from the Annual Business Plan or it discovers that it
or SAC has inadvertently deviated from the plan, it shall immediately consult with the Executive Committee of the SAC Board (“SAC Executive Committee”) about the situation and obtain approval for such deviation. If approval is given
by the SAC Executive Committee, Manager shall be allowed to continue with such deviation until the next meeting of the SAC Board at which time the SAC Board can consider the matter. If the SAC Executive Committee does not approve of the deviation,
the matter will immediately be brought to the attention of the SAC Board. Notwithstanding the foregoing, Manager is authorized to incur expenses beyond those provided in the Annual Business Plan in order to meet the production requests of SAC
members; provided, however, that such expenses shall be in line with the budgeted per-case rate. 
  
 (b) Business/Finance. Manager will be responsible for accounting, tax, treasury and internal policy auditing services in connection with the
financial management of the SAC Business. 
  
 (1) Contracts. Manager shall have the right to enter into contracts in the ordinary course of business in accordance with the Annual Business Plan and thereby bind SAC; provided, however, that the SAC Board may set size
limitations above which approval of the SAC Board is required. Any approved contracts whose terms extend beyond the current year will be included automatically in future Annual Business Plans. 
  

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 (2) Treasury Management. Manager will provide necessary treasury management
services for SAC including the arrangement and administration of financings (subject to SAC Board approval) and bank transactions and cash management services including receipt of and responsibility for all income realized by SAC and disbursement of
funds for satisfaction of the debts, obligations and expenses of SAC and for distributions of patronage dividends as determined by the SAC Board. 
  
 (3) Accounting. Manager will maintain accounting systems and records for SAC which shall be sufficiently separate from
Manager’s other accounts for the SAC Board to have full access to its accounts without raising questions about the confidentiality of Manager’s files. Manager shall provide the following functions or prepare the following reports:

  
 (i) Accounts receivable, credit and
collections including credit approval, billing, collection and cash application, as necessary. 
  
 (ii) Accounts payable functions including check writing and accounting for paid expense and capital items. 
  
 (iii) General accounting functions including maintenance of
general ledger and monthly financial reporting to the SAC Board. 
  
 (iv) Fixed asset record maintenance and accounting. 
  
 (v) Annual budgets. 
  
 (vi) Monthly reports to the SAC Board (i) comparing actual operating and capital expenditures to those budgeted and set forth in the
Annual Business Plan, (ii) detailing significant management actions taken by Manager, and (iii) such other matters as the SAC Board may request. 
  
 (4) Taxes. Manager shall handle the federal, state and local tax reporting and filing as well as the implementation of tax
planning strategies relating to federal, state and local taxes and user fees. Manager will also handle any required tax audits and maintain all Department of Transportation files and furnish copies of federal income tax returns to the SAC Executive
Committee prior to the filing of such returns. 
  
 (5) Internal Policy Audit. Manager will provide internal auditing services for monitoring compliance with SAC policies and procedures as Manager deems necessary. 
  

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 (c) Operations. The major operational responsibilities of Manager shall be in the areas of
Manufacturing and Purchasing; Human Resources; Fleet, Transportation and Facility Administration; Environmental Services; Data Processing and Risk Management as follows: 
  
 (1) Manufacturing and Purchasing. Manager will oversee the manufacturing of products which
meet franchise company specifications and will deliver all products within reasonable age standards as established by the SAC Board. The initial product age and quality standards to be met by Manager are described in Exhibit A hereto.
Manager will select and negotiate with vendors and purchase or, if in the best interest of SAC, lease on SAC’s behalf all capital equipment from such vendors. If Manager selects itself as a vendor or lessor to SAC under this paragraph (or
handles procurement through an entity in which Manager or its parent or subsidiaries or affiliates, own an equity interest), this arrangement must be disclosed to and approved by the SAC Board. Manager will, on behalf of SAC, procure all raw
materials, supplies, utilities and services which are required for or incidental to, the operations of the SAC Business and may do so through such procurement channels and entities as it deems advisable. Manager will use its best efforts to make
such procurement on a basis similar to that which is available to Manager; provided, however, that both Manager and SAC hereby acknowledge that differences may arise with respect to procurement channels, prices of concentrates and syrup or as a
result of different specifications, sources of supply and freight costs. 
  
 (2) Human Resources. 
  
 (i) Manager shall have responsibility for supervising employees of SAC (“SAC Employees”) and any employees of Manager (or of Manager’s subsidiaries or affiliates performing services hereunder)
providing services for SAC (“Manager Employees”) under this Agreement. All such management and supervision by Manager for personnel at the Facility shall be within the parameters established in the Annual Business Plan. Manager
shall provide overall pay and benefit administration for SAC Employees (if any) and Manager Employees in accordance with the Annual Business Plan. Any necessary labor contract negotiations will be performed by Manager, and Manager will handle the
administration of any labor contract (including grievance procedures and arbitration) and any labor relations disputes or other labor matters, and the SAC Board will be advised thereof. Manager will have the authority and responsibility to enter
into, amend or terminate any personnel agreements and consulting and agency agreements relating to SAC; provided, however, that the SAC Board shall determine who shall perform professional accounting and legal services for SAC and set the terms for
their employment. To the extent permitted by the Annual Business Plan or otherwise approved by the SAC Board, Manager may supplement SAC with additional Manager Employees. For such purpose, Manager may utilize its employees or employees of a wholly
owned subsidiary or affiliate of Manager which have adequate training and experience to perform their duties competently and in a businesslike manner. Manager shall have the authority to select, retain and dismiss all personnel performing services
for SAC, whether they be SAC Employees or Manager Employees. Manager shall also have the right to substitute personnel for a Manager Employee whenever Manager deems such substitution appropriate. Each Manager Employee and SAC Employee shall be
subject to all of Manager’s applicable personnel policies 
  

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 and practices (unless otherwise restricted by union contracts), and SAC shall not have the right to
subject any Manager Employees or SAC Employees to any additional employment policies or practices or other work related rules or regulations (except rules and regulations reasonably related to the health and safety of such personnel or required
under applicable law) absent Manager’s express consent to such action which shall not be unreasonably withheld. Manager shall provide substantially the same job-related education and training to Manager Employees and SAC Employees as Manager
provides to its other personnel who perform the same or related tasks, and SAC shall reimburse Manager for the cost of the job related education and training provided by third parties to SAC Employees and Manager Employees. Manager shall compensate
Manager Employees in accordance with Manager’s standard compensation policies and practices for personnel who perform the same or related tasks, subject to regional pay differences. Manager Employees shall be provided with personnel benefits no
more favorable as a whole than those provided to Manager’s other personnel performing the same or related tasks in addition to workers’ compensation, unemployment compensation and all other benefits required to be provided for its
personnel under applicable law. Manager will adopt and enforce Manager’s Code of Business Conduct at the Facility. 
  
 (ii) In the event this Agreement is terminated or expires (without extension), all Manager Employees employed at the Facility at such time
shall have the opportunity to be considered for employment by SAC as SAC Employees. SAC shall be entitled to approach all such persons and discuss future employment with SAC, and Manager shall not attempt to retain or continue such persons in its
employment until they have first rejected an offer of employment with SAC or otherwise been informed by SAC that they will not be offered employment. 
  
 (3) Fleet, Transportation and Facility Administration. Manager will provide overall administration of fleet activities
including assessment of required fleet expansion or replacement, acquisition of required equipment and direction of preventative maintenance programs in accordance with the Annual Business Plan. Manager will be responsible for the administration of
all transportation activities including the receipt of raw materials by or on behalf of SAC and the delivery of full goods to SAC members. Manager will also provide for the administration of all facility activities including preventive and
corrective maintenance and expansion. 
  
 (4)
Environmental Services. Manager shall provide environmental management services sufficient to determine whether SAC operations at the Facility are in compliance with the requirements of applicable environmental laws, regulations,
statutes, ordinances and permit conditions (“Environmental Laws”). Any known or suspected exceptions to environmental compliance requirements shall be reported immediately to the SAC Executive Committee, along with a recommendation
for a compliance plan. 
  

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 (5) Data Processing. Manager shall utilize its computer systems to provide
computer services required to carry out its responsibilities under this Agreement. 
  
 (6) Risk Management. Manager shall contract for the purchase of insurance policies on behalf of SAC at coverage levels and
from carriers as determined, from time to time, by the SAC Board, based on recommendations from Manager. Such policies shall name Manager as an additional insured and shall require that Manager be notified at least thirty (30) days prior to any
modification or cancellation of any policy. The initial policies and coverage are listed on Exhibit G hereto. SAC agrees that it will cause its officers to execute all documents and certificates necessary to implement those policies
and coverages and will take any and all actions required to keep the same in full force and effect throughout the Term (amended, from time to time). 
  
 3.02 Manager’s Personnel. All Manager Employees providing services hereunder shall be exclusively employed by Manager or its subsidiaries or
affiliates, and Manager shall have the sole right to determine their conditions of service, working hours, personnel and vacation policies, seniority, promotions and assignments. Manager shall have the exclusive right to retain and remove any such
personnel and shall comply with all the laws applicable to such personnel. Subject to the provisions of Section 6 below, Manager shall be solely responsible for the compensation of the personnel and for arranging all withholding taxes, Federal
Insurance Contributions Act (“FICA”) and Federal Unemployment Tax Act (“FUTA”) taxes, unemployment, insurance, workmen’s compensation and any other insurance and fringe benefits with respect to such personnel.

  
 3.03 Accounts, Books and Records. 
  
 (1) Manager shall maintain separate accounts, books, and records for SAC
with respect to services under Sections 3 and 4 of this Agreement, and these accounts, books and records shall be the property of SAC. Manager shall be responsible for maintaining SAC’s accounts, books and records in good order and shall
maintain them in a way that is sufficiently separate from Manager’s own records so that SAC may have access to such documents during regular business hours upon request without raising an issue of confidentiality with respect to Manager’s
proprietary information. In the event this Agreement is terminated for any reason or expires, Manager, shall return all of SAC’s accounts, books and records in its possession to SAC as provided in Section 8.05. 
  
 (2) Manager shall make such of Manager’s books and records that relate
to the SAC Business, including the pricing of raw materials to the extent such information relates to the SAC Business, available to independent auditors selected by the SAC Board, or such other person or persons who are mutually acceptable to the
parties, as is necessary to audit the Management Fee and Expenses charged to SAC and Manager’s compliance with its obligations under this Agreement. Such auditors or person(s) shall be bound by a confidentiality agreement not to disclose such
information to persons outside SAC or its professional advisors. SAC shall bear the costs of any independent accounting firm engaged by it for the purpose of performing the review described in this paragraph. 
  

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 3.04 Attendance at Meetings of SAC Board and SAC Executive Committee. 
  
 (1) Manager will attend all regularly scheduled meetings of the SAC Board
and all special meetings of the SAC Board at which its attendance is requested as long as Manager has been given reasonable notice of the time and place of the special meeting. At regularly scheduled meetings of the SAC Board, Manager will present a
detailed report on operations, including any deviations from the Annual Business Plan, and Manager shall advise the SAC Board of deviations from the Annual Business Plan which it reasonably anticipates in the future. At special meetings of the SAC
Board, Manager shall provide such information with respect to the management of SAC as may be reasonably requested by the SAC Board. 
  
 (2) It is anticipated that the SAC Executive Committee will meet from time to time, as required. If requested by the SAC Executive Committee, Manager
shall attend meetings of the SAC Executive Committee and provide a verbal report on operations and such other information as may be requested by the SAC Executive Committee. 
  
 Section 4. Additional Services Provided by Manager. 
  
 Manager shall also perform other management functions relating to the SAC
Business as may be requested from time to time by the SAC Board and agreed to by Manager, provided that the parties can agree upon a price for such services. If additional services are requested under this Section, Manager agrees to offer SAC a
price or fees (excluding applicable taxes and transportation costs, which shall be charged to SAC at cost) for such services which is no less favorable than those charged by Manager to other entities of a similar size and location; provided,
however, that under no circumstances shall Manager charge SAC an amount which is less than Manager’s actual cost. If SAC and Manager cannot agree on a price for additional services under this Section, SAC shall be free to obtain such services
from others. 
  
 Section 5. Board Functions.
In addition to SAC Board’s general responsibilities of directing the business and affairs of the organization and approving the Annual Business Plan, the responsibilities of the SAC Board will include, but not be limited to, supervising the
performance of SAC in accordance with the Annual Business Plan, establishing capital requirements for its members, reviewing and approving long-term business plans, approving major financial undertakings, and supervising the performance of Manager
under this Agreement. It will be the SAC Board’s responsibility to assure that all costs are fairly allocated (as determined by the Board) to the various products produced at SAC. Product pricing and rebates will be at the discretion of the SAC
Board. 
  
 Section 6. SAC Payments.

  
 6.01 Management Fee. In consideration for
the services to be provided by Manager pursuant to this Agreement, SAC shall pay to Manager a management services fee equal to $0.1806 per physical case of bottles and cans, and $0.1806 per unit of post mix bag-in-a-box as described in Exhibit
B hereto (each such case or unit quantity of bottles, cans, or post-mix as described in Exhibit B being herein referred to for purposes hereof as “Physical Case/Unit”) manufactured by SAC from and after the
Effective Date (the “Management Fee”). No Management Fee shall be paid on shipments of bulk syrup. Subject to the provisions of Section 
  

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 8.02, the Management Fee shall be increased effective as of the beginning of each fiscal year hereunder in accordance
with the increase in the urban Wage Earners and Clerical Workers-South-ALL Items consumer price index published by the U.S. Department of Labor (“CPI”) for the most recent twelve (12) month period for which statistics are available
on January 1 of each year; provided, however that the Management Fee shall not exceed 25¢ per Physical Case/Unit during the Term of this Agreement. 
  
 6.02 Reimbursable Expenses. With respect to payments made by Manager from Manager’s separate funds, SAC shall reimburse Manager for personnel
costs incurred at the Facility and other charges for specific materials or service at the Facility as well as third party fees as long as such costs and charges are within the ranges established in the Annual Business Plan, or otherwise approved, by
the SAC Board (“Reimbursable Expenses”) 
  
 (a) No Reimbursable Expense other than those described in the Annual Business Plan shall be payable by SAC unless such expense is (1) less than $25,000, or (2) otherwise approved by the SAC Board or Executive Committee; provided,
however, that the parties hereto recognize that ordinary operating expenses of the SAC Business paid by Manager on SAC’s behalf that exceed amounts budgeted in the Annual Business Plan as a result of an increase in the sales volume shall be
reimbursable to the extent such amounts are reasonably incurred. 
  
 (b) Manager shall be responsible for administrative costs it incurs to provide managerial services under this Agreement to the extent such services are not performed at the Facility. All functions that are currently being performed
by Manager’s personnel based at Manager’s Corporate Offices will not be considered to be performed at the Facility and will be covered by the Management Fee. These functions are listed in Exhibit D. Manager may not shift
functions or personnel to the Facility without approval of the SAC Board. Reimbursable Expenses will be included in the Annual Business Plan and are subject to audit at least annually at the request of SAC as provided in Section 3.03 hereof.

  
 (c) The following expenses are examples of direct
expenses of SAC to be paid by SAC as provided in the Annual Business Plan or otherwise approved by the Board of Directors. In the event Manager pays direct expenses of this type on SAC’s behalf, such expenses shall be Reimbursable Expenses to
Manager, if the expenses are within the Annual Business Plan or are approved by the SAC Board or SAC Executive Committee: 
  
 (1) Entity and On Site Expenses. SAC will incur direct expenses related to its form of entity or the SAC Business in the form of fees or taxes to
third parties such as federal, state and local governments. In addition, SAC (or Manager on behalf of SAC) will incur certain expenses directly related to the routine operation of the Facility including the cost of On Site Employees of SAC or
Manager. “On Site Employees” shall include all direct and indirect labor as well as management and administrative personnel based at the Facility whether such personnel are Manager Employees or SAC Employees. Examples of such
expenses are set forth on Exhibit C. 
  

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 (2) Miscellaneous Expense. Other reasonable and necessary expenses directly related to SAC’s
business operations or administration thereof which are set forth on Exhibit E. 
  
 6.03 Payments and Reimbursement. 
  
 (a) Management Fee Payments. Subject to the provisions of Section 8.01 hereof, the Management Fee, as determined from the Annual Business Plan shall be paid to Manager in a timely manner. 
  
 (b) Reimbursement of Expenses. SAC shall reimburse the Manager for all
Reimbursable Expenses promptly. The Manager will provide SAC monthly with a detailed invoice for all expenses reimbursable under this Section 6.03(b). All such invoices shall be due and payable upon receipt thereof. 
  
 (c) SAC Bank Account/Check Signing Authority. 
  
 (1) The Manager will administer a separate bank account on behalf of SAC
(“SAC Bank Account”) into which sales revenue and all other monies of SAC shall be deposited and from which expenses and fees of and distributions from SAC shall be paid. The Manager shall be responsible for maintaining and
administering the SAC Bank Account in accordance with this Agreement. With the consent of the SAC Board, Manager may change the financial institution in which the SAC Back Account is held or the branch location of the account. 
  
 (2) Within limitations established by the SAC Board, the Manager shall be
authorized to sign all checks and drafts and execute all wire transfers for disbursements in satisfaction of all debts, obligations and expenses of SAC and the countersignature of another person shall not be required. 
  
 6.04 Management Fee Distinguished from Distributions. All fees and
other payments paid by SAC to Manager under this Section 6 shall be treated as expenses of SAC and not part of a patronage distribution paid to Manager by SAC. 
  

Section 7. Obligations of SAC. 
  
 7.01 Duties of SAC. To facilitate the performance of manager’s services, SAC agrees to provide the following: 
  
 (a) to the extent approved by the SAC Board in the Annual Business
Plan, provide or cause to be provided at no charge to Manager sufficient secure building space, furniture, facilities and office equipment to enable Manager’s on site personnel to carry out their obligations under this Agreement; 
  
 (b) assist Manager in obtaining, or cause to be obtained, any permits,
applications, authorizations or forms required by or from the federal, state or local governments for the specific services areas; 
  

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 (c) afford Manager’s personnel unlimited and unrestricted access to all areas of the
Facility; 
  
 (d) cooperate with Manager and direct all SAC
personnel (if any) to extend maximum cooperation to Manager in accordance with this Agreement; 
  
 (e) use its best efforts to support Manager’s requests to SAC members for their estimates of annual volume requirements by brand and package for planning purposes each year and for use in preparing annual
budgets; 
  
 (f) use its best efforts to support
Manager’s request to SAC members to provide product orders to Manager in a manner and within time parameters reasonably requested by Manager; and 
  
 (g) if approved by the SAC Board, maintain a revolving line of credit or other financing sufficient in the reasonable judgment of SAC to satisfy
SAC’s working capital needs. 
  
 In addition, SAC agrees that
it will cause the SAC Board or its designee to consider approval of any capital expenditure requiring approval, not otherwise set forth in the Annual Business Plan, no later than fifteen (15) Business Days after receipt of written request for
approval from Manager. 
  
 Section 8. Term

  
 8.01 Effective Date. This Agreement shall become
effective on June 30, 2004 (the “Effective Date”), the Original Agreement having expired by its terms. 
  
 8.02 Duration. Unless terminated pursuant to Section 8.03 below, this Agreement shall continue in full force and effect for a term of ten (10)
years following the Effective Date (the “Term”). The parties anticipate that they will negotiate an extension of this Agreement during the tenth (10th) year of the Term but acknowledge that neither party shall be bound by the
provisions of this Agreement beyond the Term. 
  
 8.03 Early
Termination. This Agreement shall terminate early as follows: 
  
 (a) Breach by Manager. 
  
 (1) If at any time
Manager shall default in the performance of any of its obligations under this Agreement or otherwise fails to comply in all material respects with policies and directives of the SAC Board, and such default or breach shall continue for a period of
ninety (90) days after SAC has given notice to Manager specifying such default or breach and requiring it to be remedied, then SAC shall have the right to terminate this Agreement, provided that SAC has determined in its reasonable business judgment
that an alternative manager could have met the performance requirements during the period of manager’s noncompliance, and further provided that the SAC Board requires similar performance requirements of the management its selects to replace
Manager. 
  

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 (2) During the Term, Manager (or its parent or its subsidiaries or affiliates) will maintain membership
in SAC and a purchase agreement relationship with SAC for volume levels outlined on Exhibit F. If such membership is discontinued or such membership requirements in SAC are not met, SAC may terminate this Agreement. If such purchase
requirements for any year are not met (or if it would be clear to a reasonable business person that the same cannot or will not be met for a particular year), SAC may terminate this Agreement. 
  
 (3) If the Agreement is terminated under Section 8.03(a), Manager agrees to
continue to provide services pursuant to the terms described herein for a reasonable transition period following termination by SAC, if SAC so requests. 
  
 (b) Breach by SAC. If at any time SAC shall default in the performance of any of its material obligations under this Agreement and such default or
breach shall continue for a period of ninety (90) days after Manager has given notice to SAC specifying such default or breach and requiring it to be remedied, then Manager shall have the right to terminate this Agreement. If the Agreement is
terminated under this paragraph, Manager agrees to continue to provide services pursuant to the terms described herein for a reasonable transition period following termination by Manager, if SAC so requests. 
  
 (c) Bankruptcy Decree. If a decree or order of a court having
jurisdiction has been entered adjudicating a party bankrupt, insolvent, or approving a petition seeking reorganization of such party under any bankruptcy act or any similar applicable law, and such decree or order has continued undischarged or
unstayed for a period of sixty (60) days; or a decree or order of court having jurisdiction for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of such party or all or substantially all of its property,
or for the winding up or liquidation of its affiliates, has been entered, and such decree or order has remained in force undischarged or unstayed for a period of sixty (60) days, then the other party shall have the right to terminate this Agreement
by giving the first mentioned party notice to that effect within thirty (30) days after the expiration of such sixty-day period. 
  
 (d) Institution of Bankruptcy Proceedings. If a party institutes proceedings to be adjudicated voluntarily bankrupt or consents to the filing of
bankruptcy proceedings against it, or files a petition for answer or consent seeking reorganization under any bankruptcy act or similar law or consents to the filing of any petition or consents to the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of it, or all or substantially all of its property, or makes a general assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due, then the
other party shall have the right to terminate this Agreement by giving the first mentioned party notice to that effect within thirty (30) days after the occurrence of such event. 
  
 8.04 Effect of Termination. Upon the termination of this Agreement, this Agreement shall be of no further force and
effect, except that the provisions Section 8, 9, 10, and 11 shall continue in full force and effect indefinitely. Upon the termination of this Agreement, SAC shall immediately pay Manager the balance of the Management Fee accrued hereunder to the
date of termination and all reimbursable expenses payable to Manager hereunder. Upon termination 
  

 13 

 or expiration of this Agreement, Manager, shall immediately return to SAC all of SAC’s accounts, books and records
in Manager’s possession as well as any other property belonging to SAC, and Manager shall remove all Manager Employees from the Facility and leave the Facility in good order, unless Manager has been requested by SAC to continue to provide
services during a reasonable transition period under Sections 8.03(a) or 8.03(b) of this Agreement, in which case Manager shall return SAC’s property and leave the premises in good order at the, end of the transition period. 
  
 Section 9. Confidentiality. 
  
 9.01 Confidential Information. The parties acknowledge that each of
them may be required to disclose Confidential Information to government agencies or authorities by law, upon the advice of counsel, and each shall endeavor to limit disclosure to that purpose. Each Party will give the other prior written notice of
any disclosure pursuant to this paragraph, which notice shall specify the substance of any such disclosure. 
  
 9.02 Identification. Each party hereto will take appropriate steps to enable the other party hereto to identify the information that should be
protected as Confidential Information. Accordingly, each party shall legend or otherwise designate as proprietary any material furnished to the other party which it believes to be Confidential Information. In addition, any Confidential Information
that is imparted orally shall be identified as proprietary. Information that is not so identified shall not be considered Confidential Information. Also, information that is generally known or that has been disclosed to a third party by the party
claiming confidentiality shall not be considered Confidential Information for purposes of this Agreement. 
  
 9.03 Acknowledgment of Confidential Information. Each party recognizes and acknowledges (a) that Confidential Information of the other party may be
commercially valuable proprietary products of such party, the design and development of which may have involved the expenditure of substantial amounts of money and the use of skilled development experts over a long period of time and which afford
such party a commercial advantage over its competitors; (b) that the loss of this competitive advantage due to unauthorized disclosure or use of Confidential Information of such party may, cause great injury and harm to such party; (c) that the
restrictions imposed upon the parties under this Agreement are necessary to protect the secrecy of Confidential Information and to prevent the occurrence of such injury and harm. 
  
 9.04 Nondisclosure. Each party who receives Confidential Information hereunder (the “Receiving
Party”) agrees that it will not, without the prior written consent of the party from whom such Confidential Information was obtained (the “Disclosing Party”), disclose, divulge or permit any unauthorized person to obtain
any Confidential Information disclosed by the Disclosing Party (whether or not such Confidential Information is in written or tangible form) for as long as the pertinent information or data remain Confidential Information. The Receiving Party hereby
agrees to indemnify and hold harmless the Disclosing Party from and against any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys’ fees and expenses)
arising from any such unauthorized disclosure by the Receiving Party or its personnel. The Receiving Party agrees that it will use any Confidential Information disclosed by the Disclosing Party hereunder 
  

 14 

 (whether or not such Confidential Information is in written or tangible form) only for purposes of the business of SAC,
for as long as the pertinent information or data remain Confidential Information. The Receiving Party hereby agrees to indemnify, defend and hold harmless the Disclosing Party from and against any Loss arising from any such unauthorized disclosure
by the Receiving Party or its personnel. 
  
 9.05 Security.
To protect the Confidential Information of the parties, each party shall adopt basic security measures of the kind commonly observed in industries in the United States of America that rely extensively on proprietary information. Security
measures, to the extent appropriate, shall include physical security measures, restrictions on access by unauthorized personnel, use of confidentiality agreements with personnel, legending, systematic segregation, and appropriate record retention
systems. 
  
 Section 10. Manager’s Liability and
Indemnification. 
  
 10.01 Limitation on Liability.
Manager shall not be responsible for any errors in judgment made in good faith in the performance of its duties hereunder; provided, however, that nothing contained herein shall release Manager of any responsibility it may have for claims based
on the gross negligence or willful misconduct of Manager. 
  
 10.02 Indemnification. To the extent agents of SAC are entitled to indemnification in SAC’s Bylaws, SAC shall indemnify and hold Manager and its parent, subsidiaries, affiliates, directors, officers, employees and agents (each
an “Indemnitee”) harmless from any and all liabilities, losses, damages, suits, judgments, fines, demands and expenses (“Losses”) arising in connection with the SAC Business (a “Claim”); provided,
however, that any such Losses arising out of Manager’s material breach of this Agreement, gross negligence, fraud or willful misconduct shall be the responsibility of Manager and Manager shall be liable to and indemnify SAC from and against any
Losses incurred by SAC as a result thereof. 
  
 10.03 Indemnity
Procedure for Third Party Claims. The obligations and liabilities of SAC to indemnify an Indemnitee or Manager to indemnify SAC, as applicable, for third party claims (including those by Manager Employees) under this section 10 shall be subject
to the following terms and conditions: 
  
 (a) The person
or entity (i.e., SAC, Manager or Indemnitee) making a claim (“Claimant”) will give the party from whom indemnity is sought (“Notified Party”) prompt notice of such Claim. The failure to promptly notify a party of
any such Claim shall not relieve the party of its obligation hereunder, unless the failure to so notify such party materially prejudices such party’s ability to defend such Claim. 
  
 (b) Following notice by the Claimant to the Notified Party of a Claim, the Notified Party shall be entitled at its
cost and expense to contest and defend such Claim by all appropriate legal proceedings; provided, however, that notice of the intention so to contest shall be delivered by the Notified Party to the Claimant within thirty (30) days from the date of
receipt by the Notified Party of notice from the Claimant of the assertion of such Claim. Any such contest may be conducted in the name and on behalf of the Notified Party or the Claimant, as may be appropriate. Such contest shall be conducted
diligently by reputable counsel 
  

 15 

 employed by the Notified Party, but the Notified Party shall keep the Claimant fully informed with respect to such Claim
and the contest thereof and the Claimant shall have the right to engage its own counsel at its own expense. If the Claimant joins in any such contest, the Notified Party shall have full authority, in consultation with the Claimant, to determine all
action to be taken with respect thereto provided, however, that in no event shall the Notified Party have authority to agree to any relief other than the payment of money damages by the Claimant unless agreed to by the Claimant. Each party shall
bear its own expense of such representation. If any Claim is asserted and the Notified Party fails to contest and defend such Claim within a reasonable period of time, the Claimant may take such action in connection therewith as the Claimant deems
necessary or desirable, including retention of counsel, and the Claimant shall be entitled to indemnification of the costs incurred in connection with such defense. 
  
 (c) If requested by the Notified Party, the Claimant shall cooperate with the Notified Party and its counsel,
including permitting reasonable access to books and records, in contesting any Claim which the Notified Party elects to contest or, if appropriate, in making any counterclaim against the person asserting the Claim on behalf of Claimant or Notified
Party, or any cross-complaint against any person, and the Notified Party will reimburse the Claimant for reasonable out-of-pocket costs (but not the cost of employee time expended) incurred by the Claimant in so cooperating. 
  
 (d) The Claimant agrees to afford the Notified Party and its counsel
the opportunity to be present at, and to participate in, conferences with all persons, including governmental authorities, asserting any Claim against the Claimant or conferences with representatives or counsel for such persons. Unless the Notified
Party approves in writing the settlement of a Claim, no right to indemnification under Section 9.02 shall be established by such settlement. 
  
 10.04 Force Majeure. Delay in performance or non-performance by Manager or SAC shall be excused to the extent such performance is prevented by an
Act of God or other event beyond the reasonable control of the nonperforming party. 
  
 Section 11. Dispute Resolution. 
  
 11.01 Attempts to Resolve. All disputes and differences raised by any party to this Agreement which may arise out of or in connection with or with respect to this Agreement (including but not limited to any
rights of indemnification under Section 10 hereof) will be settled as far as possible by means of negotiations between Manager and the SAC Executive Committee. If, any such dispute is not resolved by Manager and the SAC Executive Committee within
five (5) business days of commencement of negotiations, then either party may submit the dispute to arbitration in accordance with Section 11.02 of this Agreement for a binding resolution thereof. 
  
 11.02 Arbitration. Except as provided in Section 11.05 hereof, any
dispute, controversy or claim arising out of or relating to this Agreement or the breach, termination or validity thereof which cannot be resolved by the parties pursuant to Section 11.01 hereof shall be settled by arbitration in accordance with the
Arbitration Rules of the American Arbitration Association in effect on the date of this Agreement (the “Rules”) as modified in this Article. The arbitration shall be held at a site mutually agreeable to the parties. 
  

 16 

 There shall be three arbitrators of whom each party shall select one within 15 days following
respondent’s receipt of claimant’s notice of arbitration and statement of claim. The two party-appointed arbitrators shall select a third arbitrator to serve as presiding arbitrator within 15 days of the appointment of the second
arbitrator. In the event one party fails to appoint an arbitrator within said 15 day period, then the arbitrator that has been selected by the other party shall select a second arbitrator and such arbitrators shall select a third arbitrator to be
the presiding arbitrator. 
  
 11.03 Claims and Judgments.
Within twenty (20) days of the respondent’s receipt of the claimant’s notice of arbitration and statement of claim, the respondent shall serve the claimant with its statement of defense and any counterclaims. Within twenty (20) days of
claimant’s receipt of the respondent’s statement of defense and counterclaims, the claimant shall serve its statement of defense to any counterclaims or set-offs asserted by the respondent. The tribunal shall permit and facilitate such
prehearing discovery and exchange of documents and information to which the parties in writing agree or which it determines is relevant to the dispute between the parties as is appropriate taking into account the needs of the parties and the
desirability of making discovery expeditious and cost-effective. All discovery shall be completed within forty-five (45) days from the date on which the respondent communicates its statement of defense and counterclaims, if any, to the claimant. The
hearing shall be held no later than ninety (90) days following the selection of the presiding arbitrator. Any arbitration award shall be rendered in U.S. dollars, with appropriate interest as determined by the tribunal. Judgment on any award shall
be entered in any court having jurisdiction thereof. 
  
 11.04
Submission to Jurisdiction. For purposes of disputes arising under this Agreement, the parties hereto submit themselves to the jurisdiction of the state and federal courts located in North and South Carolina with respect to the enforcement of
any arbitration award. Each of the parties hereby consents to the service of process by registered mail at its address set forth below and agrees that its submission to jurisdiction and its consent to service of process by mail is made for the
express benefit of the other party. The arbitration shall be governed by the Federal Arbitration Act, 9. U.S.C. SS 116, 201-208. 
  
 11.05 Right to Additional Remedies. Notwithstanding anything to the contrary in this Article, in the event any intellectual property
(including Confidential Information) is used in violation of the terms of this Agreement, each party shall be entitled, in addition to the remedy of arbitration set forth herein, to apply immediately to any court of competent jurisdiction for
immediate injunctive relief. Each party hereby submits itself to the jurisdiction of the state and federal courts located in North and South Carolina for any such relief or for the enforcement of any arbitration award against such party. 

 
 Section 12. Press Release. 
  
 The parties hereto shall attempt to consult with each other, when possible,
before issuing any press release or otherwise making any public statements with respect to this Agreement and the transactions contemplated hereby and shall not issue any such press release or make any public statement prior to such consultation,
except as may be required by law. 
  

 17 

 Section 13. Independent Status of Parties. 
  
 Except as specifically provided herein, nothing contained in this Agreement
shall be construed to constitute a party as agent for the other party. Except as specifically provided herein, neither party shall have the right to bind the other party, transact any business in the other party’s name or on its behalf in any
manner or form, or to make any promises or representations on behalf of the other party. 
  
 Section 14. Assignment. 
  
 Neither SAC nor Manager shall assign or transfer any right or obligation hereunder whether by operation of law, merger (which, for purposes hereof, shall constitute an assignment) or otherwise without the prior
written consent of the other. Any such attempted assignment or transfer in violation of this Section 14 shall be void and without legal effect. Notwithstanding the foregoing, Manager may assign all or any of its rights and obligations hereunder to
any wholly owned subsidiary (direct or indirect) of Coca-Cola Bottling Co. Consolidated; provided, however, that (a) Manager shall give SAC written notice of such assignment, (ii) any such assignee shall execute an agreement assuming
such duties and obligations and deliver the same to SAC, and (iii) Manager shall deliver to SAC a written unconditional guaranty of the performance of the duties and obligations so assigned and assumed and (b) such rights and obligations shall
revert back to Manager at such time as the assignee ceases to be a wholly owned subsidiary of Coca-Cola Bottling Co. Consolidated. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon, the successors and assigns
of the parties hereto. 
  
 Section 15. Governing
Law. 
  
 This agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina, regardless of any conflicts of laws or rules which would require, the application of the laws of another jurisdiction. 
  
 Section 16. Miscellaneous. 
  
 16.01 Notices. Any notice, request, instruction or other document to
be given hereunder by any party hereto to any other Person shall be in writing and delivered personally or by mail or any express mail service to the addresses set forth below. 
  

	 	(a)	If to Manager: 

  
 CCBCC Operations, LLC 
 4115 Coca-Cola Plaza 
 Charlotte, NC 28211 
 Attention: Chief Financial Officer 
 Telecopy Number: (704) 551-4451 
  

 18 

 With a copy to: 
  
 Kennedy Covington Lobdell & Hickman, L.L.P. 
 Hearst Tower 
 214 North Tryon Street, 47th Floor 
 Charlotte, NC 28202 
 Attention: Michael S. Hawley 
 Telecopy Number: (704) 353-3138 
  

	 	(b)	If to SAC: 

  
 South Atlantic Canners, Inc. 
 601 Cousar Street 
 Bishopville, South Carolina 29010 
 Attention: Chairman, Board of Directors 
 Telecopy Number: (803) 484-5841 
  
 16.02 Nonwaiver of Default. Any failure by either party at any time or from time to time to enforce and require the strict keeping and performance of any of the terms and conditions of this Agreement shall not constitute a waiver of
any such terms and conditions at any future time and shall not permit such party from insisting on the strict keeping and performance of such terms and conditions at any later time. 
  
 16.03 Interpretation. Should the provisions of this Agreement require judicial or arbitral interpretation, it is
agreed that the judicial or arbitral body interpreting or construing the same shall not apply the assumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that an instrument is to be
construed more strictly against the party which itself or through its agents prepared the same, it being agreed that the agents of both parties have participated in the preparation herein equally. 
  
 16.04 Partial Invalidity. If any portion of this Agreement is held
invalid, illegal or unenforceable and such invalidity, illegality, or unenforceability shall not have a material adverse effect with respect to the transactions contemplated herein taken as a whole, such determination shall not impair the
enforceability of the remaining terms and provisions contained herein. In such event, this Agreement shall be construed and interpreted as if such invalid, illegal or unenforceable terms were limited to the extent whereby such terms would be valid,
legal and enforceable. If such limitation is not possible, this Agreement shall be construed and interpreted as if such invalid, illegal or unenforceable terms were severed and not included herein. 
  
 16.05 Amendment or Rescission. This Agreement shall not be modified or
rescinded except by a written instrument setting forth such modification or rescission and signed by the parties hereto. 
  

 19 

 16.06 Duplicate Originals. For the convenience of the parties hereto, this Agreement may be
executed in two counterparts, and each such counterpart shall be deemed to be an original instrument and together constitute one and the same Agreement. 
  
 16.07 Captions. The captions or headings of the Sections and other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof. 
  
 16.08 Entirety of Agreement. This Agreement constitute the entire agreement between the parties hereto with respect to the, subject matter hereof, and there are no agreements, understandings, covenants,
conditions or undertaking, oral or written, expressed or implied, concerning such subject matter that are not merged herein. 
  
 16.09 Plurals, Etc. As used herein or in any document which incorporates the terms hereof: 
  
 (a) the plural form of the noun shall include the singular and the
singular shall include the plural, unless the context requires otherwise; 
  
 (b) each of the masculine, neuter and feminine forms of any pronoun shall include all forms unless the context otherwise requires; and 
  
 (c) words of inclusion shall not be construed as terms of limitation, so that references to included matters shall be
regarded as non-exclusive, non-characterizing illustrations. 
  
 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by its duly authorized representative as the date first written above. 
  

			
	MANAGER;
	
	 CCBCC Operations, LLC

		
	 By:
	 	 /s/ David V. Singer

	 Its:
	 	Vice President & CFO
		
	SAC:	 	 
	
	 South Atlantic Canners, Inc.

		
	 By:
	 	 /s/ Charles R. Ingram

	 Its:
	 	Chairman of the Board

  

 20 

 EXHIBIT A 
  
 Product Age and Quality Standards 
  
 All product provided to members of SAC shall meet quality standards established by The Coca-Cola Company or other franchise
company for which products are produced. 
  
 Unless otherwise
provided by the SAC Board, the following products shall not be shipped later than the time periods shown below: 
  

			
	 Sugar products in cans or glass
	  	63 days
		
	 Diet product in cans or glass
	  	35 days
		
	 Two or three liter product (whether diet or sugar)
	  	35 days
		
	 20 oz. PET
	  	28 days

  

 A-1 

 EXHIBIT B 
  
 Physical Cases/Units 
  

For purposes of this Agreement, Physical Case/Unit shall consist of the following: 
  

			
	 Type of Product

	 	 Description of Physical Case/Unit

	 Can
	 	24 can case
		
	 20 oz. PET bottle
	 	24 bottle case
		
	 1 liter PET bottle
	 	12 bottle case
		
	 2 liter PET bottle
	 	8 bottle case
		
	 3 liter PET bottle
	 	6 bottle case
		
	 Bulk syrup
	 	per 5,000 gallon tanker truck (no charge)
		
	 Post-mix bag-in-a-box
	 	1 Unit = two 5 gallon containers

  

 B-1 

 EXHIBIT C 
  
 Entity and On Site Expenses 
  
 SAC will incur certain specific expenses directly related to the routine operation of the SAC Business at the Facility.
These expenses are as follows: 
  

			
	 1.
	 	Raw, materials, manufacturing, labor and overhead costs at the Facility.
		
	 2.
	 	Payroll and benefit costs for all SAC Employees and Manager Employees at the Facility.
		
	 3.
	 	Insurance - Automobile, workers compensation, general liability, product liability, D&O, crime, property, boiler.
		
	 4.
	 	Utility costs.
		
	 5.
	 	Security.
		
	 6.
	 	Telephone.
		
	 7.
	 	Manufacturing supplies.
		
	 8.
	 	Building repairs.
		
	 9.
	 	Employee travel and entertainment, for employees based at the Facility.
		
	 10.
	 	Postage.
		
	 11.
	 	Garbage removal.
		
	 12.
	 	Janitorial maintenance.
		
	 13.
	 	Direct rent or lease expense.
		
	 14.
	 	Federal, state and local taxes related to the SAC Business and payable by SAC.
		
	 15.
	 	Business licenses and entity licenses and fees (i.e., annual report, foreign qualification, franchise fee, etc.) relating to SAC or the SAC Business.
		
	 16.
	 	Depository bank service charges.
		
	 17.
	 	Other Direct Expense line items designated as such in the Annual Business Plan which are not specifically stated herein.

  

 C-1 

 EXHIBIT D 
  
 Administrative Services Performed by Manager 
  
 The following administrative services shall be performed by Manager and included in the Management Fee: 
  

	 	l.	General accounting, billing, collections, accounts payable, payroll, maintenance of fixed asset records, tax accounting and return preparation, 

  

	 	2.	Negotiation of and administration of all financings purchasing of raw materials, administration of benefit plans, acquisition of insurance policies, monitoring compliance with all
relevant EPA and OSHA regulations, internal audit of policy compliance, and 

  

	 	3.	Other services now or hereafter provided by Manager at its headquarters at Manager’s Corporate Offices for Manager’s manufacturing operations. 

  

 D-1 

 EXHIBIT E 
  
 Miscellaneous Expenses 
  

The following expenses will constitute miscellaneous expenses under this Agreement to the extent included in the Annual Business Plan or otherwise
approved by the SAC Board. 
  

	 	1.	Legal fees and external accounting/audit and tax consulting fees and other professional fees related directly to the SAC Business. 

  

	 	2.	Environmental remediation expenses, environmental manager’s out-of-pocket and other environmental personnel services paid by Manager which benefit the SAC Business.

  

	 	3.	Umbrella insurance paid by Manager, if any, which benefits the SAC Business. 

  

	 	4.	External training costs for SAC Employees. 

  

	 	5.	Recruiting expense/placement fees paid to third parties for recruitment of SAC Employees to work at the Facility. 

  

	 	6.	All financing costs including fees, interest, documentation costs, etc., which relate to the SAC Business. 

  

	 	7.	Relocation expenses paid by Manager, if any, which relate to moving employees to the Facility. 

  

	 	8.	Reasonable costs for winding up SAC insurance programs. 

  

	 	9.	Reasonable costs for winding up employee benefit plans for SAC Employees at the Facility (active/retired/disabled). 

  

	 	10.	Any other expense or cost specifically approved by the SAC Board. 

  

 E-1 

 EXHIBIT F 
  
 Purchase Agreement Volume Levels 
  

			
	 Canned Product
	  	8.0 million cases
		
	 Bottled Product
	  	8.0 million cases
		
	 Water Product
	  	1.5 million cases

  

 F-1 

 EXHIBIT G 
  
 Insurance Policies and Coverage 
  

					
	 Coverage

	  	 Carrier

	  	 Amount of Coverage

	 	  	 	  	Included in CCBCC’s program
			
	 General Liability
	  	 ACE American
 Insurance Company
	  	 $2,000,000 Occurrence
 $5,000,000 General Aggregate-Per Location
 $500,000 Deductible

			
	 Automobile Liability
	  	 ACE American
 Insurance Company
	  	 $2,000,000 Ea. Accident
 $500,000 Ded.

			
	 Workers’ Compensation
	  	 ACE American
 Insurance Company
	  	 $1,000,000 Bodily Injury by Accident
 $500,000 Deductible

			
	 Umbrella
	  	 Lexington Insurance
 Company
	  	 $25,000,000 Aggregate xs $2,000,000 Primary
 $25,000,000 Each Incident xs $2,000,000 Primary

			
	 Excess Liability
	  	 Great American
  
 Arch
  
 American Guarantee/Zurich
  
 Federal Insurance Company
  
 XL Insurance
  
 Liberty Insurance

 
 American Guarantee/Zurich
	  	 $50,000,000 xs $27,000,000 Lead Umbrella
  
 $25,000,000 xs $77,000,000.
  
 $25,000,000 part of $75,000,000 xs $102,000,000
  
 $25,000,000 part of $75,000,000 xs $102,000,000
  
 $25,000,000 part of $75,000,000 xs $102,000,000
  
 $50,000,000 xs $177,000,000
  
 $23,000,000 xs $227,000,000

			
	 Property
	  	FM Global	  	 Blanket Limit
 $250,000,000 Flood, $25,000,000 Zone A,B, shaded
 X
 $100,000 Deductible

			
	 	  	 	  	SAC Specific Program
			
	 Travel Accident
	  	Hartford Insurance Company	  	 $100,000,000 Per Person AD&D
 $500,000 Aggregate

			
	 Directors & Officers Liability
	  	AIG	  	 $5,000,000 Aggregate
 $50,000 Deductible

  

 G-1Employment Agreement

 EXHIBIT 10.1 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (this “Agreement”) is entered into effective June 7, 2004 (the “Effective Date”), by and between DaVita Inc.
(“Employer”) and Tom Kelly (“Employee”). 
  
 In consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the parties hereto, intending to be legally bound hereby, agree as follows: 
  
 Section 1. Employment and Duties. Employer hereby employs Employee to
serve as Executive Vice President. Employee accepts such employment on the terms and conditions set forth in this Agreement. Employee shall perform the duties of Executive Vice President of the Employer and shall perform such other duties as may be
assigned from time to time by the Chief Executive Officer. Employee shall work out of Employer’s El Segundo corporate office. Employee agrees to devote substantially all of his time, energy, and ability to the business of Employer on a
full-time basis and shall not engage in any other business activities during the term of this Agreement, provided however, Employee may serve on one Board of Directors for one other for-profit company and may pursue normal charitable
activities so long as such activities do not require a substantial amount of time and do not interfere with his ability to perform his duties. If Employee wants to serve on the Board of Directors of one other company, he shall notify Employer’s
Chief Executive Officer and the Employer’s Board of Directors so that they can determine whether it is appropriate for him to serve on the Board of Directors of that other company. Employee shall at all times observe and abide by the
Employer’s policies and procedures as in effect from time to time. 
  
 Section 2. Compensation. In consideration of the services to be performed by Employee hereunder, Employee shall receive the following compensation and benefits: 
  
 2.1 Base Salary. Employee shall be paid a base salary of $450,000 per annum, less standard withholdings and
authorized deductions. Employee shall be paid consistent with Employer’s payroll schedule. The Base Salary will be reviewed each year during Employer’s annual review. Employer, in its sole discretion, may increase the Base Salary as a
result of any such review. 
  
 2.2 Benefits. Employee
and/or his family, as the case may be, shall be eligible for participation in and shall receive all benefits under Employer’s health and welfare benefit plans (including, without limitation, medical, prescription, dental, disability, and life
insurance) under the same terms and conditions applicable to most executives at similar levels of compensation and responsibility. 
  
 2.3 Performance Bonus. 
  
 (a) Employee shall be eligible to receive a discretionary performance bonus (the “Bonus”) between zero and $300,000, payable in a manner
consistent with Employer’s practices and procedures. The amount of the Bonus, if any, will be decided by the Chief Executive Officer and/or the Board of Directors or the Compensation Committee of the Board in his/its sole discretion.

  
 (b) Employee must be employed by Employer (or an affiliate)
on the date any Bonus is paid to be eligible to receive such Bonus and, if Employee is not employed by Employer (or an affiliate) on the date any Bonus is paid for any reason whatsoever, Employee shall not be entitled to receive such Bonus.

 2.4 Housing Bonus. Employer shall pay Employee a Housing Bonus of $100,000 at the end of the
first, second, and third year of this Agreement and $50,000 at the end of the fourth and fifth year of this Agreement. 
  
 2.5 Vacation. Employee shall have vacation, subject to the approval of the Chief Executive Officer. 
  
 2.6 Stock Options. Employee shall receive options to purchase 125,000
shares of Employer stock. Such options shall have a five-year term and vest over a four-year period, one-quarter vesting on each anniversary date of the grant. The exercise price shall be the closing price as reported on the New York Stock Exchange
on the start date of this Agreement. The options will be reflected in a separate Stock Option Agreement. 
  
 2.7 Restricted Stock Units. 
  
 (a) On the Effective Date, Employee will receive 10,000 shares of Employer’s restricted stock units, entitling Employee to the same number of full
shares of DaVita common stock, subject to the following vesting conditions: such restricted stock units shall fully vest on the second anniversary of the Employee’s date of hire. The terms of the restricted stock units will be reflected in a
separate Restricted Stock Units Agreement. 
  
 (b) On the
Effective Date, Employee will receive an additional 15,000 shares of Employer’s restricted stock units, entitling Employee to the same number of full shares of DaVita common stock, subject to the following vesting conditions: such restricted
stock units shall vest over a five-year period, one-third vesting on the third, fourth, and fifth anniversary date of Employee’s date of hire. The terms of the restricted stock units will be reflected in a separate Restricted Stock Units
Agreement. 
  
 2.8 Acceleration of Vesting. Upon a Change
of Control, as that term is defined below, Employee’s entire award of stock options and restricted stock units shall vest immediately. 
  
 2.9 Indemnification. Employer agrees to indemnify Employee against and in respect of any and all claims, actions, or demands, in accordance with
all applicable laws. 
  
 2.10 Reimbursement. Employer also
agrees to reimburse Employee in accordance with Employer’s reimbursement policies for travel and entertainment expenses, as well as other business-related expenses, incurred in the performance of his duties hereunder. 
  
 2.11 Changes to Benefit Plans. Employer reserves the right to modify,
suspend, or discontinue any and all of its health and welfare benefit plans, practices, policies, and programs at any time without recourse by Employee so long as such action is taken generally with respect to all other similarly-situated peer
executives and does not single out Employee. 
  
 Section 3.
Provisions Relating to Termination of Employment. 
  
 3.1
Employment Is At-Will. Employee’s employment with Employer is “at will” and is terminable by Employer or by Employee at any time and for any reason or no reason, subject to the notice requirements set forth below. 

 3.2 Termination for Material Cause. Employer may terminate Employee’s employment for Material
Cause (as defined below) upon at least thirty (30) days’ advance written notice specifying in detail the cause for the termination and the intended termination date. Upon termination for Material Cause, Employee shall (i) be entitled to receive
the Base Salary and benefits as set forth in Section 2.1 and Section 2.2, respectively, through the effective date of such termination and (ii) not be entitled to receive any other compensation, benefits, or payments of any kind,
except as otherwise required by law or by the terms of any benefit or retirement plan or other arrangement that would, by its terms, apply. 
  
 3.3 Other Termination. Employer may terminate the employment of Employee for any reason or for no reason at any time upon at least thirty (30)
days’ advance written notice. If Employer terminates the employment of Employee for reasons other than for Material Cause or Disability, or if Employee resigns within sixty (60) days following Constructive Discharge or a Good Cause Event (as
those terms are defined below), Employee shall (i) be entitled to receive the Base Salary and benefits as set forth in Section 2.1 and Section 2.2, respectively, through the effective date of such termination or resignation, (ii) be
entitled to receive his salary for the two-year period following the termination of his employment, (iii) be entitled to continue to receive during the eighteen-month period following the effective date of such termination (the “Severance
Period”) the employee health insurance benefits set forth in Section 2.2 (to the extent Employee can continue to receive such benefits under Employer’s health insurance policies and programs in effect at the effective time of such
termination through the exercise of his rights under COBRA, Employee shall elect to receive COBRA benefits, and Employer shall pay Employee’s insurance premiums for COBRA coverage during the Severance Period; provided, however, to
the extent such benefits cannot be provided under such policies and programs, Employer shall purchase for Employee reasonably equivalent health insurance benefits during the Severance Period subject to the limitation set forth below and subject to
the limitation set forth in Section 2.7); and (iv) other than as set forth in Section 4 of this Agreement, not be entitled to receive any other compensation, benefits, or payments of any kind, except as otherwise required by law or by the
terms of any benefit or retirement plan or other arrangement that would, by its terms, apply. The foregoing notwithstanding, in the event Employee accepts employment (as an employee or as an independent contractor) with another employer during the
Severance Period, (x) Employee shall immediately notify Employer of such employment and (y) Employer’s obligation to continue to provide certain health insurance benefits pursuant to clause (iii) of the immediately preceding sentence shall
terminate once Employee becomes eligible to participate in his new employer’s health benefit plan. 
  
 During the Severance Period, Employee agrees to make himself available to answer questions and to cooperate in the transition of his duties. In addition, Employee agrees to cooperate with Employer in the prosecution
and/or defense of any claim, including making himself available for any interviews, appearing at depositions, and producing requested documents. 
  
 3.4. Voluntary Resignation. Employee may resign from Employer at any time upon at least ninety (90) days’ advance written notice. If Employee
resigns from Employer other than within sixty (60) days following a Constructive Discharge, a Good Cause Event, or a Change in Management, as those terms are defined below, Employee shall (i) be entitled to receive the Base Salary and benefits as
set forth in Section 2.1 and Section 2.2, respectively, through the effective date of such termination and (ii) not be entitled to receive any other compensation, benefits, or payments of any kind, except as otherwise required by law
or by the terms of any benefit or retirement plan or other arrangement that would, by its terms, apply. In the event Employee resigns from Employer at any time, Employer shall have the right to make such resignation effective as of any date before
the expiration of the required notice period. 
  
 3.5
Disability. Upon thirty (30) days’ advance notice (which notice may be given before the completion of the periods described herein), Employer may terminate Employee’s employment for Disability (as defined below), provided that
either (i) immediately upon the effective date of such termination, Employee shall be eligible to receive full disability benefits under the disability insurance, if any, provided to Employee by Employer or (ii) Employer shall continue to pay the
Base Salary to Employee until the first to occur of (A) full disability benefits are received or (B) one (1) year from the effective date of such termination. 

 3.6 Definitions. For the purposes of this Section 3, the following terms shall have the
meanings indicated: 
  
 (a) “Change of Control” shall
mean (i) any transaction or series of transactions in which any person or group (within the meaning of Rule 13d-5 under the Exchange Act and Sections 13(d) and 14(d) of the Exchange Act) becomes the direct or indirect “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), by way of a stock issuance, tender offer, merger, consolidation, other business combination or otherwise, of greater than 40% of the total voting power (on a fully diluted basis as if all
convertible securities had been converted and all warrants and options had been exercised) entitled to vote in the election of directors of Employer (including any transaction in which Employer becomes a wholly-owned or majority-owned subsidiary of
another corporation), (ii) any merger or consolidation or reorganization in which Employer does not survive, (iii) any merger or consolidation in which Employer survives, but the shares of Employer’s Common Stock outstanding immediately prior
to such merger or consolidation represent 40% or less of the voting power of Employer after such merger or consolidation, and (iv) any transaction in which more than 40% of Employer’s assets are sold. However, despite the occurrence of
any of the above-described events, a Change of Control will not have occurred if Kent Thiry remains the Chief Executive Officer of Employer for at least one (1) year after the Change of Control or becomes the Chief Executive Officer of the
surviving company with which Employer merged or consolidated and remains in that position for at least one (1) year after the Change of Control. 
  
 (b) “Constructive Discharge” shall mean the occurrence of any of the following events after the date of a Change of Control without
Employee’s express written consent: (i) the scope of Employee’s authority, duties and responsibilities are materially diminished or are not (A) in the same general level of seniority or (B) of the same general nature as Employee’s
authority, duties, and responsibilities with Employer immediately before such Change of Control; (ii) the failure by Employer to provide Employee with office accommodations and assistance substantially equivalent to the accommodations and assistance
provided to Employee immediately before such Change of Control; (iii) the principal office to which Employee is required to report is changed to a location that is more than twenty (20) miles from the principal office to which Employee is required
to report immediately before such Change of Control; or (iv) a reduction by Employer in Employee’s Base Salary, bonus arrangement, or other material benefits as in effect on the date of such Change of Control. 
  
 (c) “Disability” shall mean the inability, for a period of six (6)
months, to adequately perform Employee’s regular duties, with or without reasonable accommodation, due to a physical or mental illness, condition, or disability. 
  
 (d) “Material Cause” shall mean any of the following: (i) conviction of a felony; (ii) the adjudication by a
court of competent jurisdiction that Employee has committed any act of fraud or dishonesty resulting or intended to result directly or indirectly in personal enrichment at the expense of Employer; (iii) repeated failure or refusal by Employee to
follow policies or directives reasonably established by the Chief Executive Officer of Employer or his designee that goes uncorrected for a period of thirty (30) consecutive days after written notice has been provided to Employee; (iv) a material
breach of this Agreement that goes uncorrected for a period of thirty (30) consecutive days after written notice has been provided to Employee; (v) an act of unlawful discrimination, including sexual harassment; (vi) a violation of the duty of
loyalty or of any fiduciary duty; or (vii) exclusion or notice of exclusion of Employee from participating in any federal health care program. 

 (e) “Good Cause Event” shall mean the occurrence of any of the following events without
Employee’s express written consent: (i) Employer materially diminishes the scope of Employee’s authority, duties and responsibilities and his duties and responsibilities are not (A) in the same general level of seniority or (B) of the same
general nature; (ii) Employer ceases to provide Employee with office accommodations and assistance; (iii) Employer relocates the principal office to which Employee is required to report to a location that is more than twenty (20) miles from the
principal office to which Employee was required to report; or (iv) Employer reduces Employee’s Base Salary, bonus arrangement, or other material benefits (unless the change in benefit plans is taken generally with respect to all other
similarly-situated peer executives and does not single out Employee). 
  
 3.7 Notice of Termination. Any purported termination of Employee’s employment by Employer or by Employee shall be communicated by a written Notice of Termination to the other party hereto in accordance with Section 7
hereof. A “Notice of Termination” shall mean a written notice that indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment. 
  
 3.8 Effect of
Termination. Upon termination, this Agreement shall be of no further force and effect and neither party shall have any further right or obligation hereunder; provided, however, that no termination shall modify or affect the rights and
obligations of the parties that have accrued prior to termination; and provided further, that the rights and obligations of the parties under Section 3, Section 4, Section 5, Section 6, and
Section 7 shall survive termination of this Agreement. 
  
 Section 4: Change in Management – Additional Benefits 
  
 4.1 Material Change in Responsibilities. If, during the first two years of Employee’s employment, Kent Thiry is no longer the Chief Executive Officer and Employee has resigned within sixty (60) days of a
Constructive Discharge or Good Cause Event, in addition to the benefits received as set forth in Section 3.3, the vesting schedule of his stock option grant shall be accelerated by one (1) year. 
  
 4.2 No Material Change in Responsibilities. If, during the first two
years of Employee’s employment, Kent Thiry is no longer the Chief Executive Officer, but there has not been a Constructive Discharge or Good Cause Event, Employee may still resign within 60 days from the occurrence of this event. If Employee
does resign, in addition to the benefits set forth in Section 3.4, Employer shall continue to pay Employee his Base Salary for the one-year period following his resignation. 
  
 Section 5. Certain Covenants of Executive. 
  
 5.1 Confidential Information. 
  
 (a) Employee acknowledges and agrees that: (i) in the course of his employment by Employer, it will or may be necessary for
Employee to create, use, or have access to (A) technical, business, or customer information, materials, or data relating to Employer’s present or planned business that has not been released to the public with Employer’s authorization,
including, but not limited to, confidential information, materials, or proprietary data belonging to Employer or relating to Employer’s affairs (collectively, “Confidential Information”) and (B) information and materials that concern
Employer’s business that come into Employer’s possession by reason of employment with Employer (collectively, “Business Related Information”); (ii) all Confidential Information and Business Related Information are the property of
Employer; (iii) the use, misappropriation, or disclosure of any Confidential Information or Business Related Information would constitute a breach of trust and could cause serious and irreparable injury to Employer; and (iv) it is essential to the
protection of Employer’s goodwill and maintenance of Employer’s competitive position that all Confidential Information and Business Related Information be kept confidential and that Employee not disclose any Confidential Information or
Business Related Information to others or use Confidential Information or Business Related Information to Employee’s own advantage or the advantage of others. 

 (b) In recognition of the acknowledgment contained in Section 5.1(a) above, Employee agrees that,
during the term of this Agreement and thereafter until the Confidential Information and/or Business Related Information becomes publicly available (other than through a breach by Employee), Employee shall: (i) hold and safeguard all Confidential
Information and Business Related Information in trust for Employer, its successors, and assigns; (ii) not appropriate or disclose or make available to anyone for use outside of Employer’s organization at any time, either during employment with
Employer or subsequent to the termination of employment with Employer for any reason, any Confidential Information and Business Related Information, whether or not developed by Employee, except as required in the performance of Employee’s
duties to Employer; (iii) keep in strictest confidence any Confidential Information or Business Related Information; and (iv) not disclose or divulge, or allow to be disclosed or divulged by any person within Employee’s control, to any person,
firm, or corporation, or use directly or indirectly, for Employee’s own benefit or the benefit of others, any Confidential Information or Business Related Information. 
  
 (c) Employee agrees that all lists, materials, records, books, data, plans, files, reports, correspondence, and other
documents (“Employer material”) used or prepared by, or made available to, Employee shall be and remain property of Employer. Upon termination of employment, Employee shall immediately return all Employer material to Employer, and Employee
shall not make or retain any copies or extracts thereof. 
  
 5.2.
Competition. Employee agrees that during the term of this Agreement and for a period of two (2) years after the termination of his employment with Employer for any reason, he shall not: (i) be an officer, director, consultant, partner, owner,
stockholder, employee, creditor, agent, trustee, independent contractor, or advisor on a paid or unpaid basis of any individual, partnership, limited liability company, corporation, independent practice association, management services organization,
or any other entity (collectively, “Person”) that either is in the business of or, directly or indirectly, derives any economic benefit from providing, arranging, offering, managing, or subcontracting dialysis services or renal care
services; or (ii) directly or indirectly, own, manage, control, operate, invest in, acquire an interest in, or otherwise engage in, act for, or act on behalf of any Person (other than Employer and its subsidiaries and affiliates) engaged in any
activity in the United States or in those countries outside the United States in which Employer or any of its subsidiaries or affiliates had conducted any business during Employee’s employment hereunder, where such activity is similar to or
competitive with the activities carried on by Employer or any of its subsidiaries or affiliates. As used herein, the term “dialysis services” or “renal care services” includes, but shall not be limited to, all dialysis services
and nephrology-related services provided by Employer at any time during the period of Employee’s employment, including, but not limited to, hemodialysis, acute dialysis, apheresis services, peritoneal dialysis of any type, staff-assisted
hemodialysis, home hemodialysis, dialysis-related laboratory and pharmacy services, access-related services, Method II dialysis supplies and services, nephrology practice management, vascular access services, disease management services,
pre-dialysis education, ckd services, or renal physician/center network management, and any other services or treatment for persons diagnosed as having end stage renal disease (“ESRD”) or pre-end stage renal disease, including any dialysis
services provided in an acute hospital. The term “ESRD” shall have the same meaning as set forth in Title 42, Code of Federal Regulations 405.2101 et seq. or any successor thereto. Employee acknowledges that the nature of
Employer’s activities is such that competitive activities could be conducted effectively regardless of the geographic distance between Employer’s place of business and the place of any competitive business. Notwithstanding anything herein
to the contrary, such activities shall not include the ownership of 1% or less of the issued and outstanding stock, which is purchased in the open market, of a public company that conducts business that is similar to or competitive with the business
carried on by the Employer or any of its subsidiaries or affiliates. 

 Notwithstanding anything set forth herein, Employee shall not be prohibited from being employed (as an
employee or independent contractor) by any Person that provides dialysis services and/or renal care services, as those terms as defined above, so long as such services constitute no more than 5% of that Person’s total business operations, so
long as Employee does not focus a majority of his attention on such services, and so long as a majority of Employee’s job duties and responsibilities do not include the direct oversight of such services. 
  
 Employee acknowledges and agrees that the geographical limitations and
duration of this covenant not to compete is reasonable. In particular, Employee agrees that his position is national in scope and that he will have an impact on every location where Employer currently conducts and will conduct business. Therefore,
Employee acknowledges and agrees that, like his position, this covenant cannot be limited to any particular geographic region. 
  
 5.3 Solicitation of Employees. Employee promises and agrees that he will not, for a period of two (2) years after the termination of his
employment, directly or indirectly, solicit any of Employer’s employees to work for any business, individual, partnership, firm, corporation, or other entity that is then in competition with Employer’s business or any subsidiary or
affiliate of Employer. Employee also agrees that during his employment and for a period of two (2) years after the termination of his employment, directly or indirectly, that he will not hire any of Employer’s employees to work (as an employee
or an independent contractor) for any business, individual, partnership, firm, corporation, or other entity that is then in competition with Employer’s business or any subsidiary or affiliate of Employer. In addition, Employee agrees that
during his employment and for a period of two (2) years after the termination of his employment, directly or indirectly, that he will not take any action that may reasonably result in any of Employer’s employees going to work (as an employee or
an independent contractor) for any business, individual, partnership, firm, corporation, or other entity that is then in competition with Employer’s business or any subsidiary or affiliate of Employer. 
  
 5.4 Other solicitation. Employee promises and agrees that during the
term of this Agreement and for a period of two (2) years after the termination of his employment for any reason, he shall not, directly or indirectly: (i) induce any patient or customer of Employer, either individually or collectively, to patronize
any competing dialysis facility; (ii) request or advise any patient, customer, or supplier of Employer to withdraw, curtail, or cancel such person’s business with Employer; (iii) enter into any contract the purpose or result of which would
benefit Employee if any patient or customer of Employer were to withdraw, curtail, or cancel such person’s business with Employer; (iv) solicit, induce, or encourage any physician (or former physician) affiliated with Employer or induce or
encourage any other person under contract with Employer to curtail or terminated such person’s affiliation or contractual relationship with Employer; (v) disclose to any Person the names or addresses of any patient or customer of Employer or of
any physician (or former physician) affiliated with Employer; or (vi) disparage Employer or any of its agents, employees, or affiliated physicians in any fashion. 
  
 5.5 Enforcement. In the event that any part of this Section 5 shall be held unenforceable or invalid, the
remaining parts hereof shall nevertheless continue to be valid and enforceable as though the invalid portions had not been a part hereof. In the event that the area, period of restriction, activity, or subject established in accordance with this
Section 5 shall be deemed to exceed the maximum area, period of restriction, activity, or subject that a court of competent jurisdiction deems enforceable, such area, period of restriction, activity, or subject shall, for the purpose of
Section 5, be reduced to the extent necessary to render them enforceable. 
  
 5.6 Equitable Relief. Employee agrees that any violation by Employee of any covenant in Section 5 will or would cause Employer to suffer irreparable injury, the exact amount of which will be difficult to
ascertain. For that reason, Employee agrees that Employer shall be entitled, as a matter of right, to a temporary, preliminary, and/or permanent injunction and/or other injunctive relief, ex parte or otherwise, from 

 any court of competent jurisdiction, restraining any further violations by Employee. Such injunctive relief shall be in
addition to and in no way limit any and all other remedies Employer shall have in law and equity for the enforcement of such covenants and provisions. Employee consents and stipulates to the entry of such injunctive relief in such a court
prohibiting him from any further violation of the covenants and provisions of Section 5. 
  
 Section 6. Excess Parachute Payment. In the event that any payment or benefit received or to be received by Employee in connection with a Change of
Control, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement by Employer, any predecessor or successor to Employer or any corporation affiliated (within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended (the “Code”)) with Employer or which becomes so affiliated pursuant to the transactions resulting in a Change of Control (collectively all such payments are hereinafter referred to as the “Total
Payments”), is deemed to be an “Excess Parachute Payment” (in whole or in part) to Employee within the meaning of Section 280G of the Code, as in effect at such time, no change shall be made to the Total Payments to be made in
connection with the Change of Control, except that, in addition to all other amounts to be paid to Employee by Employer hereunder, Employer shall, within thirty (30) days of the date on which any Excess Parachute Payment is made, pay to Employee, in
addition to any other payment, coverage or benefit due and owing hereunder, an amount determined by (i) multiplying the rate of excise tax then imposed by Code Section 4999 by the amount of the “Excess Parachute Payment” received by
Employee (determined without regard to any payments made to Employee pursuant to this Section 6) and (ii) dividing the product so obtained by the amount obtained by subtracting (A) the aggregate local, state and Federal income tax rates
(including the value of the loss of itemized deductions under Section 68 of the Internal Revenue Code) applicable to the receipt by Employee of the “Excess Parachute Payment” (taking into account the deductibility for Federal income tax
purposes of the payment of state and local income taxes thereon) from (B) the amount obtained by subtracting from 1.00 the rate of excise tax then imposed by Section 4999 of the Code. It is Employer’s intention that Employee’s net
after-tax position be identical to that which would have obtained had Sections 280G and 4999 not been part of the Code. For purposes of implementing this Section 6, (i) no portion, if any, of the Total Payments, the receipt or enjoyment of
which Employee shall have effectively waived in writing prior to the date of payment of the Total Payments, shall be taken into account, and (ii) the value of any non-cash benefit or any deferred cash payment included in the Total Payments shall be
determined by Employer’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.  
  
 The calculation of the excess parachute payment is as follows: X = Y ) (1 - (A + B + C)), where X is the total dollar amount of the Tax Gross-Up Payment,
Y is the total Excise Tax imposed with respect to such Change in Control Benefit, A is the Excise Tax rate in effect at the time, B is the highest combined marginal federal income and applicable state income tax rate in effect, after taking into
account the deductibility of state income taxes against federal income taxes to the extent allowable, for the calendar year in which the Tax Gross-Up Payment is made, and C is the applicable Hospital Insurance (Medicare) Tax Rate in effect for the
calendar year in which the Tax Gross-Up Payment is made. 
  
 Section 7. Miscellaneous. 
  
 7.1 Entire
Agreement; Amendment. This Agreement and the separate Stock Option Agreement represents the entire understanding of the parties hereto with respect to the employment of Employee and supersedes all prior agreements with respect thereto. This
Agreement may not be altered or amended except in writing executed by both parties hereto. 
  
 7.2 Assignment; Benefit. This Agreement is personal and may not be assigned by Employee. This Agreement may be assigned by Employer and shall inure to the benefit of and be binding upon the successors and
assigns of Employer. 

 7.3 Applicable Law. This Agreement shall be governed by the laws of the State of California,
without regard to the principles of conflicts of laws. 
  
 7.4
Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid,
addressed to Employer at its principal office and to Employee at Employee’s principal residence as shown in Employer’s personnel records, provided that all notices to Employer shall be directed to the attention of the Chief Executive
Officer with a copy to the General Counsel of Employer, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

  
 7.5 Construction. Each party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against any party on the basis that the party was the drafter. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. 
  
 7.6
Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Photographic or facsimile copies of such signed
counterparts may be used in lieu of the originals for any purpose. 
  
 7.7 Legal Counsel. Employee and Employer recognize that this is a legally binding contract and acknowledge and agree that they have had the opportunity to consult with legal counsel of their choice. 
  
 7.8 Waiver. The waiver by any party of a breach of any provision of
this Agreement by the other shall not operate or be construed as a waiver of any other or subsequent breach of such or any provision. 
  
 7.9 Invalidity of Provision. In the event that any provision of this Agreement is determined to be illegal, invalid, or void for any reason, the
remaining provisions hereof shall continue in full force and effect. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date and year first written above. 
  

					
	 DAVITA INC.
	  	 EMPLOYEE

			
	 By
	 	 /s/    KENT J. THIRY

	  	 /s/    TOM KELLY

	 	 	 Kent J. Thiry
 Chief Executive Officer and
 Chairman
of the Board
	  	 Tom Kelly

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