10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended September 25, 2010

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from              to             

Commission file number 1-12340

GREEN MOUNTAIN COFFEE ROASTERS, INC.

(Exact name of registrant as specified in its charter)

Delaware	03-0339228
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

33 Coffee Lane, Waterbury, Vermont	05676
(Address of principal executive offices)	(zip code)

(802) 244-5621

(Registrants’ telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.10 par value per share	The Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller Reporting Company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the voting stock of the registrant held by non-affiliates of the registrant on March 27, 2010 was approximately $3,512,000,000 based upon the closing price of such stock on March 26, 2010.

As of November 26, 2010, 132,911,701 shares of common stock of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the 2011 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K, are incorporated by reference in Part III, Items 10-14 of this Form 10-K.

GREEN MOUNTAIN COFFEE ROASTERS, INC,

Annual Report on Form 10-K

For

Fiscal Year Ended September 25, 2010

Table of Contents

		Page
Overview of Restatement			i
PART I			1
Item 1.	Business		1
Item 1A.	Risk Factors		9
Item 1B.	Unresolved Staff Comments		20
Item 2.	Properties		20
Item 3.	Legal Proceedings		20
Item 4.	Removed and Reserved
PART II			23
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Securities		23
Item 6.	Selected Financial Data		24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		47
Item 8.	Financial Statements and Supplementary Data		48
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		48
Item 9A.	Controls and Procedures		49
Item 9B.	Other Information		51
PART III			52
Item 10.	Directors, Executive Officers and Corporate Governance		52
Item 11.	Executive Compensation		52
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		52
Item 13.	Certain Relationships and Related Transactions, and Director Independence		52
Item 14.	Principal Accounting Fees and Services		52
PART IV			53
Item 15.	Exhibits and Financial Statement Schedules		53

Explanatory Note

Overview of Restatement

In this Annual Report on Form 10-K, Green Mountain Coffee Roasters, Inc. (together with its subsidiaries, the “Company” or “GMCR”):

(a) restates its Consolidated Balance Sheets as of September 26, 2009 and the related Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the fiscal years ended September 27, 2008 and September 26, 2009;

(b) amends its Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) as it relates to the fiscal years ended September 27, 2008 and September 26, 2009;

(c) restates its “Selected Financial Data” in Item 6 for fiscal years 2006, 2007, 2008 and 2009; and

(d) restates its Unaudited Quarterly Financial Data for each fiscal quarter in the fiscal year ended September 26, 2009 and the first three fiscal quarters in the fiscal year ended September 25, 2010.

Background on the Restatement

As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on November 19, 2010, the board of directors of the Company, based on the recommendation of the audit committee and in consultation with management, concluded that, because of errors identified in the Company’s previously issued financial statements for the fiscal years ended September 30, 2006, September 29, 2007, September 27, 2008 and September 26, 2009 and the first three quarters of fiscal 2010, the Company would restate its previously issued financial statements, including the quarterly data for fiscal years 2009 and 2010 and its selected financial data for the relevant periods.

These errors were discovered by management during the course of its preparation of this Annual Report and the audit of the financial results for fiscal 2010, as well as during the course of an internal investigation initiated by the audit committee of the Company’s board of directors in light of the previously disclosed inquiry by the staff of the SEC Division of Enforcement. The audit committee of the Company’s board of directors has completed its investigation, and the Company, at the discretion of the audit committee of the Company’s board of directors, continues to cooperate fully with the SEC. None of the financial statement errors implicate misconduct with respect to the Company or its management or employees. In addition, none of the financial statement errors are related to the Company’s relationship with M.Block & Sons, Inc., the fulfillment entity through which the Company makes a majority of the at-home orders for the Keurig business unit’s single-cup business sold to retailers.

The restated financial statements correct the following errors:

Intercompany Elimination Adjustments:

• A $7.4 million overstatement of pre-tax income ($4.5 million after tax), cumulative over the restated periods, due to the K-Cup^® portion pack inventory adjustment error previously reported in the Company’s Form 8-K filed on September 28, 2010. This error is the result of applying an incorrect standard cost to intercompany K-Cup portion pack inventory balances in consolidation. This error resulted in an overstatement of the consolidated inventory and an understatement of the cost of sales. Rather than correcting the cumulative amount of the error in the quarter ended September 25, 2010, as disclosed in the September 28, 2010 Form 8-K, the effect of this error has been recorded in the applicable restated periods.

• A $0.7 million overstatement of pre-tax income ($0.4 million after tax), cumulative over the restated periods, due to applying an incorrect standard cost to intercompany brewer inventory balances in

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consolidation. This error was identified during the preparation of the fiscal year 2010 financial statements and resulted in an overstatement of the consolidated inventory and an understatement of the cost of sales.

• Certain intercompany sales transactions were not properly eliminated, primarily in the first three quarters of fiscal 2010, which resulted in understatements of both sales and cost of sales of an equal amount and did not affect net income.

Third Party Royalty Adjustments:

• A $1.0 million overstatement of pre-tax income ($0.7 million after tax), cumulative over the restated periods, due to changes in the timing and classification of the Company’s historical recognition of royalties from third party licensed roasters. Because royalties were earned upon shipment of K-Cup^® portion packs by roasters pursuant to the terms and conditions of the licensing agreements with these roasters, Keurig historically recognized these royalties at the time Keurig purchased the K-Cup portion packs from the licensed roasters and classified them in net sales. Management has determined that the royalty should be recognized as a reduction to the carrying value of the related inventory which will reduce cost of sales when the K-Cup portion packs are sold to a third-party customer. Due to the Company’s completed and pending acquisitions of third party licensed roasters, these purchases and the associated royalties had less impact, since the post-acquisition royalties from these wholly-owned roasters are eliminated in the Company’s consolidated financial statements.

Marketing and Customer Incentive Expense Adjustments:

• A $1.4 million overstatement of pre-tax income ($0.9 million after tax), cumulative over the restated periods, due to the under-accrual of certain marketing and customer incentive program expenses. The Company also has corrected the classification of certain of these amounts as reductions to net sales instead of selling and operating expenses. These programs include, but are not limited to, brewer mark-down support and funds for promotional and marketing activities. Management has determined that a lack of adequate communication between the accounting function to gather the appropriate information from the sales and marketing functions resulted in expenses for certain of these programs being recorded in the wrong fiscal periods.

• A $0.7 million understatement of pre-tax income ($0.4 million after tax) for the Specialty Coffee business unit (“SCBU”), due primarily to a failure to reverse an accrual related to certain customer incentive programs in the second fiscal quarter of 2010. The over-accrual was not identified and corrected until the fourth fiscal quarter of 2010.

Other Adjustments:

• In addition to the errors described above, the restated financial statements also include adjustments to correct certain other immaterial errors, including previously unrecorded immaterial adjustments identified in audits of prior years’ financial statements.

Cumulatively through June 26, 2010, the restatement had the following effects on net income (in thousands):

	Inter- Company Elimination Adjustments		Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			Total Decrease to Net Income
2006	$	278	$	187		$	—		$	—		$	465
2007		174		112			—			—			286
2008		779		304			(112	)		(341	)		630
2009		584		743			(385	)		501			1,443
2010		3,072		(682	)		925			(80	)		3,235
	$	4,887	$	664		$	428		$	80		$	6,059

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Effects of Restatement

The following table sets forth the effects of the restatement on affected items within our previously reported Consolidated Statements of Operations. The adjustments necessary to correct the errors have no effect on reported cash flow from operations and do not have a material impact on the balance sheet.

(in thousands, except per share data)		39-weeks ended June 26, 2010			52-weeks ended September 26, 2009			52-weeks ended September 27, 2008			52-weeks ended September 29, 2007			53-weeks ended September 30, 2006
Net Sales	As Originally Reported	$	985,792		$	803,045		$	500,277		$	341,651		$	225,323
	Adjustments		(2,104	)		(16,910	)		(7,760	)		(5,539	)		(1,018	)
	As Restated	$	983,688		$	786,135		$	492,517		$	336,112		$	224,305
Gross Profit	As Originally Reported	$	320,208		$	249,764		$	176,905		$	131,121		$	82,034
	Adjustments		(7,896	)		(4,373	)		(2,865	)		(965	)		(763	)
	As Restated	$	312,312		$	245,391		$	174,040		$	130,156		$	81,271
Operating Income	As Originally Reported	$	102,470		$	95,713		$	42,412		$	27,699		$	18,114
	Adjustments		(5,374	)		(2,327	)		(1,013	)		(468	)		(763	)
	As Restated	$	97,096		$	93,386		$	41,399		$	27,231		$	17,351
Net Income	As Originally Reported	$	55,750		$	55,882		$	22,299		$	12,843		$	8,443
	Adjustments		(3,235	)		(1,443	)		(630	)		(286	)		(465	)
	As Restated	$	52,515		$	54,439		$	21,669		$	12,557		$	7,978
Basic Income Per Share	As Originally Reported	$	0.42		$	0.49		$	0.21		$	0.12		$	0.08
	Adjustments		(0.02	)		(0.01	)		(0.01	)		—			—
	As Restated	$	0.40		$	0.48		$	0.20		$	0.12		$	0.08
Diluted Income Per Share	As Originally Reported	$	0.40		$	0.46		$	0.19		$	0.12		$	0.08
	Adjustments		(0.02	)		(0.01	)		—			(0.01	)		(0.01	)
	As Restated	$	0.38		$	0.45		$	0.19		$	0.11		$	0.07

The adjustments made as a result of the restatement are more fully discussed in Note 3, Restatement of Previously Issued Financial Statements, of the Notes to Consolidated Financial Statements included in this Annual Report. To further review the effects of the accounting errors identified and the restatement adjustments, see Part II—Item 6—Selected Financial Data and Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Annual Report. For a description of the control deficiencies identified by management as a result of the investigation and our internal reviews, and management’s plan to remediate those deficiencies, see Part II—Item 9A—Controls and Procedures.

Previously filed Annual Reports on Form 10-K and quarterly reports on Form 10-Q for the periods affected by the restatement have not been amended. Accordingly, investors should no longer rely upon the Company’s previously released financial statements for these periods and any earnings releases or other communications relating to these periods. See Note 24, Unaudited Quarterly Financial Data, of the Notes to the Consolidated Financial Statements in this Annual Report for the impact of these adjustments on each of the quarterly periods in fiscal 2009 and for the first three quarters of fiscal 2010. Quarterly reports for fiscal 2011 will include restated results for the corresponding interim periods of fiscal 2010. All amounts in this Annual Report on Form10-K affected by the restatement adjustments reflect such amounts as restated.

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PART I

Item 1. Business

Overview

Green Mountain Coffee Roasters, Inc. is a leader in the specialty coffee and coffee maker businesses. A significant driver of our growth continues to be sales from our Keurig single-cup brewing system which includes our Keurig^® single-cup brewer, K-Cup^® portion packs used by the system, as well as related accessories. We manage our operations through two business segments, the Specialty Coffee business unit (“SCBU”) and the Keurig business unit (“Keurig”). See Note 10, Segment Reporting, of the Notes to Consolidated Financial Statements included in this Annual Report.

SCBU sources, produces and sells more than 200 varieties of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs, for use both at-home (“AH”) and away-from-home (“AFH”). These varieties are sold primarily in North American wholesale channels, including supermarkets and convenience stores, in restaurants and hospitality, to office coffee distributor and directly to consumers via its website www.greenmountaincoffee.com. In addition, SCBU sells Keurig single-cup brewers and other accessories directly to consumers and to supermarkets.

Keurig, a pioneer and leading manufacturer of gourmet single-cup brewing systems, targets its premium patented single-cup brewing systems for use both AH and AFH, mainly in North America. Keurig sells AH single-cup brewers, accessories and coffee, tea, cocoa and other beverages in K-Cup portion packs produced by SCBU and other licensed roasters to retailers by principally processing its sales orders through fulfillment entities for the AH channels. Keurig sells AFH single-cup brewers to distributors for use in offices. Keurig also sells AH brewers, a limited number of AFH brewers and K-Cup portion packs directly to consumers via its website, www.keurig.com.

Corporate Information

Green Mountain Coffee Roasters, Inc. is a Delaware corporation formed in July 1993. Our corporate offices are located at 33 Coffee Lane, Waterbury, Vermont 05676. The main telephone number is (802) 244-5621, and our e-mail address for investor information is investor.services@gmcr.com. The address of our Company’s website is www.GMCR.com.

Corporate Objective and Philosophy

Our Company’s objective is to be a leader in the coffee business by selling high-quality, premium coffee and innovative coffee brewing systems that consistently provide a superior coffee experience.

Our purpose statement: “We create the ultimate coffee experience in every life we touch from tree to cup—transforming the way the world views business” guides our strategy and execution.

Essential elements of our philosophy and approach include:

High-Quality Coffee. We are passionate about roasting great coffees and are committed to ensuring that our customers have an outstanding coffee experience. We buy some of the highest-quality Arabica beans available from the world’s coffee-producing regions and use a roasting process designed to optimize each coffee’s individual taste and aroma.

Single-Cup Brewing Patented Technology. The Company holds U.S. and international patents covering a range of its portion pack, packaging line and brewing technology innovations, with additional patent applications in

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process. Our patented single-cup brewing technology, embodied in our portfolio of premium quality machines, provides the benefits of convenience, variety and great taste with no mess or coffee or other beverage waste. The Keurig gourmet single-cup system is based on three fundamental elements:

• Patented and proprietary K-Cup^® portion packs, which contain precisely portioned amounts of gourmet coffees, cocoa, teas and other beverages in a sealed, low oxygen environment to ensure freshness.

• Specially designed proprietary high-speed packaging lines that manufacture K-Cup portion packs at the coffee roasters’ facilities using freshly-roasted and ground coffee as well as tea, cocoa and other beverages.

• Premium quality brewers that precisely control the amount, temperature and pressure of water to provide a cup of coffee, tea, cocoa or other beverage of a consistent high quality in less than a minute when used with K-Cup portion packs.

While the brewing system has been designed and optimized for producing consistent, high-quality coffee, we have expanded our beverage selection to include other beverages such as brew-over-ice teas. We believe these new beverages may help to increase brewer usage occasions within a Keurig household or office.

Through K-Cup portion packs, we offer the industry’s widest selection of gourmet branded coffees, teas, cocoas and other beverages in a proprietary single-cup format. Consumers can choose from over a dozen gourmet brands and over 200 varieties of K-Cup portion packs. Brands that are packaged and sold by SCBU include:

• Barista Prima^®

• Café Escapes^®

• Caribou Coffee^®

• Celestial Seasonings^®

• Coffee People^®

• Diedrich^®

• Donut House^®

• Emeril’s^®

• Gloria Jean’s^®

• Green Mountain Coffee^®

• Green Mountain Naturals^TM

• Kahlua^®

• Newman’s Own^® Organics

• Timothy’s^®

• Tully’s^®

• revv^TM

The Newman’s Own^® Organics, Caribou Coffee^®, Celestial Seasonings^®, Kahlua^®, Emeril’s^® and Gloria Jean’s^® brands are licensed to us for our exclusive use in the Keurig single-cup brewing system.

On September 14, 2010, we announced a share purchase agreement pursuant to which we agreed to acquire all of the outstanding shares of LJVH Holdings, Inc. (“Van Houtte”), from Littlejohn & Co., LLC, a private equity firm headquartered in Greenwich, CT, for a cash purchase price of $915.0 million Canadian dollars or $890.0 million U.S. dollars, based upon an exchange rate as of September 13, 2010, subject to adjustment. The transaction will

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include the Van Houtte^® brand and its licensed Bigelow^® and Wolfgang Puck^® brands. We have received two of the three required regulatory approvals necessary to complete this transaction. We remain confident that we will receive the final regulatory approval so that we can close the transaction by December 31, 2010.

In addition to the brands that are packaged and sold by SCBU in K-Cup^® portion packs, Keurig has partnered with Twinings^® (for tea) and most recently in fiscal 2010, The J.M. Smucker Company (for coffee) to offer their respective brands of tea or coffee in K-Cup portion packs under the Twinings^®, Folgers^® Gourmet Selections^TM and Millstone^® brands.

Production and Distribution. The Company seeks to create customers for life. We believe that coffee and other beverages are convenience purchases, and we utilize our multi-channel distribution network of wholesale, retail and consumer direct options to make our products widely and easily available to consumers.

We operate production and distribution facilities in the United States and Canada; particularly in Castroville, California; Essex, Waterbury and Williston, Vermont; Knoxville, Tennessee; Sumner, Washington; and Toronto, Canada.

Socially Responsible Business Practices. We view corporate social responsibility as fundamental to our business model and integral to our success. We have a long history of supporting social and environmental initiatives, particularly where we have business interest or expertise, allocating at least 5% of our pretax income towards philanthropic efforts. These projects typically involve direct or indirect financial support, donations of products or equipment, and employee volunteer efforts.

Corporate Culture. Our Code of Ethics is an important part of our culture and is applicable to all of our employees and our Board of Directors. The Code of Ethics is posted on our website. In addition, we believe the Company has a highly inclusive and collaborative work environment that encourages employees’ individual growth and personal awareness through a culture of personal accountability and continuous learning.

The Products

Coffee

The Company offers high-quality Arabica bean coffee including single-origin, Fair Trade Certified™, organic, flavored, limited edition and proprietary blends. We carefully select our coffee beans and appropriately roast the coffees to optimize their taste and flavor differences. Our coffee comes in a variety of package types including bagged (whole bean and ground), fractional packages (for food service and office environments), and single-cup Keurig K-Cup^® portion packs.

In 2010, the Company introduced revv and revv Pulse, two new K-Cup portion packs targeting consumers of energy drinks. Using 100% Arabica coffee to create a stimulating cup of rich body, smooth balance and high-octane energy, revv and revv Pulse, with ginseng and guarana, were designed to appeal to the same active consumers that made energy drinks the fastest growing beverage category in the U.S. Also in 2010, we introduced our first varieties of brew-over-ice Iced Coffee K-Cup portion packs, specially formulated and portioned to provide a quality iced-coffee beverage when brewed over ice using a Keurig brewer.

In fiscal 2010, approximately 27% of our coffee purchases were from Fair Trade certified sources.

Tea

The Company has an exclusive licensing agreement with Celestial Seasonings to produce Celestial Seasonings ^® branded teas and Perfect Iced Tea^® in K-Cup^® portion packs.

In September 2010, the Company introduced its first tea offering in a K-Cup portion pack made with paper.

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We believe K-Cup portion packs made with renewable resources like paper represent a positive step toward more sustainable alternatives to our portion pack technology and our overall commitment to corporate social responsibility.

Other Beverages

In addition to coffee and tea, we also produce and sell apple cider, cocoa and other dairy-based beverages in K-Cup portion packs including chai latte and mocha varieties.

Brewers

We are an emerging leader in sales of coffee makers and single-cup brewing systems. As of the end of our 2010 fiscal year, we had the top 4 best selling coffee makers according to NPD consumer market research data. Under the Keurig^® brand name, we offer a variety of brewers that are differentiated by channel and size for the AFH channel, and by features of the brewer for the AH channel. Keurig also offers a selection of brewers for the hospitality, wholesale club and consumer direct channels.

In addition, Keurig maintains license agreements under which licensees (Breville Group Limited selling a “Breville^®” branded brewer; Jarden, Inc. selling a “Mr. Coffee^®” branded brewer, and Conair, Inc. selling a “Cuisinart^®” branded brewer) manufacture, market and sell coffee makers co-branded with Keurig-brewing technology.

Accessories

We offer a variety of accessories for the Keurig single-cup brewing system including K-Cup portion pack storage racks and baskets, a My K-Cup reusable cartridge, and brewer carrying cases. We also sell other coffee-related equipment and accessories, gift assortments, hand-crafted items from coffee-source countries and Vermont, and gourmet food items covering a wide range of price points. These products are sold to consumers directly and through retail channels.

Marketing and Distribution

To better support customer acquisition and existing customer growth in our primary geographic region of North America, the Company currently utilizes separate selling organizations and different selling strategies for each of our multiple channels of distribution. Both Keurig and SCBU operate in the AH, AFH and consumer direct channels within the Company’s primary geographic region of North America.

In the AH channel, Keurig targets gourmet coffee drinkers who wish to enjoy the speed and convenience of single-cup brewing but who do not want to compromise on taste. Keurig promotes its AH brewing system through primarily upscale specialty and department store retailers, but also through select wholesale clubs and mass merchants, and on its website. Recently, Keurig has been using national television advertising to promote its AH brewing system as well. Keurig relies on a single order fulfillment entity, M.Block & Sons (“MBlock”), to process the majority of sales orders for its AH single-cup business with retailers in the United States. In addition, Keurig relies on a single order fulfillment entity to process the majority of sales orders for its AH single-cup business with retailers in Canada. In both the U.S. and Canada, Company personnel work closely with their key retail channel entities on product plans, placement and initiatives, marketing programs and other product sales support. SCBU markets and sells K-Cup^® portion packs for use in the Keurig system, as well as other package formats, such as bagged coffee, for use in AH applications. SCBU sells some products to Keurig for resale to retailers, and also sells its products directly to other channels such as supermarkets and grocery stores. For a more comprehensive description of Keurig’s distribution in the AH channel, see the Company’s revenue recognition policy in Note 2, Significant Accounting Policies—Revenue Recognition of the Notes to Consolidated Financial Statements included in this Annual Report.

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Our sales processed by MBlock to Bed Bath & Beyond of our AH brewers, accessories and K-Cup portion packs represented approximately 14% of the Company’s consolidated net sales for fiscal 2010 and fiscal 2009. If Bed Bath & Beyond reduces its demand for our products or it is unable to perform its financial obligations to MBlock, whether due to a deterioration in its financial condition, integrity or failure of its business systems or otherwise, it could result in significant losses to MBlock that, in turn, could materially adversely affect us.

In the AFH channel, Keurig primarily targets the office coffee channel with a broad offering of single-cup brewing systems that significantly upgrade the quality of the coffee served in the workplace. Keurig promotes its AFH brewing system through a broad, selective, but non-exclusive, network of AFH distributors in the U.S. and Canada ranging in size from local to national. The Company also sells direct to small offices through its e-commerce platform. SCBU works within the AFH channel to market and sell its coffee and beverage products to the office coffee channel through those AFH distributors, as well as through its own e-commerce solutions. Beyond the office coffee channel, the Company is active in marketing and selling its products to other AFH channels such as foodservice, convenience and hospitality.

Both Keurig and SCBU operate websites for consumer direct business. This channel provides the opportunity to effectively position the Company’s brands by test-marketing new products, building one-on-one relationships, and having direct correspondence with consumers, all of which gives the ability to illuminate the Company’s points of difference.

Growth Strategy

Over the last several years the primary growth in the coffee industry has come from the specialty coffee category, including demand for single-cup specialty coffee. This growth has been driven by the wider availability of high-quality coffee, the emergence of upscale coffee shops throughout the country, and the general level of consumer knowledge of, and appreciation for, coffee quality and variety. The Company has been benefiting from the overall industry trend in addition to what we believe to be our carefully developed and distinctive advantages over our competitors.

Our growth strategy involves developing and managing marketing programs to drive brewer adoption in North American households and offices in order to generate ongoing demand for K-Cup portion packs. As part of this strategy, we work to sell our AH brewers approximately at cost, or sometimes at a loss when factoring in the incremental costs related to sales, including fulfillment charges, returns and warranty expense. In addition, we have license agreements with Breville Group Limited, Jarden Inc., producer of Mr. Coffee^® brand coffee makers, and Conair, Inc., producer of Cuisinart^® brand coffee makers, under which each produce, market and sell coffee makers co-branded with Keurig-brewing technology.

Accordingly, our growth has been driven predominantly by the growth and adoption of the Keurig single-cup brewing system. In fiscal 2010, 88% of our consolidated net sales could be attributed to the combination of K-Cup portion pack, brewer, related accessory and third party licensed royalty sales.

We are focused on building our brands and profitably growing our business. We believe we can continue to grow sales by increasing customer awareness in existing regions, expanding into new geographic regions, expanding sales in high-growth industry segments such as single-cup coffee, tea, and other beverages and selectively pursuing other opportunities, including strategic acquisitions. Over the past two years, we have completed acquisitions of our historic licensed roasters to ensure adequate capital investment in the growth and expansion of K-Cup^® portion packs and to better serve our consumers by further strengthening our diverse distribution channels. These acquisitions include:

• In September 2010, we announced our intent to acquire LJVH Holdings, Inc. owner of Van Houtte^® and other brands, based in Montreal, Canada. We believe this acquisition provides significant growth opportunities, particularly in Canada, and further advances our objective of becoming a leader in the competitive coffee and coffee maker business in North America. We have received two of the three

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required regulatory approvals necessary to complete this transaction. We remain confident that we will receive the final regulatory approval so that we can close the transaction by December 31, 2010.

• In May 2010, we acquired Diedrich Coffee, Inc. (“Diedrich”) which enables us to more effectively reach consumers in the southern California region and to take advantage of manufacturing and distribution synergies in that region. The acquisition included Diedrich Coffee^® and Coffee People^® brands and a perpetual royalty-free license for the Gloria Jean’s^® coffee brand in K-Cup portion packs.

• In November 2009, we acquired Timothy’s Coffees of the World Inc. (“Timothy’s”), through which we acquired the rights to the Timothy’s^® World Coffee brand and wholesale business as well as licensed brands Kahlua^® and Emeril’s^®. Located in Toronto, Canada, the acquisition of Timothy’s enabled geographic expansion with a Canadian brand platform that includes manufacturing and distribution synergies in that region.

• In March 2009, we acquired certain assets of the Tully’s Coffee Corporation (“Tully’s”) including the Tully’s coffee brand and certain assets of its wholesale business. The acquisition enabled geographic expansion in the western states.

On September 28, 2010, we issued 8.6 million shares for $250.0 million pursuant to a common stock purchase agreement with Luigi Lavazza S.p.A (“Lavazza”). In addition, we announced our intent to reach a further agreement with Lavazza to co-develop new single-serve espresso machine that would complement our Keurig single-cup brewers.

In addition, we continue to examine opportunities for partnerships with other strong national/regional brands to create additional K-Cup products that will help augment consumer demand for the Keurig single-cup brewing system. In February 2010 we announced a multi-year manufacturing and distribution agreement under which GMCR will manufacture K-Cup portion packs for certain coffee brands owned by The J.M. Smucker Company (“Smucker”), including Folgers^®, Gourmet Selections^® and Millstone^®. Smucker is a leader in the U.S. retail coffee business with its brands Folgers, Folgers Gourmet Selections, and Millstone, selling a variety of Folgers Gourmet Selections and Millstone K-Cup portion packs to consumers in the U.S. and Canada since September 2010 through grocery stores, mass merchandisers, drugstores, and wholesale clubs, as well as through Smucker retail websites. Our Keurig business unit also has the ability to market and sell Smucker coffee brands of K-Cup portion packs direct to consumers via its website. While to some extent these brands compete against GMCR-owned K-Cup portion packs, we believe they have the potential to aid brewer and system adoption.

Competition

We compete in the coffee and coffeemaker markets.

The specialty coffee segment of the coffee industry is highly competitive and fragmented. Within it we compete against larger companies that possess greater marketing and operating resources than our Company. The primary methods of competition in specialty coffee include price, service, product performance and brand differentiation. Our Company competes against all sellers of specialty coffee, including Dunkin’ Brands, Inc., Peet’s Coffee & Tea, Inc. and Starbucks Corporation. When selling to supermarkets, we also compete with “commercial” coffee roasters, to the extent that we are also trying to “upsell” consumers into the specialty coffee segment. Some multi-national consumer goods companies have divisions or subsidiaries selling specialty coffees. For example, The J.M. Smucker Company distributes both Folgers^® and premium Millstone^® and Brothers™ brands, as well as Dunkin’ Donuts packaged coffees by license. Nestle S.A. markets the premium Nespresso^® single-cup espresso system as well as other less premium coffee brands. When selling direct to consumers, we compete with established roasters such as Gevalia^®, a division of Kraft Foods, Inc., as well as with other direct mail companies. In foodservice, we compete against private label roasters, as well as brands such as Seattle’s Best Coffee^® and Starbucks^®.

Similar to specialty coffee, the coffeemaker industry is also highly competitive, and we compete against larger companies that possess greater marketing and operating resources than the Company. The primary methods of

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competition are essentially the same as in specialty coffee; price, product performance and brand differentiation. Through Keurig, our Company also competes against all sellers of coffeemakers, including companies that produce traditional pot-brewed coffeemakers such as:

• Bunn-O-Matic Corporation

• Mars, Inc. (through its FLAVIA^® unit)

• Conair, Inc.

• Jarden Corporation

• Phillips Electronics NV

• Robert Bosch GmbH

The Company also competes within the small but growing single-cup segment of the coffeemaker industry with other single-cup coffee and tea delivery systems, including:

• FLAVIA^® Beverage Systems (manufactured and marketed by Mars, Inc.)

• Nescafe Dolce-Gusto brewing system (manufactured and marketed by Nestle S.A.)

• SENSEO^® brewing system (manufactured and marketed by Philips Electronics NV and Sara Lee Corporation)

• TASSIMO beverage system (manufactured and marketed by Robert Bosch GmbH and Kraft Foods, Inc.)

We expect competition in specialty coffee and coffeemakers to remain intense, both within our existing customer base and as we expand into new regions. In both specialty coffee and coffeemakers, we compete primarily by providing high-quality coffee and single-cup coffeemakers, easy access to our products, superior customer service and a comprehensive approach to customer relationship management. We believe that our ability to provide a convenient and broad network of outlets from which to purchase our products is an important factor in our ability to compete. Through our multi-channel distribution network of wholesale, retail and consumer direct operations, with particular emphasis for SCBU on brand trial through K-Cup^® portion packs, we believe we differentiate ourselves from many of our larger competitors, who specialize in only one primary channel of distribution. We also believe that SCBU’s product offering is distinctive because we offer a wide array of coffees, including flavored, Fair Trade Certified^TM, and organic coffees. We also offer products that feature licensed brands, including Newman’s Own^® Organics, Celestial Seasonings^®, Caribou Coffee^®, Kahlua^®, Emeril’s^® and Gloria Jean’s^®. Through Keurig, we believe our constant innovation and focus on quality, all directed to delivering a consistently superior cup of coffee, differentiates us among competitors in the single-cup coffeemaker industry. We also seek to differentiate ourselves through our socially- and environmentally-responsible business practices. While we believe we currently compete favorably with respect to all of these factors, there can be no assurance that we will be able to compete successfully in the future.

Green Coffee Cost and Supply

SCBU roasted and sold approximately 70 million pounds of coffee in fiscal 2010. We utilize a combination of outside brokers and direct relationships with farms, estates, cooperatives and cooperative groups for our supply of green coffees. Outside brokers provide the largest supply of our green coffee. The supply and price of coffee are subject to high volatility. Supply and price of all coffee grades are affected by multiple factors, such as weather, pest damage, politics, competitive pressures, the relative value of the United States currency and economics in the producing countries.

Cyclical swings in commodity markets are common and the most recent years have been especially volatile for the “C” price of coffee (the price per pound quoted by the Intercontinental Exchange). The “C” price of coffee reached a multi-year high during fiscal 2010 and it is expected that coffee prices will remain volatile in the coming years. In addition to the “C” price, coffee of the quality sought by us tends to trade on a negotiated basis

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at a substantial premium or “differential” in addition to the “C” price, depending on the supply and demand at the time of purchase. These differentials also are subject to significant variations, due to many of the same factors as for other high quality Arabica coffee beans, and have generally been on the rise in recent years.

We generally fix the price of our coffee contracts for approximately two fiscal quarters, and at times three fiscal quarters, prior to delivery so that we have the ability to adjust our sales prices to marketplace conditions if required. SCBU believes this approach is the best way to provide our customers with a fair price for our coffee and mitigate volatility risk. On September 25, 2010, we had approximately $204.0 million in green coffee purchase commitments, of which approximately 54% had a fixed price. In addition, from time to time we purchase coffee futures contracts and coffee options when we are not able to enter into coffee purchase commitments or when the price of a significant portion of committed contracts has not been fixed. On September 25, 2010, we did not have any outstanding futures contracts.

In fiscal 2010, approximately 27% of our purchases were from Fair Trade certified sources. This provides an assurance that farmer groups are receiving the Fair Trade minimum price and an additional premium for certified organic products. In fiscal 2010, 38% of our purchases were from farm-identified sources, which means that we know the farms, estates or coops, and can develop a relationship directly with the farmers. We believe that our “farm-identified” strategy helps us secure long-term supplies of high-quality coffee.

Intellectual Property

The Company owns a number of United States trademarks and service marks that have been registered with the United States Patent and Trademark Office. We anticipate maintaining our trademark and service mark registrations with the United States Patent and Trademark Office. We also own other trademarks and service marks for which we have applications for U.S. registration. The Company has further registered or applied for registration of certain of its trademarks and service marks in the United Kingdom, the European Union, Canada, Japan, the People’s Republic of China, South Korea, Taiwan and other foreign countries. The Company has licenses to use other marks, all subject to the terms of the agreements under which such licenses are granted.

The Company holds U.S. patents and international patents related to our Keurig^® brewing and portion pack technology. Of these, a majority are utility patents and the remainder are design patents. We view these patents as very valuable but do not view any single patent as critical to the Company’s success. We own patents that cover significant aspects of our products and certain patents of ours will expire in the near future. In the United States, patents associated with our current generation K-Cup^® portion packs presently used in Keurig brewers will expire in 2012 and 2017. We also have pending patent applications associated with current K-Cup portion pack technology which, if ultimately issued as patents, would extend coverage over all or some portion of K-Cup portion packs, and have expiration dates extending to 2023. These applications may not issue, or if they issue, they may not be enforceable, may be challenged, invalidated or circumvented by others. Additionally, we have a number of portion pack patents that extend to 2021 but which we have elected not to commercialize yet and may never commercialize. In addition, Keurig continues to invest in further innovation in portion packs and brewing technology that will enhance our current patents or that may lead to new patents and takes steps it believes are appropriate to protect all such innovation.

We have diligently protected intellectual property through the use of domestic and international patents and trademark registrations and through enforcing our rights in litigation. We regularly monitor commercial activity in the countries in which we operate to guard against potential infringement.

Seasonality

Historically, we have experienced variations in sales from quarter-to-quarter due to the holiday season and a variety of other factors, including, but not limited to, general economic trends, the cost of green coffee, competition, marketing programs and weather. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

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Employees

As of September 25, 2010, the Company had 2,380 full-time employees. We supplement our workforce with temporary workers from time to time, especially in the first quarter of each fiscal year to service increased customer and consumer demand during the peak November-December holiday season and January-March post-holiday season.

Available information

Our Company files annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934 (the “Exchange Act”). The public may read and copy any materials that the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including GMCR, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov.

Our Company maintains a website at www.GMCR.com. Our filings with the SEC, including without limitation, our Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, are available through a link maintained on our website under the heading “Investor Relations—Financial Information.” Information contained on our website is not incorporated by reference into this report. Previously filed Annual Reports on Form 10-K and quarterly reports on Form 10-Q for the periods affected by the restatement have not been amended. Accordingly, investors should no longer rely upon the Company’s previously released financial statements for these periods and any earnings releases or other communications relating to these periods.

Item 1A. Risk Factors

Risks Related to the Company’s Business

The Company’s business, its future performance and forward-looking statements are affected by general industry and marketplace conditions and growth rates, general U.S. and non-U.S. economic and political conditions (including the global economy), competition, interest rate and currency exchange rate fluctuations and other events. The following items are representative, but not all inclusive, of the risks, uncertainties and other conditions that may impact our business, future performance and the forward-looking statements that we make in this report or that we may make in the future.

Risks Related to Our Operations

Our financial performance is highly dependent upon the sales of K-Cup^® portion packs.

A significant and increasing percentage of our total revenue has been attributable to sales of K-Cup portion packs for use with our Keurig^® single-cup brewing systems. In fiscal 2010, total consolidated net sales of K-Cup portion packs and related accessories, Keurig brewers and royalties earned upon shipment of K-Cup portion packs by third party licensed roasters represented approximately 88% of consolidated net sales. Continued acceptance of Keurig Single-Cup brewing systems and sales of K-Cup portion packs to our installed base of brewers are significant factors in our growth plans. Any substantial or sustained decline in the acceptance of Keurig Single-Cup brewing systems or sales of our K-Cup portion packs would materially adversely affect us. Keurig’s single cup brewing system competes against all sellers of coffeemakers, including companies such as Bunn-O-Matic Corporation, Mars, Inc. (through its FLAVIA^® unit), Conair, Inc., Jarden Corporation, Phillips Electronics NV and Robert Bosch GmbH. The Company also competes within the small but growing single-cup segment of the coffeemaker industry with other single-cup coffee and tea delivery systems, including: FLAVIA^®

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Beverage Systems (manufactured and marketed by Mars, Inc.), the Nescafe Dolce-Gusto beverage system (manufactured and marketed by Nestle S.A.), the SENSEO^® brewing system (manufactured and marketed by Philips Electronics NV and Sara Lee Corporation), the TASSIMO beverage system (manufactured and marketed by Robert Bosch GmbH and Kraft Foods, Inc.), and a number of additional single-cup pod brewing systems and brands. If we do not succeed in effectively differentiating ourselves from our competitors, based on technology or otherwise, or our competitors adopt our strategies, then our competitive position may be weakened and our sales of Keurig Single-Cup brewing systems and K-Cup portion packs, and accordingly our profitability, may be materially adversely affected.

Our intellectual property may not be valid, enforceable, or commercially valuable.

While we make efforts to develop and protect our intellectual property, the validity, enforceability and commercial value of our intellectual property rights may be reduced or eliminated by the discovery of prior inventions by third parties, the discovery of similar marks previously used by third parties, the successful independent development by third parties of the same or similar confidential or proprietary innovations or changes in the supply or distribution chains that render our rights obsolete.

Many factors bear upon the exclusive ownership and exploitation right to intellectual properties, including, without limitation, prior rights of third parties, nonuse and/or nonenforcement by us, and/or related entities. Our ability to compete effectively depends, in part, on our ability to maintain the proprietary nature of our technologies, which include the ability to obtain, protect and enforce patents and other trade secrets and know how relating to our technology. We own patents that cover significant aspects of our products and certain patents of ours will expire in the near future. In the United States, patents associated with our current generation K-Cup^® portion packs presently used in Keurig brewers will expire in 2012 and 2017. We also have pending patent applications associated with current K-Cup portion pack technology which, if ultimately issued as patents, would extend coverage over all or some portion of K-Cup portion packs, and have expiration dates extending to 2023. These applications may not issue, or if they issue, they may not be enforceable, may be challenged, invalidated or circumvented by others. Additionally, we have a number of portion pack patents that extend to 2021 but which we have elected not to commercialize yet and may never commercialize. In addition, Keurig continues to invest in further innovation in portion packs and brewing technology that will enhance our current patents or that may lead to new patents and takes steps it believes are appropriate to protect all such innovation. We are prepared to protect our patents vigorously; however, there can be no assurance that we will prevail in any intellectual property infringement litigation we institute to protect our intellectual property rights given the complex technical issues and inherent uncertainties in litigation. Even if we prevail in litigation, such litigation could result in substantial costs and diversion of resources and could materially adversely affect us. In addition, the validity, enforceability and value of our intellectual property depends in part on the continued maintenance and prosecution of such rights through applications, maintenance documents, and other filings, and rights may be lost through the intentional or inadvertent failure to make such necessary filings. Similarly, third parties may allege that our activities violate their intellectual properties. To the extent we are required to defend our self against such a claim, no assurance can be given that we will prevail. Such defense could be costly and materially adversely affect our business and prospects.

Competition in specialty coffee is intense and could affect our sales and profitability.

The specialty coffee business is highly fragmented. Competition in specialty coffee is increasingly intense as relatively low barriers to entry encourage new competitors to enter the marketplace. In addition, we believe that maintaining and developing our brands is important to our success and the importance of brand recognition may increase to the extent that competitors offer products similar to ours. Many of our current and potential competitors have substantially greater financial, marketing and operating resources and access to capital than we do. Our primary competitors in specialty coffee include Dunkin’ Brands Inc., Peet’s Coffee & Tea and Starbucks Corporation. There are numerous smaller, regional brands that also compete in the specialty coffee business. In

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addition, we compete indirectly against all other coffee brands in the marketplace. A number of nationwide coffee marketers, such as Kraft Foods, Inc., Nestlé USA, Procter & Gamble, Inc., and Sara Lee Corporation are distributing premium coffee brands in supermarkets. These premium coffee brands may serve as substitutes for our coffee. If we do not succeed in effectively differentiating ourselves from our competitors in specialty coffee, including by developing and maintaining our brands, or our competitors adopt our strategies, then our competitive position may be weakened and our sales of specialty coffee, and accordingly our profitability, may be materially adversely affected.

Because all of our single-cup brewers are manufactured by a single manufacturer in China, a significant disruption in the operation of this manufacturer, political unrest or significant economic uncertainty in China could materially adversely affect us.

We have only one manufacturer of single-cup brewers. Any disruption in production or inability of our manufacturer to produce adequate quantities to meet our needs, whether as a result of a natural disaster or other causes, could significantly impair our ability to operate our business on a day-to-day basis. Furthermore, our manufacturer is located in China. This exposes us to the possibility of product supply disruption and increased costs in the event of changes in the policies of the Chinese government, political unrest or unstable economic conditions in China, or developments in the U.S. that are adverse to trade, including enactment of protectionist legislation. Any of these matters could materially adversely affect us.

Product recalls and/or product liability may adversely impact us.

We are subject to regulation by a variety of regulatory authorities, including the Consumer Product Safety Commission and the Food and Drug Administration. In the event our manufacturer of single-cup brewers, which is located in China, does not adhere to product safety requirements or our quality control standards, we might not identify a deficiency before brewers ship to our customers. The failure of our third party manufacturer to produce merchandise that adheres to our quality control standards could damage our reputation and brands and lead to customer litigation against us. If our manufacturer is unable or unwilling to recall products failing to meet our quality standards, we may be required to remove merchandise or issue voluntary or mandatory recalls of those products at a substantial cost to us. We may be unable to recover costs related to product recalls. We also may incur various expenses related to product recalls, including product warranty costs, sales returns, and product liability costs, which may have a material adverse impact on our results of operations. While we maintain a reserve for our product warranty costs based on certain estimates and our knowledge of current events and actions, our actual warranty costs may exceed our reserve, resulting in a need to increase our accruals for warranty costs in the future. In particular, during fiscal 2010, we experienced higher warranty returns associated with certain brewer models, which we believe was related to a component used in limited production runs in certain of our brewer models during late 2009. We are replacing affected brewers and have implemented hardware and software changes, which we believe have corrected the issue. However, there can be no assurance that we will not experience additional warranty expense related to this quality issue in future periods.

Our increasing reliance on a limited number of specialty farms could impair our ability to maintain or expand our business.

Because an increasing amount of our supply of Arabica coffee beans comes from specifically identified specialty farms, estates, and cooperatives, we are more dependent upon a limited number of suppliers than some of our competitors. In fiscal 2010, approximately 38% of our green coffee purchases were “farm-identified.” The timing of these purchases is dictated by when the coffee becomes available (after the annual crop), which does not always coincide with the period in which we need green coffee to fulfill customer demand. This can lead to higher and more variable inventory levels. Any deterioration of our relationship with these suppliers, or problems experienced by these suppliers, could lead to inventory shortages. In such case, we may not be able to fulfill the demand of existing customers, supply new customers, or expand other channels of distribution. A raw material shortage could result in decreased revenue or could impair our ability to maintain or expand our business.

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Our business is highly dependent on sales of specialty coffee, and if demand for specialty coffee or our product offerings decrease, our business would suffer.

Substantially all of our revenues are dependent on demand for specialty coffee. In addition, demand for specialty coffee is a driving factor in the sales of our Keurig^® single-cup brewing systems. Demand for specialty coffee and demand for our Keurig Single-Cup brewing systems is affected by many factors, including:

• Changes in consumer tastes and preferences;

• Changes in consumer lifestyles;

• National, regional and local economic conditions;

• Perceptions or concerns about the environmental impact of our products;

• Demographic trends; and

• Perceived or actual health benefits or risks.

Because we are highly dependent on consumer demand for specialty coffee, a shift in consumer preferences away from specialty coffee or our product offerings would harm our business more than if we had more diversified product offerings. If customer demand for our specialty coffee decreases, our sales would decrease and we would be materially adversely affected.

Our roasting methods are not proprietary, so competitors may be able to duplicate them, which could harm our competitive position.

We consider our roasting methods essential to the flavor and richness of our coffee and, therefore, essential to our various brands. Because our roasting methods cannot be patented, we would be unable to prevent competitors from copying our roasting methods if such methods became known. If our competitors copy our roasting methods, the value of our brands could be diminished and we could lose customers to our competitors. In addition, competitors could develop roasting methods that are more advanced than ours, which could also harm our competitive position.

We depend on the expertise of key personnel. If these individuals leave or change their role within the Company without effective replacements, our operations could suffer.

The success of our business is dependent to a large degree on our President and Chief Executive Officer, Lawrence J. Blanford, and the other members of our management team. We have an employment agreement with Mr. Blanford that expires on May 3, 2012. If Mr. Blanford or the other members of our management team leave without effective replacements, our ability to implement our business strategy could be impaired.

Our indebtedness could adversely affect our financial health and may limit our ability to use debt to fund future capital needs.

At September 25, 2010, we had total indebtedness of $354.5 million, and we expect to incur substantial additional indebtedness to finance our pending acquisition of Van Houtte. Currently, we intend to finance the acquisition through a combination of cash on hand and $1.45 billion of new debt financing comprised of (i) a $650 million 5-year senior secured revolving credit facility, (ii) a $250 million 5-year senior secured term loan A facility, and (iii) a $550 million 6-year senior secured term loan B facility. These facilities will be utilized to finance this acquisition and transaction expenses, as well as to refinance our existing outstanding indebtedness and support our ongoing growth. In addition, future disruptions in the financial markets, such as have been recently experienced, could affect our ability to obtain new or additional debt financing or to refinance our existing indebtedness on favorable terms (or at all), and have other adverse effects on us. A description of our indebtedness is included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the subheading Liquidity and Capital Resources, included in this Annual Report.

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Our indebtedness could adversely affect our business. Our debt obligations could:

• Increase our vulnerability to general adverse economic and industry conditions;

• Require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes;

• Impair our rights to our intellectual property, which have been pledged as collateral under our credit facility, upon the occurrence of a default;

• Limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby placing us at a competitive disadvantage compared to our competitors that may have less debt; and

• Limit, by the financial and other restrictive covenants in our debt agreements, our ability to borrow additional funds and have a material adverse effect on us if we fail to comply with the covenants in our debt agreements because such failure could result in an event of default which, if not cured or waived, could result in a substantial amount of our indebtedness becoming immediately due and payable.

We are dependent upon access to external sources of capital to grow our business.

Our business strategy contemplates future access to debt and equity financing to fund the expansion of our business. Recent events in the financial markets have had an adverse impact on the credit markets and equity securities, including our common stock, have exhibited a high degree of volatility. While we have been successful in accessing the debt and equity markets in the past, no assurance can be given that we will continue to be able to do so. The inability to obtain sufficient capital to fund the expansion of our business could have a material adverse effect on us. In addition, a downgrade in the rating of our outstanding debt could make it difficult or prohibitively expensive to borrow, which could have a material adverse effect on us.

A significant interruption in the operation of our roasting, manufacturing or distribution capabilities could materially adversely affect us.

We currently roast our coffee in Vermont, Tennessee, Washington, California and Toronto, Canada. We expect to be able to meet current and forecasted demand for the near term. However, if demand increases more than we currently forecast, we will need to either expand our current roasting capabilities internally or acquire additional roasting capacity and the failure to do so in a timely or cost effective manner could have a negative impact on our business. Significant interruption in the operation of our current facilities, whether as a result of a natural disaster or other causes, could significantly impair our ability to operate our business on a day-to-day basis.

In addition, we and other third party licensed coffee roasters manufacture the K-Cup^® portion packs sold for use with our single-cup brewer systems. We manufacture K-Cup portion packs at our Vermont, Tennessee, Washington and California facilities in the United States and in our Toronto facility in Canada, and any significant disruption in our or our licensee’s ability to manufacture adequate quantities of K-Cup portion packs to meet our needs, and those of our licensees whether as a result of a natural disaster or other causes, could adversely affect our business and financial results. We currently have seven distribution facilities located in Vermont, Tennessee, Washington and California. Any disruption to our distribution facilities could significantly impair our ability to operate our business. In addition, because we have our coffee roasting and primary distribution facilities in Vermont, our ability to ship coffee and receive shipments of raw materials could be adversely affected during winter months as a result of severe winter conditions and storms.

Our order processing and fulfillment systems may fail or limit user traffic, which could cause us to lose sales.

We are dependent on our ability to maintain our computer and telecommunications equipment on our Waterbury, Vermont campus in effective working order and to protect against damage from fire, natural disaster, power loss, telecommunications failure or similar events. In addition, growth of our customer base may strain or exceed the

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capacity of our systems and lead to degradations in performance or systems failure. We have experienced capacity constraints in the past that have resulted in decreased levels of customer service, such as increased customer call center wait times and delays in service to customers for limited periods of time. Although we continually review and consider upgrades to our order fulfillment infrastructure and provide for system redundancies to limit the likelihood of systems overload or failure, substantial damage to our systems or a systems failure that causes interruptions for a number of days could adversely affect our business. Additionally, if we are unsuccessful in updating and expanding our order fulfillment infrastructure, our ability to grow may be constrained.

Our reliance on a single order fulfillment entity for our Keurig subsidiary’s at-home business exposes us to significant risk in the United States.

We rely on a single order fulfillment entity, M.Block & Sons, Inc. (“MBlock”), to process the majority of orders for our AH single-cup business sold through to retailers in the United States. For a more comprehensive description of the AH channel, see the Company’s revenue recognition policy in Note 2, Significant Accounting Policies—Revenue Recognition of the Notes to Consolidated Financial Statements included in this Annual Report.

We are subject to significant credit risk regarding the creditworthiness of MBlock and the creditworthiness of its customers. Receivables from MBlock were approximately 47% of our consolidated accounts receivable balance at September 25, 2010.

The inability of MBlock to perform its obligations to us, whether due to a deterioration in its financial condition, integrity or failure of its business systems or otherwise, could result in significant losses that could materially adversely affect us. If our relationship with MBlock is terminated, we can provide no assurance that we would be able to contract with another third party to provide these services to us in a timely manner or on favorable terms or that we would be able to internalize the related services effectively or in a timely manner.

We depend on certain retailers for a substantial portion of our revenues in any fiscal period and the loss of, or a significant shortfall in demand from, these retailers could significantly harm our results of operations.

During any given fiscal period, we are reliant on certain retailers for a substantial portion of our revenues. For example, our sales processed by MBlock to Bed Bath & Beyond of our AH brewers, accessories and K-Cup^® portion packs represented approximately 14% of the Company’s consolidated net sales for fiscal 2010 and fiscal 2009. If Bed Bath & Beyond reduces its demand for our products or it is unable to perform its financial obligations to MBlock, whether due to a deterioration in its financial condition, integrity or failure of its business systems or otherwise, it could result in lower revenues or in significant losses to MBlock that, in turn, could materially adversely affect us.

Because we rely heavily on common carriers to deliver our coffee and brewers, any disruption in their services or increase in shipping costs could adversely affect our business.

We rely on a number of common carriers to deliver coffee and brewers to our customers and distribution centers. We have no control over these common carriers and the services provided by them may be interrupted as a result of labor shortages, contract disputes or other factors. If we experience an interruption in these services, we may be unable to ship our products in a timely manner. A delay in shipping could:

• Have an adverse impact on the quality of the coffee, cocoa or tea shipped, and thereby adversely affect our brands and reputation;

• Result in the disposal of an amount of coffee, cocoa or tea that could not be shipped in a timely manner; and

• Require us to contract with alternative, and possibly more expensive, common carriers.

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Any significant increase in shipping costs could lower our profit margins or force us to raise prices, which could cause our revenue and profitability to suffer.

The failure to successfully integrate Timothy’s and Diedrich’s businesses, or the Van Houtte business assuming completion of the acquisition, into our business may cause us to fail to realize the expected synergies and other benefits expected from these acquisitions, which could significantly affect us.

The integration of our recent and pending acquisitions into our business presents significant challenges and risks to our business, including:

• Distraction of management from regular business concerns;

• Assimilation and retention of employees and customers;

• Managing the operations and employees of these businesses, all of which are distant from our current headquarters and operation locations;

• Expansion into new geographies;

• Integration of technologies, services and products; and

• Achievement of appropriate internal control over financial reporting.

We may fail to successfully complete the integration of these businesses into our business and, as a result, may fail to realize the synergies and other benefits expected from these acquisitions. We may fail to grow and build profits in business lines or achieve sufficient cost savings through the integration of customer service or administrative and other operational activities. Furthermore, we must achieve these objectives without adversely affecting our revenues. If we are not able to successfully achieve these objectives, the anticipated benefits of these acquisitions may not be realized fully or at all, or it may take longer to realize them than expected, and our results of operations could be materially adversely affected.

Diedrich has a history of operating losses, and our ability to achieve and then maintain the profitability of this business line will depend on our ability to manage and control operating expenses and to generate and sustain increased levels of revenue.

Failure to complete the Van Houtte acquisition could require us to pay an up to $91.5 million Canadian dollar reverse break-up fee.

The share purchase agreement we have entered into with respect to the Van Houtte acquisition requires that we pay the sellers a reverse break-up fee if the Van Houtte acquisition is not completed under certain circumstances. If we fail to complete the acquisition due to a breach of our obligations under the share purchase agreement, then we will be required to pay the sellers a reverse break-up fee of $91.5 million Canadian dollars. The share purchase agreement is terminable by either us or the sellers if the acquisition is not completed on or prior to December 31, 2010, except that if the acquisition is not completed on or prior to December 31, 2010 due to regulatory approvals having not been obtained by that date, the termination date will be extended to March 31, 2011.

Strategic investments or acquisitions may result in additional risks and uncertainties in our business.

We may seek to grow our business through opportunistic strategic investments or acquisitions. From time to time we may be in various stages of negotiation with parties relating to the possible investment in or acquisition of businesses or assets. We are unable to predict whether our negotiations will result in any agreement to invest in or acquire a business or an asset or whether any such transaction will be consummated on favorable terms or at all. To the extent we are successful in completing one or more opportunistic strategic investments or acquisitions, we would face numerous risks and uncertainties integrating the relevant businesses and systems, including the

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need to combine accounting and data processing systems and management controls and to retain relationships with customers and business partners. Additionally, we may pursue an acquisition that is not accretive initially due to its long term strategic value.

Exposure to foreign currency risk and related hedging activities may result in significant losses and fluctuations to the periodic income statements.

We are exposed to significant foreign currency exchange risk related to the pending purchase of Van Houtte. This material commitment denominated in foreign currency, as well as the hedging activities entered into to mitigate the associated risk, could result in material losses to the income statement and cash flow statement until the acquisition is closed. Additionally, on an ongoing basis, we expect to have increasing foreign currency risk associated with cash flows from foreign subsidiaries, foreign currency purchase commitments, and foreign currency intercompany debt. We expect to enter into derivatives contracts to mitigate these risks. However, there can be no assurance that these contracts will effectively protect us from fluctuations in foreign currency exchange rates, and we may incur material losses from such hedging transactions.

Due to the seasonality of many of our products and other factors, our operating results are subject to quarterly fluctuations.

Historically, we have experienced increased sales of our Keurig^® single-cup brewing systems in our first fiscal quarter due to the holiday season. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. The impact on sales volume and operating results due to the timing and extent of these factors can significantly impact our business. For these reasons, quarterly operating results should not be relied upon as indications of our future performance.

We may not be able to enter into license agreements with coffee roasters and other third parties to manufacture, distribute and sell K-Cup^® portion packs or maintain our current license agreements, or it may be expensive to do so. In addition, our current licensees may fail to perform their obligations under existing licensing agreements.

We license the right to manufacture, distribute and sell K-Cup portion packs on an exclusive or non-exclusive basis to gourmet coffee roasters and tea packers in return for royalty payments from the licensees when they ship the K-Cup portion packs. Although many licensees are willing to enter into such licensing agreements, there can be no assurance that such agreements will be negotiated on terms favorable to us, or at all. In addition, our current licensees may fail to perform their obligations under such licensing agreements due to operational disruptions, economic hardship or bankruptcy. Our failure to enter into similar licensing agreements in the future or the failure of our licensees to perform their obligations under existing license agreements could limit our ability to develop and sell our products and could cause our business to suffer.

We also have an exclusive coffee license agreement with Newman’s Own^® Organics and an exclusive tea license agreement with Celestial Seasonings^®. We produce lines of several co-branded Newman’s Own Organics coffees and co-branded Celestial Seasonings teas .. Recently we announced a multi-year manufacturing and distribution agreement under which we will manufacture K-Cup portion packs for certain coffee brands owned by The J.M. Smucker Company (“Smucker”), including Folgers^®, Gourmet Selections^® and Millstone^®. In addition, from time to time, we enter into licensing agreements to allow for the development, marketing and sale of single-cup brewing systems by other companies. The failure to maintain these agreements could adversely impact our future growth.

We face risks related to the ongoing SEC inquiry.

As previously disclosed, on September 20, 2010, the staff of the SEC’s Division of Enforcement informed the Company that it was conducting an inquiry into matters at the Company. The Company, at the direction of the audit committee of the Company’s board of directors, is cooperating fully with the SEC staff’s inquiry. At this

16

point, we are unable to predict what, if any, consequences the SEC inquiry may have on us. However, the inquiry could result in considerable legal expenses, divert management’s attention from other business concerns and harm our business. If the SEC were to commence legal action, we could be required to pay significant penalties and/or other amounts and could become subject to injunctions, an administrative cease and desist order, and/or other equitable remedies. The filing of our restated financial statements to correct the discovered accounting errors will not resolve the SEC inquiry. Further, the resolution of the SEC inquiry could require the filing of additional restatements of our prior financial statements, and/or our restated financial statements, or require that we take other actions not presently contemplated. We can provide no assurances as to the outcome of the SEC inquiry.

Management’s determination that material weaknesses exist in our internal controls over financial reporting could have a material adverse impact on the Company.

We are required to maintain internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. In Item 9A of this Annual Report, management reports that material weaknesses exist in the Company’s internal control over financial reporting principally related to the Company’s period-end financial reporting and consolidation process. Due to these material weaknesses, management has concluded that as of the end of the period covered by this Annual Report, the Company’s disclosure controls and procedures were not effective. Consequently, and pending the Company’s remediation of the matters that have caused the control deficiencies underlying the material weaknesses, our business and results of operations could be harmed, we may be unable to report properly or timely the results of our operations, and investors may lose faith in the reliability of our financial statements. Accordingly, the price of our securities may be adversely and materially impacted.

Litigation pending against us could materially impact our business and results of operations.

We are currently party to various legal and other proceedings. In particular, numerous putative class actions and stockholder derivative actions have been filed against us in response to our recent disclosures in the Current Reports on Forms 8-K dated September 28, 2010 and November 15, 2010. See Item 3, Legal Proceedings. These matters may involve substantial expense to us, which could have a material adverse impact on our financial position and our results of operations. We can provide no assurances as to the outcome of any litigation.

Risks Related to our Industry

Increases in the cost of high-quality Arabica coffee beans or cost of materials used to produce our brewers could reduce our gross margin and profit.

We utilize a combination of outside brokers and direct relationships with farms, estates, cooperatives and cooperative groups for our supply of green coffees. Outside brokers provide the largest supply of our green coffee. The supply and price of coffee are subject to high volatility. Supply and price of all coffee grades can be affected by multiple factors, such as weather, pest damage, politics, competitive pressures and economics in the producing countries.

Cyclical swings in commodity markets are common and the most recent years have been especially volatile for the “C” price of coffee (the price per pound quoted by the Intercontinental Exchange). The “C” price of coffee reached a multi-year high during fiscal 2010 and it is expected that coffee prices will remain volatile in the coming years. In addition to the “C” price, coffee of the quality sought by us tends to trade on a negotiated basis at a substantial premium or “differential” in addition to the “C” price, depending on the supply and demand at the time of purchase. These differentials also are subject to significant variations, due to many of the same factors as for other high quality Arabica coffee beans, and have generally been on the rise in recent years.

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We generally try to pass on coffee price increases and decreases to our customers. Due to the recent increase in “C” prices, we announced in September 2010, a price increase on all K-Cup^® portion packs sold in North America to be effective beginning October 11, 2010. There can be no assurance that we will be successful in passing on these cost increases to customers without losses in sales volume or gross margin. Additionally, even if higher green coffee costs can be offset on a dollar-for-dollar basis by price increases, this still lowers our gross margin percentage. Similarly, rapid and sharp decreases in the cost of green coffee could also force us to lower our prices to customers resulting in lower gross margins due to the need to sell products comprised of higher green coffee costs until we would be able to reduce our green coffee inventory and purchase commitments.

Significant fluctuations in the cost of other commodities, such as steel, petroleum and copper influence prices of plastic and other components used in manufacturing our coffee brewers. Approximately 96% of Keurig brewers shipped in fiscal 2010, were sold to the AH channel approximately at cost, or sometimes at a loss, when factoring in the incremental costs related to sales, including fulfillment charges, returns reserve and warranty expense. With respect to the Keurig single-cup AH system, we are continuing to pursue a model designed to penetrate the marketplace, a component of which is to sell brewers at affordable consumer price points in order to attract new customers into single serve coffee. Any rapid, sharp increases in our cost of manufacturing AH brewers would be unlikely to lead us to raise sales prices to offset such increased cost as our current strategy is to drive penetration and not risk slowing down the rate of sales growth as compared to our competitors or before realizing cost reductions in our purchase commitments. There can be no assurance that we will able to sell our AH brewers approximately at cost when such fluctuation occur.

Decreased availability of high-quality Arabica coffee beans could jeopardize our ability to maintain or expand our business.

We roast over 50 different types of green coffee beans to produce more than 100 coffee selections. If one type of green coffee bean were to become unavailable or prohibitively expensive, we believe we could substitute another type of coffee of equal or better quality meeting a similar taste profile. However, a worldwide supply shortage of the high-quality Arabica coffees we purchase could have a material adverse impact on us.

Worldwide or regional shortages of high-quality Arabica coffees can be caused by multiple factors, such as weather, pest damage and economics in the producing countries. In addition, the political situation in many of the Arabica coffee growing regions, including Africa, Indonesia, and Central and South America, can be unstable, and such instability could affect our ability to purchase coffee from those regions. If Arabica coffee beans from a region become unavailable or prohibitively expensive, we could be forced to discontinue particular coffee types and blends or substitute coffee beans from other regions in our blends. Frequent substitutions and changes in our coffee product lines could lead to cost increases, customer alienation and fluctuations in our gross margins.

While production of commercial grade coffee is generally on the rise, many industry experts are concerned about the ability of specialty coffee production to keep pace with demand. Arabica coffee beans of the quality we purchase are not readily available on the commodity markets. We depend on our relationships with coffee brokers, exporters and growers for the supply of our primary raw material, high-quality Arabica coffee beans. In particular, the supply of Fair Trade Certified^TM coffees is limited. We may not be able to purchase enough Fair Trade Certified coffees to satisfy the rapidly increasing demand for such coffees, which could materially adversely affect our revenue growth.

Adverse changes in global and domestic economic conditions or a worsening of the United States economy could materially adversely affect us.

Our sales and performance depend significantly on consumer confidence and discretionary spending, which have recently improved but are still under pressure from United States and global economic conditions. A worsening of the economic downturn and decrease in consumer spending may adversely impact our sales, ability to market our products, build customer loyalty, or otherwise implement our business strategy and further diversify the geographical concentration of our operations. For example, we are highly dependent on consumer demand for

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specialty coffee and a shift in consumer demand away from specialty coffee due to economic or other consumer preferences would harm our business. Keurig brewer sales may also decline as a result of the economic environment. We also have exposure to various financial institutions under coffee hedging arrangements and interest rate swaps, and the risk of counterparty default is currently higher in light of existing capital market and economic conditions.

Increased scrutiny from government agencies which could result in agency investigations or other actions.

Because of the increase in government regulation and oversight, coupled with the expansion of our business generally, and specifically with our expansion into other single-serve beverages, we may come under increased scrutiny from many different government agencies for various reasons. This may cause an agency investigation, whether formal or informal, which will have the result of diverting management attention and time, and other resources, as well as possibly considerable capital resources necessary to manage the investigation, all of which would otherwise have been spent growing and managing the business. In addition, because of the additional governmental regulation, it will become increasingly harder to ensure that all of our activities and products comply with the myriad of applicable regulation, which increases the risk of violations.

Our products must comply with government regulation.

We are subject to USDA regulations with respect to a national organic labeling and certification program. Additionally, amendments to Canada’s Organic Products regulations as administered by the Canada Organic Office of the Canadian Food Inspection Agency became effective in December 2008. Although the implementation period has not yet been defined, we will be required to apply for recertification of our organic products under the new regulations and update any affected packaging. In addition, similar regulations and requirements exist in the other countries in which we may market our products and our organic products are covered by these various regulations. Future developments in the regulation of labeling of organic foods could require us to further modify the labeling of our products, which could affect the sales of our products and thus harm our business.

Furthermore, new government laws and regulations may be introduced in the future that could result in additional compliance costs, seizures, confiscations, recalls or monetary fines, any of which could prevent or inhibit the development, distribution and sale of our products. If we fail to comply with applicable laws and regulations, we may be subject to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, which could have a material adverse effect on us.

We rely on independent certification for a number of our products, the loss of any of which could harm our business.

We rely on independent certification, such as certifications of our products as “organic” or “Fair Trade,” to differentiate our products from others. The Newman’s Own^® Organics product line, combined with SCBU’s own branded Fair Traded Certified^TM coffee line, represented a combined 29% of SCBU’s total consolidated sales volume in fiscal year 2010. The loss of any independent certifications could adversely affect our marketplace position, which could harm our business.

We must comply with the requirements of independent organizations or certification authorities in order to label our products as certified. For example, we can lose our “organic” certification if a manufacturing plant becomes contaminated with non-organic materials or if it is not properly cleaned after a production run. In addition, all raw materials must be certified organic.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our facilities are as follows:

Type	Location	Approximate Square Feet		Owned or Leased		Expiration of Lease
SCBU Manufacturing Space	Knoxville, TN Toronto, Canada Castroville, CA Essex, VT Sumner, WA Waterbury, VT		334,500 36,000 57,500 99,000 197,800 98,000		Owned Leased Leased Leased Leased Leased		—   2014 2015 2012 2015 2017
SCBU Warehouse/ Distribution/ Service/Retail Space	Waterbury, VT Toronto, Canada Castroville, CA Waterbury, VT Waterbury, VT (Factory Outlet) Waterbury, VT (Visitor Center) Williston, VT		72,000 10,000 62,000 3,000 2,000 2,900 199,750		Owned Leased Leased Leased Leased Leased Leased		—   2014 2016 2011 2012 2026 2012
SCBU Administrative and Corporate Offices	Demeritt I, Waterbury, VT Demeritt II, Waterbury, VT Coffee Lane, Waterbury, VT 46 Main Street, Waterbury, VT 152 Main Street, Waterbury, VT Pilgrim Park II, Waterbury, VT Pilgrim Park V, Waterbury, VT 5 New England, Essex, VT 687 Marshall Avenue, Williston, VT		12,000 10,000 3,000 10,900 9,600 22,900 15,000 10,000 24,000		Owned Owned Leased Leased Leased Leased Leased Leased Leased		—   —   2012 2011 2018 2011 2016 2013 2012
Keurig Administrative Offices and Warehouse Space	Reading, MA Woburn, MA		72,000 7,600		Leased Leased		2015 2010

In addition to the locations listed above, the Company has inventory at various locations managed by third party warehouses and order fulfillment entities.

The land underneath our 72,000 square foot warehousing and distribution facility in Waterbury, Vermont is leased and the lease for the land expires in 2024.

We believe our facilities are generally adequate for our current needs and for the remainder of fiscal 2011.

Item 3. Legal Proceedings

SEC Inquiry

As previously disclosed on the Current Report on Form 8-K dated September 28, 2010, the staff of the SEC’s Division of Enforcement informed the Company that it was conducting an inquiry into matters at the Company. The Company, at the direction of the audit committee of the Company’s board of directors, is cooperating fully with the SEC staff’s inquiry.

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Audit Committee Internal Investigation

As previously disclosed in the Current Report on Form 8-K dated November 15, 2010, the audit committee of the Company’s board of directors initiated an internal investigation in light of the SEC staff’s inquiry. The audit committee retained legal counsel and a forensic accounting team to assist in this investigation and to respond to requests in the SEC staff’s inquiry. Although legal counsel will continue to assist the Company in cooperating with the SEC staff’s inquiry, the internal investigation is now complete.

Stockholder Litigation

We and certain of our officers and directors are currently subject to five putative securities fraud class actions and three putative stockholder derivative actions. These actions were instituted on various dates between September 30, 2010 and November 29, 2010.

The putative securities fraud class actions consist of the following, all filed in the United States District Court for the District of Vermont and pending before the Honorable William K. Sessions, III: Dan M. Horowitz v. Green Mountain Coffee Roasters, et al., Civ. No. 2:10-cv-00227; Zane Hathaway v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00239; Jerzy Warchol v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00238; Russell Blank v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00267; and Paulo Sebastian Menendez v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00273. These actions allege violations of the federal securities laws in connection with the Company’s disclosures relating to its revenues and its forward guidance. The complaints include counts for violation of Section 10(b) of the Exchange Act and Rule 10b-5 against all defendants, and for violation of Section 20(a) of the Exchange Act against the officer defendants. The actions seek to represent all purchasers of the Company’s securities between July 28, 2010 and September 28, 2010 or September 29, 2010. The actions seek class certification, compensatory damages, equitable and/or injunctive relief, attorneys’ fees, costs, and such other relief as the court should deem just and proper. Pursuant to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(3), plaintiffs had until November 29, 2010 to move the court to serve as lead plaintiff of the putative class, following which the court will determine which plaintiff will serve as lead plaintiff. On November 29, 2010, the court granted a stipulated motion filed by the parties providing for the filing of an amended consolidated complaint 60 days after the court appoints a lead plaintiff, and entering a briefing schedule for defendants’ motions to dismiss.

The stockholder derivative actions consist of the following: Daniel Himmel v. Robert P. Stiller, et al., Civ. No. 2:10-cv-00233 and Lewis J. Smith v. Lawrence Blanford, et al., Civ. No. 2:10-cv-00253, both filed in the United States District Court for the District of Vermont and pending before the Honorable William K. Sessions, III; and M. Elizabeth Dickenson v. Robert P. Stiller, et al., Civ. No. 818-11-10, filed in the Superior Court of the State of Vermont for Washington County. The derivative complaints are asserted nominally on behalf of the Company against certain of its directors and officers and are premised on the same allegations asserted in the putative securities class action complaints described above. The derivative complaints assert claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. The complaints seek compensatory damages, injunctive relief, restitution, disgorgement, attorneys’ fees, costs, and such other relief as the court should deem just and proper. On November 29, 2010, the federal court entered an order consolidating the two federal actions and appointing the firms of Robbins Umeda LLP and Shuman Law Firm as co-lead plaintiffs’ counsel. No scheduling order has been entered.

We and the other defendants intend to vigorously defend the pending lawsuits. Additional lawsuits may be filed and, at this time, we are unable to predict the outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations.

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Executive Officers of the Registrant

Certain biographical information regarding each executive officer of our Company is set forth below:

Name	Age		Position	Officer since
Lawrence J. Blanford		57	President, Chief Executive Officer and Director		2007
Howard Malovany		60	Vice President, Corporate General Counsel and Secretary		2009
R. Scott McCreary		51	President of SCBU		2004
Frances G. Rathke		50	Vice President, Chief Financial Officer, and Treasurer		2003
Stephen J. Sabol		49	Vice President of Development		1993
Michelle V. Stacy		54	President of Keurig, Incorporated		2008

Lawrence J. Blanford has served as President, Chief Executive Officer and Director since May 2007. From May 2005 to October 2006, Mr. Blanford held the position of Chief Executive Officer at Royal Group Technologies Ltd., a Canadian building products and home improvements company. From January 2004 to May 2005, Mr. Blanford was Founder and President of Strategic Value Consulting, LLC, a consultancy.

Howard Malovany has served as Vice President, Corporate General Counsel and Secretary since February 2009. From 1996 to 2009, Mr. Malovany worked with the Wm. Wrigley Jr. Company, serving most recently as Senior Vice President, Secretary and General Counsel.

R. Scott McCreary has served as President of SCBU since December 2009 and Chief Operating Officer of the Company since September 2004.

Frances G. Rathke has served as Vice President, Chief Financial Officer and Treasurer of the Company since October 2003.

Stephen J. Sabol has served as Vice President of Development of the Company since October 2001.

Michelle V. Stacy has served as President of Keurig, Incorporated since November 2008. From October 2007 to October 2008, Ms. Stacy served as Managing Partner of Archpoint Consulting, a professional services firm. From October 2005 to October 2007, Ms. Stacy was Vice President and General Manager of Global Professional Oral Care with Procter & Gamble. From 1983 to 2005, Ms. Stacy held various executive positions with The Gillette Company.

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PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Securities

Price Range of Securities

The Company’s common stock trades on the NASDAQ Global Select Market under the symbol GMCR. The following table sets forth the high and low closing prices as reported by NASDAQ for the periods indicated as adjusted to reflect the three-for-one stock split effective on May 17, 2010 and the three-for-two stock split effective on June 8, 2009.

		High		Low
Fiscal 2009	13 weeks ended December 27, 2008	$	9.05	$	5.41
	13 weeks ended March 28, 2009	$	10.88	$	7.38
	13 weeks ended June 27, 2009	$	20.86	$	10.33
	13 weeks ended September 26, 2009	$	23.48	$	18.54
Fiscal 2010	13 weeks ended December 26, 2009	$	25.83	$	19.98
	13 weeks ended March 27, 2010	$	32.54	$	25.89
	13 weeks ended June 26, 2010	$	32.55	$	22.53
	13 weeks ended September 25, 2010	$	37.00	$	25.62

Number of Equity Security Holders

As of November 26, 2010, the number of record holders of the Company’s common stock was 434.

Dividends

The Company has never paid a cash dividend on its common stock and anticipates that for the foreseeable future any earnings will be retained for use in its business and, accordingly, does not anticipate the payment of cash dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders(1)		8,978,957	$	6.18		8,520,797
Equity compensation plans not approved by security holders(2)		1,531,466	$	5.00		—
Total		10,510,423	$	6.01		8,520,797

⁽¹⁾ Includes the 1993 Stock Option Plan, the 1999 Stock Option Plan, the 2000 Stock Option Plan, the 2006 Incentive Plan, the 2002 Deferred Compensation Plan and the Green Mountain Coffee Roasters, Inc. Amended and Restated Employee Stock Purchase Plan. See Note 16, Employee Compensation Plans, of the Consolidated Financial Statements included in this Annual Report.

⁽²⁾ Includes compensation plans assumed in the Keurig acquisition and inducement grants to Lawrence Blanford, Howard Malovany and Michelle Stacy. See Note 16, Employee Compensation Plans, of the Consolidated Financial Statements included in this Annual Report.

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Performance graph

Item 6. Selected Financial Data

The selected financial data set forth below as of and for the years ended September 26, 2009, September 27, 2008, September 29, 2007 and September 30, 2006, have been restated to reflect adjustments to our previously issued financial statements as more fully discussed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in Note 3, Restatement of Previously Issued Financial Statements and in Note 24, Unaudited Quarterly Financial Data of the Consolidated Financial Statements included in Item 8 of this Annual Report. The following data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements of the Company, including the notes thereto, in Items 7 and 8, respectively; of this Annual Report in order to fully understand factors that may affect the comparability of the financial data. The following selected Consolidated Balance Sheet data as of September 25, 2010 and September 26, 2009 and selected Consolidated Statements of Operations for the fifty-two weeks ended September 25, 2010, September 26, 2009 and September 27, 2008 are derived from our audited financial statements included in Item 8 of this Annual Report. The historical results do not necessarily indicate results expected for any future period.

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Our fiscal year is based on a 52-week year for all years presented, except fiscal 2006 which was comprised of 53 weeks. There were no cash dividends paid during the past five fiscal years.

	Fiscal Years Ended
	Sept. 25,  2010(3)		Sept. 26,  2009(2) (As Restated)			Sept. 27, 2008 (As Restated)		Sept. 29, 2007 (As Restated)		Sept. 30, 2006 (As Restated)
	In thousands, except per share data
Net sales	$	1,356,775	$	786,135		$	492,517	$	336,112	$	224,305
Income before equity in loss of Keurig, Incorporated	$	79,506	$	54,439		$	21,669	$	12,557	$	8,941
Net income	$	79,506	$	54,439		$	21,669	$	12,557	$	7,978
Net income per share-diluted(4)	$	0.58	$	0.45		$	0.19	$	0.11	$	0.07
Total assets	$	1,370,574	$	813,405		$	354,693	$	263,298	$	233,243
Long-term debt	$	335,504	$	73,013		$	123,517	$	90,050	$	102,871
Stockholders’ equity	$	699,245	$	587,350	(1)	$	138,139	$	98,351	$	74,476

⁽¹⁾ The fiscal 2009 stockholders’ equity balance reflects the impact of the August 12, 2009 equity offering.

⁽²⁾ Fiscal 2009 information presented reflects the acquisition of the wholesale business and certain assets of Tully’s Coffee Corporation.

⁽³⁾ Fiscal 2010 information presented reflects the acquisition of Timothy’s on November 13, 2009 and the acquisition of Diedrich on May 11, 2010.

⁽⁴⁾ Previous years restated to reflect a 3-for-1 stock split effective May 17, 2010, a 3-for-2 stock split effective June 8, 2009 and a 3-for-1 stock split effective July 30, 2007.

Previously filed Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q for the periods affected by the restatement have not been amended. Accordingly, investors should no longer rely upon the Company’s previously released financial statements for these periods and any earnings releases or other communications relating to these periods.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview of Restatement

In this Annual Report on Form 10-K, Green Mountain Coffee Roasters, Inc. (together with its subsidiaries, the “Company” or “GMCR”):

(a) restates its Consolidated Balance Sheets as of September 26, 2009 and the related Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the fiscal years ended September 27, 2008 and September 26, 2009;

(b) restates its “Selected Financial Data” in Item 6 for fiscal years 2006, 2007, 2008 and 2009; and

(c) restates its Unaudited Quarterly Financial Data for each fiscal quarter in the fiscal year ended September 26, 2009 and the first three fiscal quarters in the fiscal year ended September 25, 2010.

The adjustments made as a result of the restatement are more fully discussed in Note 3, Restatement of Previously Issued Financial Statements, of the Notes to Consolidated Financial Statements included in this Annual Report. To further review the effects of the accounting errors identified and the restatement adjustments, see Part II—Item 6—Selected Financial Data included in this Annual Report. For a description of the control deficiencies identified by management as a result of the investigation and our internal reviews, and management’s plan to remediate those deficiencies, see Part II—Item 9A—Controls and Procedures.

Previously filed Annual Reports on Form 10-K and quarterly reports on Form 10-Q for the affected periods have not been amended. Accordingly, investors should no longer rely upon the Company’s previously released financial statements for these periods and any earnings releases or other communications relating to these periods. See Note 24, Unaudited Quarterly Financial Data, of the Notes to the Consolidated Financial Statements in this Annual Report for the impact of these adjustments on each of the quarterly periods in fiscal 2009 and for the first three quarters of fiscal 2010. Quarterly reports for fiscal 2011 will include restated results for the corresponding interim periods of fiscal 2010.

Background on the Restatement

As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on November 19, 2010, the board of directors of the Company, based on the recommendation of the audit committee and in consultation with management, concluded that, because of errors identified in the Company’s previously issued financial statements for the fiscal years ended September 30, 2006, September 29, 2007, September 27, 2008 and September 26, 2009 and the first three quarters of fiscal 2010, the Company would restate its previously issued financial statements, including the quarterly data for fiscal years 2009 and 2010 and its selected financial data for the relevant periods.

These errors were discovered by management during the course of its preparation of this Annual Report and the audit of the financial results for fiscal 2010, as well as during the course of an internal investigation initiated by the audit committee of the Company’s board of directors in light of the previously disclosed inquiry by the staff of the SEC Division of Enforcement. The audit committee of the Company’s board of directors has completed its investigation, and the Company, at the discretion of the audit committee of the Company’s board of directors, continues to cooperate fully with the SEC. None of the financial statement errors implicate misconduct with respect to the Company or its management or employees. In addition, none of the financial statement errors are related to the Company’s relationship with M.Block & Sons, Inc., the fulfillment entity through which the Company makes a majority of the at-home orders for the Keurig business unit’s single-cup business sold to retailers.

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The restated financial statements correct the following errors:

Intercompany Elimination Adjustments:

• A $7.4 million overstatement of pre-tax income ($4.5 million after tax), cumulative over the restated periods, due to the K-Cup^® portion pack inventory adjustment error previously reported in the Company’s Form 8-K filed on September 28, 2010. This error is the result of applying an incorrect standard cost to intercompany K-Cup portion pack inventory balances in consolidation. This error resulted in an overstatement of the consolidated inventory and an understatement of the cost of sales. Rather than correcting the cumulative amount of the error in the quarter ended September 25, 2010, as disclosed in the September 28, 2010 Form 8-K, the effect of this error has been recorded in the applicable restated periods.

• A $0.7 million overstatement of pre-tax income ($0.4 million after tax), cumulative over the restated periods, due to applying an incorrect standard cost to intercompany brewer inventory balances in consolidation. This error was identified during the preparation of the fiscal year 2010 financial statements and resulted in an overstatement of the consolidated inventory and an understatement of the cost of sales.

• Certain intercompany sales transactions were not properly eliminated, primarily in the first three quarters of fiscal 2010, which resulted in understatements of both sales and cost of sales of an equal amount and did not affect net income.

Third Party Royalty Adjustments:

• A $1.0 million overstatement of pre-tax income ($0.7 million after tax), cumulative over the restated periods, due to changes in the timing and classification of the Company’s historical recognition of royalties from third party licensed roasters. Because royalties were earned upon shipment of K-Cup portion packs by roasters pursuant to the terms and conditions of the licensing agreements with these roasters, Keurig historically recognized these royalties at the time Keurig purchased the K-Cup portion packs from the licensed roasters and classified them in net sales. Management has determined that the royalty should be recognized as a reduction to the carrying value of the related inventory which will reduce cost of sales when the K-Cup portion packs are sold to a third-party customer. Due to the Company’s completed and pending acquisitions of third party licensed roasters, these purchases and the associated royalties had less impact, since the post-acquisition royalties from these wholly-owned roasters are eliminated in the Company’s consolidated financial statements.

Marketing and Customer Incentive Expense Adjustments:

• A $1.4 million overstatement of pre-tax income ($0.9 million after tax), cumulative over the restated periods, due to the under-accrual of certain marketing and customer incentive program expenses. The Company also has corrected the classification of certain of these amounts as reductions to net sales instead of selling and operating expenses. These programs include, but are not limited to, brewer mark-down support and funds for promotional and marketing activities. Management has determined that a lack of adequate communication between the accounting function to gather the appropriate information from the sales and marketing functions resulted in expenses for certain of these programs being recorded in the wrong fiscal periods.

• A $0.7 million understatement of pre-tax income ($0.4 million after tax) for the Specialty Coffee business unit (“SCBU”), due primarily to a failure to reverse an accrual related to certain customer incentive programs in the second fiscal quarter of 2010. The over-accrual was not identified and corrected until the fourth fiscal quarter of 2010.

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Other Adjustments:

• In addition to the errors described above, the restated financial statements also include adjustments to correct certain other immaterial errors, including previously unrecorded immaterial adjustments identified in audits of prior years’ financial statements.

You should read the following discussion and analysis in conjunction with our consolidated financial statements and related notes included elsewhere in this report.

Overview

We are a leader in the specialty coffee and overall coffee maker businesses. We roast high-quality Arabica bean coffees including single-origin, Fair Trade Certified ^TM, certified organic, flavored, limited edition and proprietary blends offered in K-Cup^® portion packs, whole bean and ground coffee selections. In addition, we manufacture and sell the Keurig^® single-cup brewing system for use with K-Cup portion packs. K-Cup portion pack brands that are packaged and sold by us include:

• Barista Prima^®

• Café Escapes^®

• Caribou Coffee^®

• Celestial Seasonings^®

• Coffee People^®

• Diedrich^®

• Donut House^®

• Emeril’s^®

• Gloria Jeans^®

• Green Mountain Coffee^®

• Green Mountain Naturals^TM

• Kahlua^®

• Newman’s Own^® Organics

• Timothy’s^®

• Tully’s^®

• revv^TM

The Newman’s Own^® Organics, Caribou Coffee^®, Celestial Seasonings^®, Kahlua^®, Emeril’s^® and Gloria Jean’s^® brands are licensed to us for our exclusive use in the Keurig single-cup brewing system.

A significant driver of the Company’s growth continues to be sales of K-Cup portion packs and Keurig single-cup brewing systems.

Business Segments

The Company manages its operations through two operating segments, Specialty Coffee business unit (“SCBU”) and Keurig business unit (“Keurig”). We evaluate performance primarily based on segment income before taxes. Expenses not specifically related to either operating segment are recorded in the “Corporate” segment.

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SCBU sources, produces and sells more than 200 varieties of coffee, cocoa, teas and other beverages in K-Cup^® portion packs and coffee in more traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs, for use both at-home (“AH”) and away-from-home (“AFH”). These varieties are sold primarily in North American wholesale channels, including supermarkets and convenience stores, in restaurants and hospitality, to office coffee distributors and directly to consumers via its website www.greenmountaincoffee.com. In addition, SCBU sells Keurig single-cup brewers and other accessories directly to consumers and supermarkets.

Keurig is a pioneer and leading manufacturer of gourmet single-cup brewing systems, and also targets its premium patented single-cup brewing systems for use both AH and AFH, mainly in North America. Keurig sells AH single-cup brewers, accessories and coffee, tea, cocoa and other beverages in K-Cup portion packs produced by SCBU and other licensed roasters to retailers by principally processing its orders through fulfillment entities for the AH channels. Keurig sells AFH single-cup brewers to distributors for use in offices. Keurig also sells AH brewers, a limited number of AFH brewers and K-Cup portion packs directly to consumers via its website, www.keurig.com.

Cost of sales for the Company consists of the cost of raw materials including coffee beans, cocoa, flavorings and packaging materials; a portion of our rental expense; production, warehousing and distribution costs which include salaries; distribution and merchandising personnel; leases and depreciation on facilities and equipment used in production; the cost of brewers manufactured by suppliers; fulfillment charges (including those paid to third-parties or to fulfillment entities); and freight, duties and delivery expenses. Selling and operating expenses consist of expenses that directly support sales, including media and advertising expenses; a portion of the rental expense; and the salaries and related expenses of employees directly supporting sales and marketing as well as research and development. General and administrative expenses consist of expenses incurred for corporate support and administration, including a portion of the rental expense and the salaries and related expenses of personnel not elsewhere categorized, and starting in fiscal 2010, include certain acquisition-related expenses.

Corporate expenses are comprised mainly of the compensation and other related expenses of certain of the Company’s senior executive officers and other selected employees who perform duties related to our entire enterprise. Corporate expenses also include interest expense, certain corporate legal expenses and compensation of the board of directors. In addition, corporate expenses include, starting in fiscal 2010, acquisition-related costs. In fiscal 2009, corporate expenses were offset by $17.0 million of proceeds received from a litigation settlement with Kraft. Corporate assets include cash, short-term investments and deferred income taxes.

Goodwill and intangibles related to the Frontier, Tully’s, Timothy’s and Diedrich acquisitions are included in the SCBU reporting unit of the Company. Keurig related goodwill and intangibles are included in the Keurig reporting unit of the Company.

Basis of Presentation

Included in this presentation are discussions and reconciliations of income before taxes, net income and diluted earnings per share in accordance with generally accepted accounting principles in the United States of America (“GAAP”) compared to income before taxes, net income and diluted earnings per share excluding certain expenses and losses, which we refer to as non-GAAP income before taxes, non-GAAP net income and non-GAAP diluted earnings per share. These non-GAAP measures exclude acquisition-related transaction expenses and a one-time patent litigation settlement and the related legal expenses in fiscal 2009. These non-GAAP measures are not in accordance with, or an alternative to, GAAP. The Company’s management uses these non-GAAP measures in discussing and analyzing its results of operations because it believes the non-GAAP measures provide investors with transparency by helping to illustrate the underlying financial and business trends relating to the Company’s results of operations and financial condition and comparability between current and prior periods. Management uses the non-GAAP measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company.

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These non-GAAP financial measures should be considered in addition to, and not as a substitute or superior to, the other measures of financial performance prepared in accordance with GAAP. Using only the non-GAAP financial measures to analyze our performance would have material limitations because their calculation is based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. Management compensates for these limitations by presenting both the GAAP and non-GAAP measures of its results.

Acquisitions

On September 14, 2010, the Company announced a share purchase agreement to acquire all the outstanding shares of Van Houtte for approximately $915.0 million Canadian dollars or $890.0 million U.S. dollars, based upon an exchange rate as of September 13, 2010, subject to adjustment. The Company has secured a financing commitment for a new $1.45 billion senior secured credit facility to finance the Van Houtte acquisition and transaction expenses, as well as to refinance the Company’s existing outstanding indebtedness. We have received two of the three required regulatory approvals necessary to complete this transaction. We remain confident that we will receive the final regulatory approval so that we can close the transaction by December 31, 2010. See Note 25, Subsequent Events, of the Notes to Consolidated Financial Statements included in this Annual Report.

On May 11, 2010, the Company acquired all of the outstanding common stock of Diedrich for approximately $305.3 million, net of cash acquired. The acquisition was financed using available cash on hand, the existing credit facility and a $140.0 million term loan.

On November 13, 2009, the Company acquired all of the outstanding stock of Timothy’s, which included its brand and wholesale coffee business for an aggregate cash purchase price of approximately $155.7 million. The acquisition was financed using available cash on hand.

On March 27, 2009, the Company purchased certain assets of Tully’s for $41.4 million, which includes direct acquisition costs of $1.1 million. This acquisition was financed through the existing senior revolving credit facility.

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Results of Operations

The following discussion of results of operations should be read in conjunction with Item 6. Selected Financial Data, of the Consolidated Financial Statements and accompanying Notes thereto and the other financial data included elsewhere in this report.

Summary financial data of the Company

The following table presents certain financial data of the Company expressed as a percentage of net sales for the periods denoted below:

	Fiscal years ended
	September 25, 2010			September 26, 2009 (As Restated)			September 27, 2008 (As Restated)
Net sales		100.0	%		100.0	%		100.0	%
Cost of sales		68.6	%		68.8	%		64.7	%
Gross profit		31.4	%		31.2	%		35.3	%
Selling and operating expenses		13.7	%		15.4	%		18.5	%
General and administrative expenses		7.4	%		6.1	%		7.8	%
Patent litigation (settlement) expense		0.0	%		(2.2	)%		0.7	%
Operating income		10.3	%		11.9	%		8.3	%
Other expense		0.0	%		(0.1	)%		0.0	%
Interest expense		(0.4	)%		(0.6	)%		(1.2	)%
Income before income taxes		9.9	%		11.2	%		7.1	%
Income tax expense		(3.9	)%		(4.3	)%		(2.8	)%
Net income		6.0	%		6.9	%		4.3	%

Segment Summary

Net sales and income before taxes for each of our operating segments are summarized in the tables below.

	Net sales (in millions)									Percent growth
	2010			2009 (As Restated)			2008 (As Restated)			2010			2009 (As Restated)
SCBU	$	629.0		$	383.8		$	285.9			64	%		34	%
Keurig		727.8			402.3			206.6			81	%		95	%
Corporate		—			—			—			—			—
Total Company	$	1,356.8		$	786.1		$	492.5			73	%		60	%
	Income before taxes (in millions)									Percent growth
	2010			2009 (As Restated)			2008 (As Restated)			2010			2009 (As Restated)
SCBU	$	119.5		$	53.5		$	27.8			123	%		92	%
Keurig		72.3			40.4			28.0			79	%		44	%
Corporate		(44.1	)		(2.8	)		(18.7	)		(1475	)%		85	%
Inter-company eliminations		(14.5	)		(3.1	)		(1.7	)		(368	)%		(82	)%
Total Company	$	133.2		$	88.0		$	35.4			51	%		149	%

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Revenue

Company Summary

Net sales for fiscal 2010 increased 73% to $1,356.8 million, up from $786.1 million reported in fiscal 2009. For fiscal 2009, net sales increased 60% to $786.1 million, up from $492.5 million reported in fiscal 2008. The two primary drivers of the increase in net sales for fiscal 2010 were the 103% or $424.0 million increase in total K-Cup^® portion pack net sales and the 67% or $133.1 million increase in Keurig brewer and accessories sales. In addition, the acquisitions of Timothy’s and Diedrich in fiscal 2010 represented 10 percentage points and 5 percentage points of the increase in consolidated net sales, respectively.

Approximately 88% of consolidated net sales during fiscal 2010 were from the Keurig brewing system and its recurring K-Cup portion pack revenue with total K-Cup portion pack net sales of $834.4 million, total Keurig brewer and accessory net sales of $330.8 million and royalty income from K-Cup portion packs shipped by its third party licensed roasters of $22.0 million. As a result of the acquisitions discussed above, the Company believes that royalty revenue will decrease materially in the future.

For fiscal 2009, approximately 81% of consolidated net sales were from the Keurig brewing system and its recurring K-Cup portion pack revenue with total K-Cup portion pack net sales of $410.4 million, total Keurig brewer and accessory net sales of $197.7 million and royalty income from K-Cup portion packs shipped by its third party licensed roasters of $25.3 million.

SCBU

Fiscal 2010

SCBU segment net sales increased by $245.2 million or 64%, to $629.0 million in fiscal 2010 as compared to $383.8 million reported in fiscal 2009. Approximately 91% of the increase in SCBU’s net sales was due to higher K-Cup portion pack sales.

Fiscal 2009

SCBU segment net sales increased by $97.9 million or 34%, to $383.8 million in fiscal 2009 as compared to $285.9 million reported in fiscal 2008. Approximately 85% of the increase in SCBU’s net sales was due to higher K-Cup^® portion pack sales.

Keurig

Fiscal 2010

Keurig segment net sales increased by $325.5 million, or 81%, to $727.8 million in fiscal 2010 as compared to $402.3 million in fiscal 2009, with approximately 62% of the increase driven by K-Cup portion pack sales to retailers and consumers. Net sales of brewers and accessories increased 69% to approximately $315.4 million in fiscal 2010 from $187.1 million in fiscal 2009.

Fiscal 2009

Keurig segment net sales increased by $195.7 million, or 95%, to $402.3 million in fiscal 2009 as compared to $206.6 million in fiscal 2008, with approximately 53% of the increase driven by K-Cup portion pack sales to retailers and consumers. Net sales of brewers and accessories increased 83% to approximately $187.1 million in fiscal 2009 from $102.1 million in fiscal 2008.

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Gross Profit

Fiscal 2010

Company gross profit for fiscal 2010 totaled $425.8 million, or 31.4% of net sales, as compared to $245.4 million, or 31.2% of net sales, in fiscal 2009. Gross margin increased over fiscal 2009 due to the additional manufacturing margin resulting from the acquisition of Timothy’s and Diedrich, and realized manufacturing efficiencies within SCBU. These increases in gross margin were offset by higher brewer sales returns and warranty expense. In fiscal 2010, the Company was able to recover approximately $6.0 million as reimbursement from its suppliers related to a quality issue associated with certain brewer models produced primarily in late calendar 2009. The quality issue did not represent a safety concern, and is believed to be tied to a component used in limited production primarily from late 2009. This recovery was reflected as a reduction to warranty expense and moderately offsets the higher brewer warranty expense and sales returns costs incurred during fiscal 2010.

Fiscal 2009

Company gross profit for fiscal 2009 totaled $245.4 million, or 31.2% of net sales, as compared to $174.0 million, or 35.3% of net sales, in fiscal 2008. The margin decline was due primarily to the increase in sales of AH single-cup brewers, which are sold approximately at cost, or sometimes at a loss when factoring in the incremental costs related to sales, including fulfillment charges, returns reserve and warranty expense, as part of the Company’s strategy to increase the installed base of Keurig brewers.

Selling, General and Administrative Expenses

Fiscal 2010

Company selling, general and administrative expenses (S,G&A) increased 70% to $287.0 million in fiscal 2010 from $169.0 million in fiscal 2009. As a percentage of sales, S,G&A remained consistent at 21% in fiscal 2010 and fiscal 2009.

In accordance with accounting for business combinations, acquisition-related transaction expenses are to be expensed rather than capitalized, which occurred beginning in fiscal 2010 for the Company. Accordingly, for fiscal 2010, general and administrative expenses include $11.7 million of acquisition-related expenses related to the completed acquisition of Diedrich, $1.9 million of acquisition-related expenses related to the completed Timothy’s acquisition, as well as $5.3 million for the pending acquisition of Van Houtte. In addition, amortization of identifiable intangibles due to all Company acquisitions was $15.0 million in fiscal 2010 as compared to $5.3 million in fiscal 2009.

Fiscal 2009

Company selling, general and administrative expenses (S,G&A) increased 31% to $169.0 million in fiscal 2009 from $129.4 million in fiscal 2008. As a percentage of sales, S,G&A declined to 21% in fiscal 2009 from 26% in fiscal 2008. This improvement in S,G&A margin was mainly due to leveraging selling and organizational resources on a higher sales base.

Interest Expense

Company interest expense increased to $5.3 million in fiscal 2010, up from $4.7 million in fiscal 2009. The increase was primarily due to an increase in the Company’s borrowings under its Credit Facility.

Interest expense was $5.7 million in fiscal 2008. The decrease in fiscal 2009 as compared to fiscal 2008 was primarily due to lower interest rates on the Company’s outstanding balance under its credit facility.

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In fiscal 2010, 2009 and 2008, the Company capitalized $1.3 million, $0.6 million, and $0.6 million of interest expense, respectively.

The Company expects interest expense to increase materially as a result of increased indebtedness resulting from the expected $1.45 billion senior secured credit facility, which will also refinance indebtedness under our current credit facility.

Income before taxes

Company income before taxes was $133.2 million in fiscal 2010, $88.0 million in fiscal 2009, and $35.5 million in fiscal 2008, as a percentage of net sales, 10%, 11% and 7% respectively.

Excluding acquisition-related expenses ($18.9 million in fiscal 2010) and patent litigation settlement and expense ($17.0 million settlement in fiscal 2009 and $3.3 million expense in fiscal 2008), the Company’s non-GAAP income before taxes was $152.1 million, $71.0 million, and $38.7 million in fiscal 2010, 2009, and 2008, respectively. Non-GAAP income before taxes as a percentage of net sales was, 11%, 9% and 8%, in fiscal 2010, 2009 and 2008, respectively.

The SCBU segment contributed $119.5 million in income before taxes in fiscal 2010, up from $53.5 million in fiscal 2009 and $27.8 million in fiscal 2008.

The Keurig segment contributed $72.3 million in income before taxes in fiscal 2010, up from $40.4 million in fiscal 2009 and $28.0 million in fiscal 2008.

The Corporate segment accounted for a reduction of $44.1 million from income before taxes in fiscal 2010 (including $18.9 million of acquisition-related expenses) as compared to a reduction of $2.8 million in fiscal 2009 (which included the $17.0 million patent litigation settlement) and a reduction of $18.7 million in fiscal 2008.

Income Taxes

Income tax expense was $53.7 million in 2010, $33.6 million in 2009 and $13.8 million in 2008. The effective tax rate was 40.3% in 2010, 38.2% in 2009 and 38.9% in 2008.

Fiscal 2010

The effective tax rate for fiscal 2010 was 40.3% resulting in an income tax provision of $53.7 million. Our effective tax rate was higher than our historical rate primarily due to an estimated total of $13.6 million non-deductible acquisition related expenses incurred relating to the Timothy’s and Diedrich acquisitions. The $5.3 million acquisition-related expenses for the pending Van Houtte transaction has been treated as a current deferred tax asset pending the acquisition close.

Fiscal 2009

Our fiscal 2009 effective tax rate was 38.2% resulting in an income tax provision of $33.6 million. Our effective tax rate was lower than our historical rate primarily due to foreign tax credits associated with royalties earned on K-Cup^® portion packs from Canadian licensed roasters.

Net Income, Non-GAAP Net Income and Diluted EPS

Company net income in fiscal 2010 was $79.5 million, an increase of $25.1 million or 46%, as compared to $54.4 million in fiscal 2009. Company net income in fiscal 2008 was $21.7 million.

Company diluted EPS increased $0.13 or 29% to $0.58 per share in fiscal 2010, as compared to $0.45 per share in fiscal 2009. Company diluted EPS in fiscal 2008 was $0.19 per share.

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Excluding the impact of acquisition-related expenses or patent litigation settlement or expenses illustrated in the financial table provided below, non-GAAP net income increased approximately 119% in fiscal 2010 totaling $96.3 million, or $0.70 per share, as compared to non-GAAP net income of $43.9 million, or $0.36 per share, in fiscal 2009. Non-GAAP net income was $23.7 million, or $0.21 per share in fiscal 2008.

The following tables show a reconciliation of net income and diluted EPS to non-GAAP net income and non-GAAP diluted EPS for fiscal 2010, 2009 and 2008 (in thousands, except per share data):

	For the fiscal year ended September 25, 2010
	GAAP			Acquisition- related Transaction Expenses			Non-GAAP
Net sales	$	1,356,775		$	—		$	1,356,775
Cost of sales		931,017			—			931,017
Gross profit		425,758			—			425,758
Selling and operating expenses		186,418			—			186,418
General and administrative expenses		100,568			(18,906	)		81,662
Patent litigation (settlement) expense		—			—			—
Operating income		138,772			18,906			157,678
Other income (expense)		(269	)		—			(269	)
Interest expense		(5,294	)		—			(5,294	)
Income before income taxes		133,209			18,906			152,115
Income tax expense		(53,703	)		(2,133	)		(55,836	)
Net income	$	79,506		$	16,773		$	96,279
Basic income per share:
Weighted average shares outstanding		131,529,412			131,529,412			131,529,412
Net income	$	0.60		$	0.13		$	0.73
Diluted income per share:
Weighted average shares outstanding		137,834,123			137,834,123			137,834,123
Net income	$	0.58		$	0.12		$	0.70

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	For the fiscal year ended September 26, 2009
	GAAP (As Restated)			Patent Litigation (settlement) expense			Non-GAAP (As Restated)
Net sales	$	786,135		$	—		$	786,135
Cost of sales		540,744			—			540,744
Gross profit		245,391			—			245,391
Selling and operating expenses		121,350			—			121,350
General and administrative expenses		47,655						47,655
Patent litigation (settlement) expense		(17,000	)		17,000			—
Operating income		93,386			(17,000	)		76,386
Other income (expense)		(662	)		—			(662	)
Interest expense		(4,693	)		—			(4,693	)
Income before income taxes		88,031			(17,000	)		71,031
Income tax expense		(33,592	)		6,443			(27,149	)
Net income	$	54,439		$	(10,557	)	$	43,882
Basic income per share:
Weighted average shares outstanding		113,979,588			113,979,588			113,979,588
Net income	$	0.48		$	(0.09	)	$	0.38
Diluted income per share:
Weighted average shares outstanding		120,370,659			120,370,659			120,370,659
Net income	$	0.45		$	(0.09	)	$	0.36
	For the fiscal year ended September 27, 2008
	GAAP (As Restated)			Patent Litigation (settlement) Expense			Non-GAAP (As Restated)
Net sales	$	492,517		$	—		$	492,517
Cost of sales		318,477			—			318,477
Gross profit		174,040			—			174,040
Selling and operating expenses		90,882			—			90,882
General and administrative expenses		38,480			—			38,480
Patent litigation (settlement) expense		3,279			(3,279	)		—
Operating income		41,399			3,279			44,678
Other income (expense)		(235	)		—			(235	)
Interest expense		(5,705	)		—			(5,705	)
Income before income taxes		35,459			3,279			38,738
Income tax expense		(13,790	)		(1,239	)		(15,029	)
Net income	$	21,669		$	2,040		$	23,709
Basic income per share:
Weighted average shares outstanding		107,774,091			107,774,091			107,774,091
Net income	$	0.20		$	0.02		$	0.22
Diluted income per share:
Weighted average shares outstanding		115,041,510			115,041,510			115,041,510
Net income	$	0.19		$	0.02		$	0.21

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Liquidity and Capital Resources

We principally have funded our operations, working capital needs and capital expenditures from operations, borrowings under our Credit Facility and equity offerings. At September 25, 2010, we had $354.5 million in debt outstanding under our Credit Facility, $4.8 million in cash and cash equivalents and $257.2 million of working capital. At September 26, 2009, we had $78.0 million in debt outstanding, $242.1 million in cash and cash equivalents and $410.9 million of working capital. The decrease in cash and cash equivalents, working capital and increase in debt as compared to September 26, 2009 was primarily attributable to the acquisitions of Timothy’s and Diedrich totaling $459.5 million and due to $118.0 million of capital expenditures primarily related to packaging equipment for K-Cup^® portion packs, roasting equipment, infrastructure and facilities. In connection with the acquisition of Van Houtte, we anticipate refinancing our indebtedness through a new $1.45 billion senior secured credit facility. As a result of this refinancing, we expect $2.8 million of deferred financing costs to be expensed and interest expense to increase materially in 2011.

Operating Activities:

Net cash provided by operations is principally comprised of net income and is primarily affected by the net change in working capital and non-cash items relating to depreciation and amortization, deferred taxes and excess tax benefits from equity-based compensation plans.

Net cash used by operating activities was $10.5 million in fiscal 2010 as compared to cash provided by operating activities of $38.5 million in fiscal 2009. The decrease in cash provided by operating activities was partly attributed to higher inventory levels to ensure both efficiencies and sufficient inventory for anticipated consumer demand for the fiscal 2011 holiday season. The decrease was also attributed to a proportionately larger increase in receivables from retail customers as a result of increased sales.

Investing Activities:

Cash flows from investing activities have historically been related to the purchase of equipment and the purchase and sale of short-term investments.

In fiscal 2010, cash flows from investing activities included capital expenditures of $118.0 million as compared to $48.3 million in 2009. The increase in capital expenditures was primarily related to packaging equipment for K-Cup portion packs. We currently expect to invest approximately $215.0 million to $260.0 million in capital expenditures during fiscal 2011, excluding capital expenditures anticipated for the acquisition of Van Houtte.

Investing activities may also include purchases of, interests in, loans to, and acquisitions of businesses. In fiscal 2010, $459.5 million was used to acquire Timothy’s and Diedrich. The acquisitions were financed using cash on hand and additional borrowings under our Credit Facility. On September 14, 2010, we agreed to purchase all of the issued and outstanding shares of capital stock of Van Houtte for a total purchase price of $915.0 million Canadian dollars. We intend to fund the purchase of Van Houtte through a combination of cash on hand and a new anticipated $1.45 billion senior secured credit facility, which will also refinance indebtedness under our current Credit Facility. We have received two of the three required regulatory approvals necessary to complete this transaction. We remain confident that we will receive the final regulatory approval so that we can close the transaction by December 31, 2010.

Financing Activities:

Cash flows provided by financing activities historically relate to the issuance of common stock through the exercise of stock options in connection with the employee stock purchase plan and proceeds from our Credit Facility. Cash provided by financing activities for fiscal 2010 totaled $298.3 million that included new borrowings under the Credit Facility totaling $285.0 million and $8.8 million generated from the exercise of

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employee stock options and the issuance of shares under the employee stock purchase plan. In addition, cash flows from operating and financing activities included $14.6 million tax benefit from the exercise of non-qualified options and disqualifying dispositions of incentive stock options. As stock options are exercised, we will continue to receive proceeds and a tax deduction where applicable, however we cannot predict either the amounts or the timing of any such proceeds or tax benefits.

We maintain a Revolving Credit Agreement (“Credit Facility”) with Bank of America, N.A. (Bank of America) and other lenders. The Credit Facility is comprised of (i) a USD $225.0 million senior secured revolving credit facility, (ii) a $50.0 million senior secured term loan A facility (of which $45.0 million is outstanding at September 25, 2010), and (iii) a $140.0 million senior secured term loan A1 facility (of which $136.5 million is outstanding at September 25, 2010). The term loans are amortizing at the rate of 10% annually and all borrowings under the Credit Facility are due in December 2012. The borrowings under the Credit Facility bear interest at prime or Libor rates, plus applicable margins. The average effective interest rate at September 25, 2010 was 2.7%, down from 6.3% at September 26, 2009. At September 25, 2010, $354.5 million was outstanding under the Credit Facility as compared to $78.0 million at September 26, 2009, and $51.3 million was available for borrowing at September 25, 2010. The Credit Facility also provides for a new increase option for an aggregate amount of up to $100.0 million. The Credit Facility requires us to comply, on a quarterly basis, with a funded debt to adjusted EBITDA ratio and a fixed charge coverage ratio. We were in compliance with these covenants at September 25, 2010. In addition, the Credit Facility contains a number of covenants that, among other things and subject to certain exceptions, restrict our ability to incur additional indebtedness; pay dividends or make distributions on our capital stock or redeem, repurchase or retire our capital stock or other indebtedness; make investments, loans, advances and acquisitions; create restrictions on the payment of dividends or other amounts to us from our subsidiaries; engage in transactions with our affiliates; sell assets; consolidate or merge; and create liens on our assets.

The Company is party to interest rate swap agreements, the effect of which is to limit the interest rate exposure on the outstanding balance of the Credit Facility to a fixed rate versus the 30-day Libor rate as follows: 5.4% on $19.8 million; 1.4% on $40.0 million; and 3.9% on $20.0 million. The total notional amounts of these swaps at September 25, 2010, and September 26, 2009, was $79.8 million and $75.7 million, respectively. The total notional amount covered by these swaps will decrease progressively in future periods and terminates on various dates from June 2011 through December 2012.

The fair market value of the interest rate swaps are the estimated amount that we would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates and the credit worthiness of the counterparty. At September 25, 2010, and September 26, 2009, we estimate we would have paid $2.7 million and $3.3 million (gross of tax), respectively, if we terminated the agreements. We designate the swap agreements as cash flow hedges and the changes in the fair value of the swaps are classified in accumulated other comprehensive income (a component of equity).

In fiscal year 2010, we paid $2.3 million in additional interest expense pursuant to the swap agreements, up from $2.2 million in fiscal 2009.

In light of our announced acquisition of Van Houtte, we intend to enter into a new senior secured credit facility that would be comprised of (i) a $650.0 million 5-year senior secured revolving credit facility, (ii) a $250.0 million 5-year senior secured term loan A facility, and (iii) a $550.0 million 6-year senior secured term loan B facility. This facility would also refinance our existing outstanding indebtedness and support our ongoing growth.

Additionally, on September 28, 2010, the Company completed a sale of 8,566,649 shares of its common stock, par value $0.10 per share, to Lavazza for an aggregate purchase price of $250.0 million. The sale of the shares was effected pursuant to a Common Stock Purchase Agreement (“SPA”) dated August 10, 2010. The SPA contains a five-and-one-half-year standstill period, during which Lavazza will be prohibited from increasing its

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ownership of Common Stock or making any proposals or announcements relating to extraordinary Company transactions. The standstill is subject to certain exceptions after a one-year period, including Lavazza’s right to purchase additional shares up to 15% of the Company’s outstanding shares, primarily in open market purchases.

We believe that our cash flows from operating activities, existing cash and our credit facility will provide sufficient liquidity to pay all liabilities in the normal course of business, fund anticipated capital expenditures and service debt requirements through the next 12 months. However, several risks and uncertainties could cause us to need to raise additional capital through equity and/or debt financing including we may look at potential future acquisitions from time to time. We also may consider from time to time engaging in stock buyback plans or programs.

A summary of cash requirements related to our outstanding long-term debt, future minimum lease payments and purchase commitments is as follows (in thousands):

Fiscal Year	Long-Term  Debt(1)		Operating Lease Obligations		Purchase Obligations		Total
2011	$	19,009	$	8,577	$	393,011	$	420,597
2012		19,004		7,588		93,246	$	119,838
2013		316,500		5,681		6,455	$	328,636
2014		—		5,460		1,575	$	7,035
2015		—		5,514		1,875	$	7,389
Thereafter		—		3,418		3,675	$	7,093
Total	$	354,513	$	36,238	$	499,837	$	890,588

⁽¹⁾ Long-Term Debt includes capital lease obligations.

In addition, we have $5.5 million in unrecognized tax benefits. The unrecognized tax benefits relate equally to foreign tax credits at the federal level and research development credits at the state level.

Factors Affecting Quarterly Performance

Historically, the Company has experienced variations in sales and earnings from quarter to quarter due to the holiday season and a variety of other factors, including, but not limited to, general economic trends, the cost of green coffee, competition, marketing programs, weather and special or unusual events. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which we prepare in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period (see Note 2, Significant Accounting Policies, to our Consolidated Financial Statements included in this Annual Report on Form 10-K). Actual results could differ from those estimates. We believe the following accounting policies and estimates require us to make the most difficult judgments in the preparation of our consolidated financial statements and accordingly are critical.

Use of estimates

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect amounts reported in the accompanying consolidated financial statements. Actual results could differ from those estimates.

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Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Green Mountain Coffee Roasters, Inc. and its wholly owned subsidiaries. The Company has significant intercompany transactions and all intercompany transactions and accounts have been eliminated in consolidation. The Company currently does not have any entities accounted for on the equity method or the cost method.

Business Combinations

The Company uses the acquisition method in accounting for business combinations and recognizes assets acquired and liabilities assumed measured at their fair values on the date acquired. Goodwill represents the excess of the purchase price over the fair value of the net assets. The Company engages a third party valuation firm to assist in determining the fair values of the assets and liabilities acquired particularly in the area of intangible assets. This valuation process involves making significant estimates which are based on interviews with management and detailed financial models including the projection of future cash flows, the weighted average cost of capital and any cost saving that are expected to be derived in the future.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents include money market funds which are carried at cost, plus accrued interest, which approximates fair value. The Company does not believe that it is subject to any unusual credit or market risk.

Short-Term Investments

Short-term investments consist of highly liquid investments, primarily certificates of deposit, with maturities over three months from the date of purchase. These assets are carried at cost, plus accrued interest, which approximates fair value due to the short maturity of these instruments.

Inventories

Inventories consist primarily of green and roasted coffee, including coffee in portion packs, purchased finished goods such as coffee brewers and packaging materials. Inventories are stated at the lower of cost or market. Cost is being measured using an adjusted standard cost method which approximates FIFO (first-in first-out). The Company regularly review whether the net realizable value of our inventory is lower than its carrying value. If our valuation shows that the net realizable value is lower than carrying value, the Company takes a charge to expense and directly reduce the value of the inventory.

The Company estimates its reserves for inventory obsolescence by examining its inventories on a quarterly basis to determine if there are indicators that the carrying values exceed net realizable value. Indicators that could result in additional inventory write downs include age of inventory, damaged inventory, slow moving products and products at the end of their life cycles. While management believes that the reserve for obsolete inventory is adequate, significant judgment is involved in determining the adequacy of this reserve.

Financial Instruments

The Company enters into various types of financial instruments in the normal course of business. Fair values are estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of perceived risk. Cash, cash equivalents, accounts receivable, accounts payable and accrued expenses are reported at carrying value and approximate fair value due to the short maturity of these instruments. Long-term debt is also reported at carrying value and approximates fair value due to the fact that the interest rate on the debt is based on variable interest rates (Libor or prime).

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The fair values of short-term investments and derivative financial instruments have been determined using market information and valuation methodologies. Changes in assumptions or estimates could affect the determination of fair value, however, management does not believe any such changes would have a material impact on the Company’s financial condition, results of operations or cash flows. The fair values of short-term investments and derivative financial instruments are disclosed in Note 15, Fair Value Measurements, in the consolidated financial statements included in this Annual Report.

Derivative Instruments

From time to time, the Company enters into coffee futures contracts to hedge against price increases in price-to-be-fixed coffee purchase commitments and anticipated coffee purchases. Coffee purchases are generally denominated in the U.S. dollar. The Company also enters into interest rate derivatives to hedge against unfavorable changes in interest rates and foreign currency derivatives to hedge against unfavorable changes in foreign currency exchange rates. Certain of these derivative instruments qualify for hedge accounting if the hedging relationship is expected to be highly effective. Effectiveness is determined by how closely the changes in the fair value of the derivative instrument offset the changes in the fair value of the hedged item. If the derivative is determined to qualify for hedge accounting, the effective portion of the change in the fair value of the derivative instrument is recorded in other comprehensive income and recognized in earnings when the related hedged item is sold. The ineffective portion of the change in the fair value of the derivative instrument is recorded directly to earnings. If these derivative instruments do not qualify for hedge accounting, the Company would record the changes in the fair value of the derivative instruments directly to earnings. See Item 7A. Quantitative and Qualitative Disclosures about Market Risk and Note 14, Derivative Financial Instruments, in the Consolidated Financial Statements included in this Annual Report.

The Company formally documents hedging instruments and hedged items, and measures at each balance sheet date the effectiveness of its hedges. When it is determined that a derivative is not highly effective, the derivative expires, or is sold or terminated, or the derivative is discontinued because it is unlikely that a forecasted transaction will occur, the Company discontinues hedge accounting prospectively for that specific hedge instrument.

Foreign currency derivative contracts which are entered into to hedge foreign currency exposures related to anticipated acquisitions are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in other income (expense), net in the Consolidated Statements of Operations.

The Company does not engage in speculative transactions, nor does it hold derivative instruments for trading purposes.

Deferred Financing Costs

Deferred financing costs consist of commitment fees and loan origination fees and are being amortized over the respective life of the applicable debt using a method that approximates the effective interest rate method. Deferred financing costs included in other long-term assets in the accompanying consolidated balance sheet at September 25, 2010 and September 26, 2009 were $2.8 million and $2.3 million, respectively.

Goodwill and Intangibles

Goodwill and intangible assets that have indefinite lives are not amortized but are evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets that have finite lives are amortized over their useful lives. The Company currently has no indefinite life intangible assets other than goodwill. The Company conducted its annual

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impairment test of goodwill as of September 25, 2010. If the carrying amount of the goodwill exceeds the estimated fair value, the impairment would be charged to earnings to reduce the carrying value of the goodwill to its fair value. The fair value of the reporting units was estimated using a discounted cash flow model. A number of significant assumptions and estimates are involved in the application of the discounted cash flow model including discount rate, sales volume and prices, costs to produce and working capital changes. There was no impairment of goodwill in fiscal 2010, 2009 or 2008.

Impairment of Long-Lived Assets

When facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, may be impaired, an evaluation of recoverability is performed by comparing the carrying value of the assets to projected future cash flows in addition to other quantitative and qualitative analyses. Upon indication that the carrying value of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value, less estimated costs to sell. The Company makes judgments related to the expected useful lives of long-lived assets and its ability to realize undiscounted cash flows in excess of the carrying amounts of such assets which are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions and changes in operating performance. As the Company assesses the ongoing expected cash flows and carrying amounts of its long-lived assets, these factors could cause the Company to realize a material impairment charge.

Provision for Doubtful Accounts

Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. The Company’s losses related to collection of trade accounts receivables have consistently been within management’s expectations.

Fixed Assets

Fixed assets are carried at cost, net of accumulated depreciation. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Depreciation is calculated using the straight-line method over the assets’ estimated useful lives. The cost and accumulated depreciation for fixed assets sold, retired, or otherwise disposed of are relieved from the accounts, and the resultant gains and losses are reflected in income.

The Company follows an industry-wide practice of purchasing and loaning coffee brewing and related equipment to wholesale customers. These assets are also carried at cost, net of accumulated depreciation.

Depreciation costs of manufacturing and distribution assets are included in cost of sales. Depreciation costs of other assets, including equipment on loan to customers, are included in selling and operating expenses.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred and risk of loss has transferred to the customer, the selling price is fixed or determinable, and collectability is reasonably assured.

Sales of Keurig Single-Cup coffee brewers, K-Cup^® portion packs and other coffee products are recognized net of an allowance for returns. The Company estimates the allowance for returns using an average return rate based on historical experience and an evaluation of contractual rights or obligations.

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The Company’s customers, and the Keurig AH retail channel’s end customers, whose sales are processed by the fulfillment entities, can receive certain incentives and allowances which are recorded as a reduction to sales when the sales incentive is offered and committed to or, if the incentive relates to specific sales, at the later of when that revenue is recognized or the date at which the sales incentive is offered. These incentives include, but are not limited to, cash discounts and volume based incentive programs.

SCBU

At-Home Channel

The at-home sales channel consists primarily of sales of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging including whole bean and ground coffee selections in bags to supermarkets, grocery stores and warehouse club stores in the United States and Canada. Revenue is recognized upon product delivery as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Commercial (Away-From-Home Channel)

The away-from-home channel consists primarily of sales of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging including whole bean and ground coffee selections in bags and ground coffee in fractional packs to office coffee distributors, convenience stores, restaurants and hospitality accounts. Revenue is recognized upon product delivery as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Consumer Direct

SCBU processes and fulfills orders received from its website and revenue is recognized upon product shipment as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Keurig

Retail (At-Home Channel)

The retail sales channel consists primarily of sales processed by our fulfillment entities of AH brewers, coffee, cocoa, teas and other beverages in K-Cup^® portion packs and accessories made to major retailers. Keurig relies on a single order fulfillment entity, M.Block & Sons (“MBlock”), to process the majority of sales orders for its AH single-cup business with retailers in the United States. In addition, Keurig relies on a single order fulfillment entity similar to MBlock to process the majority of sales orders for its AH single-cup business with retailers in Canada. The fulfillment entities receive and fulfill sales orders and invoice retailers. All inventories maintained at the third party fulfillment locations are owned by the Company until the fulfillment entity processes the orders and ships the product to the retailer. Title to the product passes to the fulfillment entity immediately before shipment to the retailers. The Company recognizes revenue when the fulfillment entities ship the product based on the contractual shipping terms, which generally are upon product shipment, and when all other revenue recognition criteria are met.

Commercial (Away-From-Home Channel)

All commercial brewers are sold to Keurig Authorized Distributors (KAD’s). Revenue is recognized upon product shipment as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

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Consumer Direct

Keurig processes orders received from its website, which are fulfilled by a third party fulfillment entity. Revenue is recognized upon product shipment as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Royalty revenue

Roasters licensed by Keurig to manufacture and sell K-Cup portion packs, both to Keurig for resale and to their other coffee customers, are obligated to pay a royalty to Keurig upon shipment to their customer. Keurig records royalty revenue upon shipment of K-Cup portion packs by licensed roasters to third-party customers as set forth under the terms and conditions of various licensing agreements. For shipments of K-Cup portion packs to Keurig for resale, this royalty payment is recorded as a reduction to the carrying value of the related K-Cup portion packs in inventory.

Cost of Sales

Cost of sales for the Company consists of the cost of raw materials including coffee beans, cocoa, flavorings and packaging materials; a portion of our rental expense; production, warehousing and distribution costs which include salaries; distribution and merchandising personnel; leases and depreciation on facilities and equipment used in production; the cost of brewers manufactured by suppliers; fulfillment charges (including those paid to third-parties or to fulfillment entities); warranty expense; and freight, duties and delivery expenses. All shipping and handling expenses are also included as a component of cost of sales.

Product Warranty

The Company provides for the estimated cost of product warranties in cost of sales, at the time product revenue is recognized. Warranty costs are estimated primarily using historical warranty information in conjunction with current engineering assessments applied to the Company’s expected repair or replacement costs. The estimate for warranties requires assumptions relating to expected warranty claims which can be impacted significantly by quality issues. We currently believe our warranty reserves are adequate; however, there can be no assurance that we will not experience some additional warranty expense in future periods.

Fulfillment Fees

As the Company considers its demand forecasts for AH brewers and K-Cup portion packs sold by retailers in the United States, it ships inventories primarily to MBlock and retains title to such inventories at MBlock’s warehouses until the sale of products to retailers are processed and shipped by MBlock. The fulfillment fee paid to MBlock is included as a component of cost of sales at the time the revenue is recognized. MBlock generally accepts all credit risk on sales to these retailers. The Company’s Canadian fulfillment entity functions similar to MBlock.

Advertising Costs

The Company expenses the costs of advertising the first time the advertising takes place, except for direct mail campaigns targeted directly at consumers, which are expensed over the period during which they are expected to generate sales. At September 25, 2010 and September 26, 2009, prepaid advertising costs of $1.8 million and $1.3 million, respectively, were recorded in other current assets in the accompanying consolidated balance sheet. Advertising expense totaled $52.9 million, $27.4 million, and $15.9 million, for the years ended September 25, 2010, September 26, 2009 (as restated), and September 27, 2008 (as restated), respectively.

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Self Insurance Reserves

The Company insures certain healthcare benefits provided to employees. Liabilities associated with the risks that are retained by the Company are estimated primarily by considering historical claims experience and other assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax benefits or consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company uses a more-likely-than-not measurement attribute for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements.

Stock-Based Compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments (usually stock options) based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

The Company measures the fair value of stock options using the Black-Scholes model and certain assumptions, including the expected life of the stock options, an expected forfeiture rate and the expected volatility of its common stock. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Company’s historical experience. The expected forfeiture rate is based on the Company’s historical experience. The Company uses a blended historical volatility to estimate expected volatility at the measurement date.

Significant Customer Credit Risk and Supply Risk

The majority of the Company’s customers are located in North America. With the exception of MBlock as described below, concentration of credit risk with respect to accounts receivable is limited due to the large number of customers in various channels comprising the Company’s customer base. The Company does not require collateral from customers as ongoing credit evaluations of customers’ payment histories are performed. The Company maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management’s expectations.

Keurig procures the brewers it sells from a third-party brewer manufacturer. Purchases from this brewer manufacturer amounted to approximately $380.5 million and $176.6 million in fiscal 2010 and fiscal 2009, respectively.

The Company relies on MBlock to process the majority of sales orders for our AH single-cup business with retailers in the United States. The Company is subject to significant credit risk regarding the creditworthiness of MBlock and, in turn, the creditworthiness of the retailers. Sales processed by MBlock to retailers amounted to $588.0 million and $282.5 million and the Company’s account receivables due from MBlock amounted to $81.6 million and $46.3 million at September 25, 2010, September 26, 2009, respectively. In addition, the Company’s sales processed by MBlock to Bed Bath & Beyond of its AH brewers and K-Cup^® portion packs represented approximately 14% of the Company’s consolidated net sales for fiscal 2010 and fiscal 2009.

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Research & Development

Research and development expenses are charged to income as incurred. These expenses amounted to $12.5 million in fiscal 2010, $6.1 million in fiscal 2009, and $4.1 million in fiscal 2008. These costs primarily consist of salary and consulting expenses and are recorded in selling and operating expenses in each respective segment of the Company.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on business combinations and noncontrolling interests in consolidated financial statements. This new guidance retains the fundamental requirements in previous guidance for business combinations requiring that the use of the purchase method be used for all business combinations. The acquirer is required to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Additionally, among other requirements, business combinations now require that acquisition costs are expensed as incurred, the recognition of contingencies, restructuring costs must generally be expensed and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. This guidance applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, which is fiscal year 2010 for the Company. For acquisitions completed prior to September 27, 2009, the new guidance requires that changes in deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period must be recognized in earnings rather than as an adjustment to the cost of the acquisition.

Off-Balance Sheet Arrangements

The Company’s off-balance sheet arrangements consist of certain letters of credit and are detailed in Note 11, Long-Term Debt, of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. We do not have, nor do we engage in, transactions with any special purpose entities.

Forward-Looking Statements

Certain statements contained herein are not based on historical fact and are “forward-looking statements” within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those stated here. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the impact on sales and profitability of consumer sentiment in this difficult economic environment, the Company’s success in efficiently expanding operations and capacity to meet growth, the Company’s success in efficiently and effectively integrating Timothy’s and Diedrich’s, and Van Houtte if consummated, wholesale operations and capacity into the Company’s business, the Company’s success in introducing and producing new product offerings, the ability of lenders to honor their commitments under the Company’s credit facility, competition and other business conditions in the coffee industry and food industry in general, fluctuations in availability and cost of high-quality green coffee, any other increases in costs including fuel, Keurig’s ability to continue to grow and build profits with its roaster partners in the At Home and Away from Home businesses, the Company experiencing product liability, product recall and higher than anticipated rates of warranty expense or sales returns associated with a product quality or safety issue, the impact of the loss of major customers for the Company or reduction in the volume of purchases by major customers, delays in the timing of adding new locations with existing customers, the Company’s level of success in continuing to attract

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new customers, sales mix variances, weather and special or unusual events, the impact of the inquiry initiated by the SEC and any related litigation or additional governmental investigative or enforcement proceedings, as well as other risks described more fully in the Company’s filings with the SEC. Forward-looking statements reflect management’s analysis as of the date of this filing. The Company does not undertake to revise these statements to reflect subsequent developments, other than in its regular, quarterly earnings releases.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Market risks relating to our operations result primarily from changes in interest rates and the commodity “C” price of coffee (the price per pound quoted by the Intercontinental Exchange). To address these risks, we enter into hedging transactions as described below. We do not use financial instruments for trading purposes.

For purposes of specific risk analysis, we use sensitivity analysis to determine the impacts that market risk exposures may have on our financial position or earnings.

Interest rate risks

The table below provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

	Expected maturity date
	2011			2012			2013			2014		2015		Total
Long-term debt:
Variable rate (in thousands)	$	19,000		$	19,000		$	276,700		$	—	$	—	$	314,700
Average interest rate		3.5	%		3.0	%		2.0	%		—		—		2.2	%
Fixed rate (in thousands)	$	9		$	4		$	39,800		$	—	$	—	$	39,813
Average interest rate		9.1	%		9.1	%		5.7	%		—		—		5.7	%

At September 25, 2010, we had $314.7 million outstanding under our Credit Facility subject to variable interest rates. Should interest rates (Libor and Prime rates) increase by 100 basis points, we would incur additional interest expense of $3.1 million annually. At September 26, 2009, we had $2.3 million subject to variable interest rates. As discussed further under the heading “Liquidity and Capital Resources” the Company is party to interest rate swap agreements.

The total notional amounts of these swaps at September 25, 2010, and September 26, 2009, was $79.8 million and $75.7 million, respectively. On September 25, 2010, the effect of these swaps was to limit the interest rate exposure on the outstanding balance of the Credit Facility to a fixed rate versus the 30-day Libor rate as follows: 5.4% on $19.8 million; 1.4% on $40.0 million; and 3.9% on $20.0 million. The total notional amount covered by these swaps will decrease progressively in future periods and terminates on various dates from June 2011 through December 2012.

Commodity price risks

The “C” price of coffee is subject to substantial price fluctuations caused by multiple factors, including weather and political and economic conditions in coffee-producing countries. Our gross profit margins can be significantly impacted by changes in the “C” price of coffee. We enter into fixed coffee purchase commitments in an attempt to secure an adequate supply of coffee. These agreements are tied to specific market prices (defined by both the origin of the coffee and the time of delivery) but we have significant flexibility in selecting the date of the market price to be used in each contract. We generally fix the price of our coffee contracts three to nine months prior to delivery, so that we can adjust our sales prices to the market. At September 25, 2010, the Company had approximately $204.0 million in green coffee purchase commitments, of which approximately 54% had a fixed price. At September 29, 2009, the Company had approximately $90.8 million in green coffee purchase commitments, of which approximately 46% had a fixed price.

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Commodity price risks at September 25, 2010 are as follows:

Purchase commitments	Total  Cost(1)		Pounds		"c" Price Range
Fixed	$	110,805		52,037	$	0.87 - $2.66
Variable	$	93,149		38,631	$	1.64 - $1.82
	$	203,954		90,668

⁽¹⁾ Total coffee costs typically include a premium or “differential” in addition to the “C” price.

Additionally, total coffee pounds include $13.5 million in fixed coffee prices (6.7 million pounds) that are not determined by the “C” price.

In addition, we regularly use commodity-based financial instruments to hedge price-to-be-established coffee purchase commitments with the objective of minimizing cost risk due to market fluctuations. These hedges generally qualify as cash flow hedges. Gains and losses are deferred in other comprehensive income until the hedged inventory sale is recognized in earnings, at which point gains and losses are added to cost of sales. There were no coffee futures contracts outstanding at September 25, 2010. At September 26, 2009, we held outstanding futures contracts covering 1,125,000 pounds of coffee with a fair market value of $90,000, gross of tax.

Foreign currency exchange rate risk

Internationally we currently operate in Canada. We also source our green coffee and brewers from international markets. Our international business is subject to risks, including, but not limited to: unique economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Accordingly, our future results could be materially adversely affected by changes in these or other factors. Currently, our Canadian foreign exchange risk is minimal as the functional currency of our Canadian operations is USD. In addition, our green coffee and brewer purchases are transacted in USD.

As described in Note 14, Derivative Financial Instruments, in the Notes to Consolidated Financial Statements contained in Part II; Item 8 of this Annual Report on Form 10-K, the company has entered into certain foreign currency option contracts to hedge certain foreign currency exposures denominated in Canadian dollars. These foreign currency option contracts are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in other income (expense), net in the Consolidated Statements of Operations. The Company does not engage in speculative transactions, nor does it hold derivative instruments for trading purposes.

The market risk associated with the foreign exchange option contracts resulting from currency exchange rate movements is expected to mitigate the market risk of the underlying obligation being hedged. On September 14, 2010, the Company agreed to purchase all of the issued and outstanding shares of capital stock of Van Houtte for a total purchase price of $915.0 million Canadian dollars. A hypothetical 10% movement in the foreign currency exchange rate would increase or decrease our obligation in U.S. dollars by approximately $91.5 million.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and supplementary data of the Company required in this item are set forth beginning on page F-1 of this Annual Report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

48

Item 9A. Controls and Procedures

Background

As previously reported in the Company’s Current Report on Form 8-K filed on November 19, 2010, on November 15, 2010, the board of directors of the Company, based on the recommendation of the audit committee and in consultation with management, concluded that the Company’s previously issued financial statements for the fiscal years ended September 30, 2006, September 29, 2007, September 27, 2008 and September 26, 2009 and the first three fiscal quarters of 2010 should be restated in order to correct certain identified errors. Accordingly, the Company has restated its previously issued financial statements for those periods. See Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Background on the Restatement and Note 3, Restatement of Previously Issued Financial Statements of the Notes to Consolidated Financial Statements included in Part II—Item 8—Financial Statements and Supplementary Data.

Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), as of September 25, 2010. The Company’s evaluation has identified certain material weaknesses in its internal control over financial reporting as noted below in Management’s Report on Internal Control over Financial Reporting. Based on the evaluation of these material weaknesses, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of September 25, 2010 to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on a number of factors, including the completion of the Audit Committee’s internal investigation, our internal review that identified revisions to our previously issued financial statements, and efforts to remediate the material weaknesses in internal control over financial reporting described below we believe the consolidated financial statements in this Annual Report fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods, presented, in conformity with GAAP.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

49

Under the supervision of and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the criteria in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement to the annual or interim financial statements will not be prevented or detected on a timely basis. Based upon that evaluation, management identified the following material weaknesses as of September 25, 2010 in the Company’s internal control over financial reporting, principally related to the Company’s period-end financial reporting and consolidation processes.

1. Financial statement consolidation process. The Company did not have effective controls to ensure the completeness and accuracy of the accounting for intercompany transactions in its financial statement consolidation process. The method used to identify all intercompany transactions between the business segments for purposes of performing required eliminations, and to process and to document the eliminations, was not accurately designed and adequately performed during each reporting period.

2. Accruals related to marketing and customer incentive programs. The Company did not have effective controls to ensure the completeness, accuracy and proper classification of certain marketing and customer incentive programs and related accrued liabilities. There was a lack of adequate communication between the accounting function to gather the appropriate information from the sales and marketing functions to accurately classify these liabilities and an insufficient number of personnel with an appropriate level of GAAP knowledge and experience evaluating the transactions related to these programs.

These material weaknesses resulted in the misstatement and audit adjustments of financial statement line items and related financial disclosures, as disclosed in Note 3, Restatement of Previously Issued Financial Statements, to our consolidated financial statements.

As a result of the material weaknesses in internal control over financial reporting described above, management concluded that the Company’s internal control over financial reporting was not effective as of September 25, 2010 based on the criteria established in Internal Control—Integrated Framework issued by the COSO. Additionally, these material weaknesses could result in a misstatement of the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of September 25, 2010 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Plan for Remediation of the Material Weaknesses in Internal Control Over Financial Reporting

Management has been actively engaged in the planning for, and implementation of, remediation efforts to address the material weaknesses, as well as other identified areas of risk. These remediation efforts, outlined below, are intended both to address the identified material weaknesses and to enhance the Company’s overall financial control environment. Management believes that these material weaknesses arose due to the Company’s rapid growth, both organically and through acquisitions, outpacing the development of the Company’s accounting infrastructure.

Management’s planned actions to further address these issues in fiscal 2011 include:

• the addition of more experienced accounting staff at the Company’s enterprise and business segment levels;

• a formal training program for all accounting and finance personnel, so that they remain current with accounting rules, regulations and trends as well as a formal training program for sales and marketing personnel;

50

• a thorough review of the finance and accounting departments to ensure that the areas of responsibilities are properly matched to the staff competencies and that the lines of communication and processes are as effective as possible;

• a thorough review of the processes and procedures used in the Company’s intercompany accounting, including an evaluation of possible methods to simplify and automate certain aspects of the intercompany accounting;

• development of a standardized method for the review, approval, and tracking of retail customer marketing and incentive programs, pricing and other key terms and conditions; and

• an evaluation of the Company’s key accounting policies to ensure that they are documented and standardized across business units, circulated within the appropriate Company constituencies, and reviewed and updated on a periodic basis with an view towards the interrelations of the policies across the enterprise.

The audit committee has directed management to develop a detailed plan and timetable for the implementation of the foregoing remedial measures (to the extent not already completed) and will monitor their implementation. In addition, under the direction of the audit committee, management will continue to review and make necessary changes to the overall design of the Company’s internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting.

Management believes the measures described above and others that will be implemented will remediate the control deficiencies the Company has identified and strengthen its internal control over financial reporting. Management is committed to continuous improvement of the Company’s internal control processes and will continue to diligently review the Company’s financial reporting controls and procedures. As management continues to evaluate and work to improve internal control over financial reporting, the Company may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.

Changes in Internal Control Over Financial Reporting

Diedrich (acquired on May 11, 2010) was migrated onto the Company’s common information technology (“IT”) platform effective September 26, 2010, the beginning of fiscal year 2011. Diedrich is a wholly owned subsidiary whose total assets and total net sales represent 3% and 2%, respectively, of the total consolidated financial statement amounts as of and for the year ended September 25, 2010.

Timothy’s (acquired on November 13, 2009) has not yet been migrated onto the Company’s IT platform. Timothy’s is a wholly owned subsidiary whose total assets and total net sales represent 2% and 4%, respectively, of the total consolidated financial statement amounts as of and for the year ended September 25, 2010.

In accordance with publicly available guidance from the SEC, management excluded Timothy’s and Diedrich from its evaluation of internal control over financial reporting because each was acquired by the Company in purchase business combinations during fiscal year 2010. Commencing in fiscal year 2011, Diedrich will be tested as part of the SCBU internal control testing plan and Timothy’s will be evaluated based on materiality for inclusion in our fiscal year 2011 internal control testing plan.

No changes in our internal control over financial reporting occurred during the fiscal quarter ended September 25, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

51

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Except for the information regarding the Company’s executive officers, the information called for by this Item is incorporated by reference in this report to our definitive Proxy Statement for the Company’s Annual Meeting of Stockholders to be held in March 2011, which will be filed not later than 120 days after the close of our fiscal year ended September 25, 2010 (the “Definitive Proxy Statement”).

For information concerning the executive officers of the Company, see “Executive Officers of the Registrant” in Part I of this Annual Report on Form 10-K.

Item 11. Executive Compensation

The information required by this item will be incorporated by reference to the information contained in the Definitive Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item will be incorporated by reference to the information contained in the Definitive Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item will be incorporated by reference to the information contained in the Definitive Proxy Statement.

Item 14. Principal Accounting Fees and Services

The information required by this item will be incorporated by reference to the information contained in the Definitive Proxy Statement.

52

PART IV

Item 15. Exhibits and Financial Statement Schedules

Exhibit No.	Exhibit Title
3.1	Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 in the Quarterly Report on Form 10-Q for the 12 weeks ended April 13, 2002).
3.1.1	Certificate of Amendment to Certificate of Incorporation, as amended, dated April 6, 2007 (incorporated by reference to Exhibit 3.1 in the Quarterly Report on Form 10-Q for the 12 weeks ended March 31, 2007).
3.1.2	Certificate of Amendment to Certificate of Incorporation, as amended, dated March 11, 2010 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on March 16, 2010).
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 in the Annual Report on Form 10-K for the fiscal year ended September 27, 2008).
3.3	Certificate of Merger (incorporated by reference to Exhibit 3.3 in the Quarterly Report on Form 10-Q for the 16 weeks ended January 18, 2003).
4.1	Amended and Restated Revolving Credit Agreement dated as of December 3, 2007 among Green Mountain Coffee Roasters, Inc., its guarantor subsidiaries, Bank of America, N.A., Banc of America Securities LLC and the other lender parties thereto (incorporated by reference to Exhibit 4.1 in the Annual Report on Form 10-K for the fiscal year ended September 28, 2007).
4.1.1	Amendment No. 1 dated July 18, 2008 to Amended and Restated Revolving Credit Agreement dated as of December 3, 2007 among Green Mountain Coffee Roasters, Inc., its guarantor subsidiaries, Bank of America, N.A., Banc of America Securities LLC and the other lender parties thereto (incorporated by reference to Exhibit 4.2 in the Annual Report on Form 10-K for the fiscal year ended September 27, 2008).
4.1.2	Agreement to Exercise Facility Increase Option and Amendment No. 2 dated June 29, 2009 to Amended and Restated Revolving Credit Agreement dated December 3, 2007 among Green Mountain Coffee Roasters, Inc., its guarantor subsidiaries, Bank of America, N.A., Banc of America Securities LLC and other lender parties thereto (incorporated by reference to Exhibit 4.1 in the Quarterly Report on Form 10-Q for the quarter ended June 27, 2009).
4.1.3	Amendment No. 3 dated May 11, 2010 to Amended and Restated Revolving Credit Agreement dated December 3, 2007 among Green Mountain Coffee Roasters, Inc., its guarantor subsidiaries, Bank of America, N.A., Banc of America Securities LLC and the other lender parties thereto.
10.1	Amended and Restated Lease Agreement, dated November 6, 2007 between Pilgrim Partnership L.L.C. and Green Mountain Coffee, Inc. (incorporated by reference to Exhibit 10.1 in the Annual Report on Form 10-K for the fiscal year ended September 28, 2007).
10.2	Green Mountain Coffee Roasters, Inc. Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 in the Quarterly Report on Form 10-Q for the quarter ended March 29, 2008).*
10.3	1999 Stock Option Plan of the Company (incorporated by reference to Exhibit 10.38 in the Quarterly Report on Form 10-Q for the 16 weeks ended January 18, 1999).*
	(a) Form of Stock Option Agreement.*
10.4	Employment Agreement of Stephen J. Sabol dated as of July 1, 1993 (incorporated by reference to Exhibit 10.41 in the Registration Statement on Form SB-2 (Registration No. 33-66646) filed on July 28, 1993, and declared effective on September 21, 1993).*

53

Exhibit No.	Exhibit Title
10.5	2000 Stock Option Plan of the Company (incorporated by reference to Exhibit 10.105 in the Annual Report on Form 10-K for the fiscal year ended September 30, 2000).*
	(a) Form of Stock Option Agreement*
10.6	Green Mountain Coffee Roasters, Inc., Employee Stock Ownership Plan. (incorporated by reference to Exhibit 10.6 in the Annual Report on Form 10-K for the fiscal year ended September 26, 2009).
10.6.1	Amendment to Green Mountain Coffee Roasters, Inc. Employee Stock Ownership Plan. (incorporated by reference to Exhibit 10.6.1 in the Annual Report on Form 10-K for the fiscal year ended September 26, 2009).
10.7	Green Mountain Coffee Roasters, Inc., Employee Stock Ownership Trust (incorporated by reference to Exhibit 10.114 in the Annual Report on Form 10-K for the fiscal year ended September 30, 2000).
10.8	Loan Agreement by and between the Green Mountain Coffee Roasters, Inc., Employee Stock Ownership Trust and Green Mountain Coffee, Inc., made and entered into as of April 16, 2001 (incorporated by reference to Exhibit 10.118 in the Quarterly Report on Form 10-Q for the 12 weeks ended April 14, 2001).
10.9	2002 Deferred Compensation Plan, as amended (incorporated by reference to Exhibit 10.9 in the Annual Report on Form 10-K for the fiscal year ended September 27, 2008).*
10.10	Employment Agreement between Green Mountain Coffee Roasters, Inc. and Frances G. Rathke dated as of October 31, 2003 (incorporated by reference to Exhibit 10.6 in the Quarterly Report on Form 10-Q for the quarter ended March 28, 2009).*
10.11	Letter from Green Mountain Coffee Roasters, Inc. to Frances G. Rathke re: Deferred Compensation Agreement dated as December 7, 2006 (incorporated by reference to Exhibit 10.11 in the Annual Report on Form 10-K for the fiscal year ended September 27, 2008).*
10.12	Lease Agreement dated November 15, 2005 between Pilgrim Partnership, LLC and the Company (incorporated by reference to Exhibit 10.21 in Annual Report on Form 10-K for the fiscal year ended September 24, 2005).
10.13	Amended and Restated Green Mountain Coffee Roasters, Inc. 2006 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 16, 2010).*
10.14	Keurig, Incorporated Fifth Amended and Restated 1995 Stock Option Plan (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 filed on June 22, 2006).*
10.15	Keurig, Incorporated 2005 Stock Option Plan (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-8 filed on June 22, 2006).*
10.16	Employment Agreement dated May 3, 2007 between Green Mountain Coffee Roasters, Inc. and Lawrence J. Blanford (incorporated by reference to Exhibit 10.28 to the Annual Report on Form 10-K for the year ended September 28, 2007).*
10.17	Lease Agreement dated August 16, 2007 between Keurig, Incorporated and Brookview Investments, LLC. (incorporated by reference to Exhibit 10.29 to the Annual Report on Form 10-K for the year ended September 28, 2007).
10.18	2008 Change-In-Control Severance Benefit Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 29, 2008).
10.19	Green Mountain Coffee Roasters, Inc. Senior Executive Officer Short Term Incentive Compensation Plan (incorporated by reference to Appendix D of the Definitive Proxy Statement for the March 13, 2008 Annual Meeting of Stockholders).*

54

Exhibit No.	Exhibit Title
10.20	Agreement of Sale dated June 2, 2008 by and between MS Plant, LLC and Green Mountain Coffee Roasters, Inc. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 28, 2008).
10.21	Settlement and License Agreement dated October 23, 2008 by and between Keurig, Incorporated and Kraft Foods Inc., Kraft Foods Global Inc., and Tassimo Corporation (incorporated by reference to Exhibit 10.27 in the Annual Report on Form 10-K for the fiscal year ended September 27, 2008).
10.22	Letter from Green Mountain Coffee Roasters, Inc. to Scott McCreary re: Offer Letter dated as September 10, 2004 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended December 27, 2008).*
10.23	Letter from Green Mountain Coffee Roasters, Inc. to Howard Malovany re: Offer Letter dated as January 8, 2009 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 28, 2009).*
10.24	Letter from Green Mountain Coffee Roasters, Inc. to Michelle Stacy re: Offer Letter dated as March 16, 2009 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 28, 2009).*
10.25	Letter from Green Mountain Coffee Roasters, Inc. to Scott McCreary re: Letter Amendment dated as December 29, 2008 (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended March 28, 2009).*
10.26	Letter from Green Mountain Coffee Roasters, Inc. to Steve Sabol re: Letter Amendment dated as December 31, 2008 (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q for the quarter ended March 28, 2009).*
10.27	Share Purchase Agreement dated November 13, 2009 by and between Timothy’s Coffees of the World, Inc., World Coffee Group S.á.r.l., Green Mountain Coffee Roasters, Inc. and Timothy’s Acquisition Corporation (incorporated by reference to Exhibit 2.1 on Form 8-K filed on November 13, 2009).
10.28	Common Stock Purchase Agreement dated August 10, 2010 by and between Luigi Lavazza S.p.A. and Green Mountain Coffee Roasters, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 11, 2010).
10.29	Registration Rights Agreement dated September 28, 2010 by and between Luigi Lavazza S.p.A. and Green Mountain Coffee Roasters, Inc.
10.30	Form of Indemnification Agreement dated August 10, 2010 by and between the Directors of Green Mountain Coffee Roasters, Inc. and Green Mountain Coffee Roasters, Inc.
10.31	Form of Indemnification Agreement dated August 10, 2010 by and between the Executive Officers of Green Mountain Coffee Roasters, Inc. and Green Mountain Coffee Roasters, Inc.
10.32	Share Purchase Agreement dated September 14, 2010 by and between LJVH S.á.r.l., Fonds de solidarité des Travailleurs du Québec (F.T.Q.), LJ Coffee Agent, LLC, Green Mountain Coffee Roasters, Inc., and SSR Acquisition Corporation.
21.	Subsidiary List.
23.	Consent of PricewaterhouseCoopers LLP.
31.1	Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of 2002.

55

Exhibit No.	Exhibit Title
31.2	Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Principal Executive Officer Certification Pursuant 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Principal Financial Officer Certification Pursuant 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2010 formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Comprehensive Income (v) the Consolidated Statements of Cash Flows and (vi) related notes, tagged as blocks of text.

* Management contract or compensatory plan

56

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

GREEN MOUNTAIN COFFEE ROASTERS, INC.

By:	/s/    Frances G. Rathke
	FRANCES G. RATHKE Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Lawrence J. Blanford LAWRENCE J. BLANFORD	President, Chief Executive Officer and Director (Principal Executive Officer)	December 5, 2010
/s/ Frances G. Rathke FRANCES G. RATHKE	Chief Financial Officer, Treasurer, and Secretary (Principal Financial and Accounting Officer)	December 5, 2010
/s/ Robert P. Stiller ROBERT P. STILLER	Chairman of the Board of Directors and Founder	December 5, 2010
/s/ Barbara Carlini BARBARA CARLINI	Director	December 5, 2010
/s/ Douglas Daft DOUGLAS DAFT	Director	December 5, 2010
/s/ William D. Davis WILLIAM D. DAVIS	Director	December 5, 2010
/s/ Jules A. del Vecchio JULES A. DEL VECCHIO	Director	December 5, 2010
/s/ Michael Mardy MICHAEL MARDY	Director	December 5, 2010
/s/ Hinda Miller HINDA MILLER	Director	December 5, 2010
/s/ David E. Moran DAVID E. MORAN	Director	December 5, 2010

57

Green Mountain Coffee Roasters, Inc.

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Financial Statements:
Consolidated Balance Sheets at September 25, 2010 and September 26, 2009		F-4
Consolidated Statements of Operations for each of the three years in the period ended September 25, 2010		F-5
Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended September 25, 2010		F-6
Consolidated Statements of Comprehensive Income for each of the three years in the period ended September 25, 2010		F-7
Consolidated Statements of Cash Flows for each of the three years in the period ended September 25, 2010		F-8
Notes to Consolidated Financial Statements		F-9
Financial Statement Schedule— Schedule II—Valuation and Qualifying Accounts		F-67

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and the Stockholders of Green Mountain Coffee Roasters, Inc.

In our opinion, the accompanying consolidated financial statements listed in accompanying index on page F-1 present fairly, in all material respects, the financial position of Green Mountain Coffee Roasters, Inc. and its subsidiaries at September 25, 2010 and September 26, 2009, and the results of their operations and their cash flows for each of the three years in the period ended September 25, 2010 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index on page F-1 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of September 25, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) because material weaknesses in internal control over financial reporting related to the financial statement consolidation process and marketing and customer incentive program accruals existed as of that date. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to above are described in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the September 25, 2010 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements. The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in management’s report referred to above. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note 3 to the consolidated financial statements, the Company has restated its 2007, 2008 and 2009 financial statements to correct errors.

As discussed in Note 2 to the consolidated financial statements, effective September 27, 2009, the Company has changed the manner in which it accounts for business combinations.

As discussed in Note 15 to the consolidated financial statements, effective September 28, 2008, the Company has changed the manner in which it evaluates the fair value of financial instruments.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,

F-2

accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Timothy’s Coffee of the World, Inc. and Diedrich Coffee, Inc. from its assessment of internal control over financial reporting as of September 25, 2010 because they were acquired by the Company in a purchase business combination during 2010. We have also excluded Timothy’s Coffee of the World, Inc. and Diedrich Coffee, Inc. from our audit of internal control over financial reporting. Timothy’s Coffee of the World, Inc. is a wholly owned subsidiary whose total assets and total net sales represent 2% and 4%, respectively of the total consolidated financial statement amounts as of and for the year-ended September 25, 2010. Diedrich Coffee, Inc. is a wholly owned subsidiary whose total assets and total net sales represent 3% and 2%, respectively, of the total consolidated financial statement amounts as of and for the year ended September 25, 2010.

We do not express an opinion or offer any other form of assurance on management’s statement referring to the Company’s plan for remediation of the material weaknesses in internal control over financial reporting.

/s/ PricewaterhouseCoopers LLP

Boston, MA

December 9, 2010

F-3

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

	September 25, 2010			September 26, 2009 (As Restated)
Assets
Current assets:
Cash and cash equivalents	$	4,401		$	241,811
Restricted cash and cash equivalents		355			280
Short-term investments		—			50,000
Receivables, less uncollectible accounts and return allowances of $14,056 and $4,792 at September 25, 2010 and September 26, 2009, respectively		172,200			91,559
Inventories		262,478			132,182
Income taxes receivable		5,350			—
Other current assets		23,488			11,384
Deferred income taxes, net		26,997			10,151
Total current assets		495,269			537,367
Fixed assets, net		258,923			135,981
Intangibles, net		220,005			36,478
Goodwill		386,416			99,600
Other long-term assets		9,961			3,979
Total assets	$	1,370,574		$	813,405
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	19,009		$	5,030
Accounts payable		139,220			79,772
Accrued compensation costs		24,236			17,264
Accrued expenses		49,279			19,895
Income tax payable		1,934			1,225
Other short-term liabilities		4,377			3,257
Total current liabilities		238,055			126,443
Long-term debt		335,504			73,013
Deferred income taxes, net		92,579			26,599
Other long-term liabilities		5,191			—
Commitments and contingencies (See Notes 6 and 22)
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—132,823,585 and 130,811,052 shares at September 25, 2010 and September 26, 2009, respectively		13,282			13,081
Additional paid-in capital		473,749			441,875
Retained earnings		213,844			134,338
Accumulated other comprehensive loss		(1,630	)		(1,870	)
ESOP unallocated shares, at cost—0 and 38,060 shares at September 25, 2010 and September 26, 2009, respectively		—			(74	)
Total stockholders’ equity		699,245			587,350
Total liabilities and stockholders’ equity	$	1,370,574		$	813,405

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-4

Green Mountain Coffee Roasters, Inc.

Consolidated Statements of Operations

(Dollars in thousands except per share data)

	Fifty-two weeks ended September 25, 2010			Fifty-two weeks ended September 26, 2009 (As Restated)			Fifty-two weeks ended September 27, 2008 (As Restated)
Net sales	$	1,356,775		$	786,135		$	492,517
Cost of sales		931,017			540,744			318,477
Gross profit		425,758			245,391			174,040
Selling and operating expenses		186,418			121,350			90,882
General and administrative expenses		100,568			47,655			38,480
Patent litigation (settlement) expense		—			(17,000	)		3,279
Operating income		138,772			93,386			41,399
Other income (expense)		(269	)		(662	)		(235	)
Interest expense		(5,294	)		(4,693	)		(5,705	)
Income before income taxes		133,209			88,031			35,459
Income tax expense		(53,703	)		(33,592	)		(13,790	)
Net income	$	79,506		$	54,439		$	21,669
Basic income per share:
Weighted average shares outstanding		131,529,412			113,979,588			107,774,091
Net income	$	0.60		$	0.48		$	0.20
Diluted income per share:
Weighted average shares outstanding		137,834,123			120,370,659			115,041,510
Net income	$	0.58		$	0.45		$	0.19

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-5

Green Mountain Coffee Roasters, Inc.

Consolidated Statements of Stockholders’ Equity

For the three years in the period ended September 25, 2010 (Dollars in thousands)

	Common stock				Additional paid-in capital			Retained earnings			Accumulated other compre- hensive (loss)			ESOP unallocated shares						Treasury stock						Stockholders’ Equity
	Shares		Amount											Shares			Amount			Shares			Amount
Balance at September 29, 2007, as reported		121,554,523	$	12,155	$	36,018		$	58,981		$	(512	)		(104,778	)	$	(208	)		(15,626,979	)	$	(7,336	)	$	99,098
Correction of prior period errors		—	$	—	$	—		$	(751	)	$	—			—		$	—			—		$	—			(751	)
Balance at September 29, 2007, as restated		121,554,523	$	12,155	$	36,018		$	58,230		$	(512	)	$	(104,778	)	$	(208	)		(15,626,979	)	$	(7,336	)	$	98,347
Options exercised		3,174,957		318		3,310																					3,628
Issuance of common stock under employee stock purchase plan		341,919		34		1,992																					2,026
Allocation of ESOP shares						153									23,197			47									200
Tax expense from allocation of ESOP shares						(61	)																				(61	)
Stock compensation expense						6,348																					6,348
Tax benefit from exercise of options						5,782																					5,782
Deferred compensation expense						107																					107
Other comprehensive income, net of tax												93															93
Net income, as restated		—		—		—			21,669			—			—			—			—			—			21,669
Balance at September 27, 2008, as restated		125,071,399		12,507		53,649			79,899			(419	)		(81,581	)		(161	)		(15,626,979	)		(7,336	)		138,139
Options exercised		3,802,368		381		5,391																					5,772
Issuance of common stock under employee stock purchase plan		314,265		31		2,447																					2,478
Allocation of ESOP shares						912									43,521			87									999
Issuance of common stock for public equity offering		1,623,020		162		34,631																					34,793
Issuance of common stock from treasury for public equity offering						327,664															15,626,979			7,336			335,000
Stock compensation expense						6,697																					6,697
Tax benefit from exercise of options						10,362																					10,362
Deferred compensation expense						122																					122
Other comprehensive loss, net of tax												(1,451	)														(1,451	)
Net income, as restated		—		—		—			54,439			—			—			—			—			—			54,439
Balance at September 26, 2009, as restated		130,811,052	$	13,081	$	441,875		$	134,338		$	(1,870	)		(38,060	)	$	(74	)		—		$	—		$	587,350
Options exercised		1,840,661		184		4,586																					4,770
Issuance of common stock under employee stock purchase plan		171,872		17		3,999																					4,016
Allocation of ESOP shares						1,302									38,060			74									1,376
Stock compensation expense						7,949																					7,949
Tax benefit from exercise of options						13,877																					13,877
Deferred compensation expense						161																					161
Other comprehensive income, net of tax												240															240
Net income		—		—		—			79,506			—			—			—			—			—			79,506
Balance at September 25, 2010		132,823,585	$	13,282	$	473,749		$	213,844		$	(1,630	)		—		$	—			—		$	—		$	699,245

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-6

Green Mountain Coffee Roasters, Inc.

Consolidated Statements of Comprehensive Income

(Dollars in thousands)

	Fifty-two weeks ended September 25, 2010			Fifty-two weeks ended September 26, 2009 (As Restated)			Fifty-two weeks ended September 27, 2008 (As Restated)
Net income	$	79,506		$	54,439		$	21,669
Other comprehensive income, net of tax:
Deferred gain (loss) on derivatives designated as cash flow hedges		352			(1,715	)		87
(Gain) loss on derivatives designated as cash flow hedges reclassified to net income		(112	)		264			6
Other comprehensive (loss) gain		240			(1,451	)		93
Comprehensive income	$	79,746		$	52,988		$	21,762

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-7

Green Mountain Coffee Roasters, Inc.

Consolidated Statements of Cash Flows

(Dollars in thousands)

	Fifty-two weeks ended September 25, 2010			Fifty-two weeks ended September 26, 2009 (As Restated)			Fifty-two weeks ended September 27, 2008 (As Restated)
Cash flows from operating activities:
Net income	$	79,506		$	54,439		$	21,669
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation		29,484			17,987			13,500
Amortization of intangibles		14,973			5,318			4,812
Loss on disposal of fixed assets		573			679			201
Provision for doubtful accounts		610			243			1,159
Provision for sales returns		40,139			15,943			8,251
(Gain) Loss on futures derivatives		(188	)		264			6
Tax (expense) from exercise of non-qualified options and disqualified dispositions of incentive stock options		(713	)		(399	)		(386	)
Excess tax benefits from equity-based compensation plans		(14,590	)		(10,761	)		(6,168	)
Tax expense from allocation of ESOP shares		—			(3	)		(61	)
Deferred income taxes		(6,931	)		1,683			549
Deferred compensation and stock compensation		8,110			6,819			6,455
Contributions to the ESOP		1,376			1,000			200
Changes in assets and liabilities, net of effects of acquisition:
Receivables		(102,297	)		(52,963	)		(24,819	)
Inventories		(116,653	)		(47,650	)		(44,662	)
Income tax payable, net		10,065			10,769			6,422
Other current assets		(10,767	)		(3,703	)		(1,896	)
Other long-term assets, net		(4,487	)		1,769			(660	)
Accounts payable		32,844			25,834			8,667
Accrued compensation costs		(1,830	)		6,147			4,090
Accrued expenses		23,405			5,083			4,617
Other short-term liabilities		1,645			—			—
Other long-term liabilities		5,191			—			—
Net cash (used in) provided by operating activities		(10,535	)		38,498			1,946
Cash flows from investing activities:
Proceeds from sale of short-term investments		50,000			—			—
Proceeds from receipt of note receivable		1,788			—			—
Acquisition of Timothy’s Coffee of the World Inc.		(154,208	)		—			—
Acquisition of Tully’s Coffee Corporation		—			(41,361	)		—
Acquisition of Diedrich Coffee, Inc.		(305,261	)		—			—
Purchases of short-term investments		—			(50,000	)		—
Capital expenditures for fixed assets		(118,042	)		(48,298	)		(48,718	)
Proceeds from disposal of fixed assets		526			162			407
Net cash used in investing activities		(525,197	)		(139,497	)		(48,311	)
Cash flows from financing activities:
Net change in revolving line of credit		145,000			(95,500	)		33,500
Proceeds from issuance of common stock under compensation plans		8,788			8,253			5,653
Proceeds from issuance of common stock for public equity offering		—			386,688			—
Financing costs in connection with public equity offering		—			(16,895	)		—
Excess tax benefits from equity-based compensation plans		14,590			10,761			6,168
Capital lease obligations		(217	)		—			—
Proceeds from borrowings of long-term debt		140,000			50,000			—
Deferred financing fees		(1,339	)		(1,084	)		(907	)
Repayment of long-term debt		(8,500	)		(217	)		(63	)
Net cash provided by financing activities		298,322			342,006			44,351
Net (decrease) increase in cash and cash equivalents		(237,410	)		241,007			(2,014	)
Cash and cash equivalents at beginning of period		241,811			804			2,818
Cash and cash equivalents at end of period	$	4,401		$	241,811		$	804
Supplemental disclosures of cash flow information:
Cash paid for interest	$	6,486		$	5,118		$	6,087
Cash paid for income taxes	$	42,313		$	20,368		$	6,701
Fixed asset purchases included in accounts payable and not disbursed at the end of each year	$	28,424		$	12,509		$	5,203
Noncash investing activity:
Liabilities assumed in conjunction with acquisitions	$	1,533		$	210		$	—

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

F-8

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements

1. Nature of Business and Organization

Green Mountain Coffee Roasters, Inc. (together with its subsidiaries, “the Company”) is a leader in the specialty coffee and coffee maker businesses. Green Mountain Coffee Roasters, Inc. is a Delaware corporation.

The Company manages its operations through two business segments, Specialty Coffee business unit (“SCBU”) and Keurig business unit (“Keurig”).

SCBU sources, produces and sells coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs, for use both at-home (“AH”) and away-from-home (“AFH”). These varieties are sold primarily in North American wholesale channels, including supermarkets and convenience stores, in restaurants and hospitality, to office coffee distributor and directly to consumers via its website www.greenmountaincoffee.com. In addition, SCBU sells Keurig single-cup brewers and other accessories directly to consumers and to supermarkets.

Keurig, a pioneer and leading manufacturer of gourmet single-cup brewing systems, targets its premium patented single-cup brewing systems for use both AH and AFH, mainly in North America. Keurig sells AH single-cup brewers, accessories and coffee, tea, cocoa and other beverages in K-Cup portion packs produced by SCBU and other licensed roasters to retailers by principally processing its sales orders through fulfillment entities for the AH channels. Keurig sells AFH single-cup brewers to distributors for use in offices. Keurig also sells AH brewers, a limited number of AFH brewers and K-Cup portion packs directly to consumers. Keurig earns royalty income from K-Cup portion packs when shipped by its licensed roasters, except for shipments of K-Cup portion packs by third party roasters to Keurig, for which the royalty is recognized as a reduction to the carrying cost of the inventory and as a reduction to cost of sales when sold through to third parties by Keurig.

The Company’s fiscal year ends on the last Saturday in September. Fiscal 2010, 2009 and fiscal 2008 represent the years ended September 25, 2010, September 26, 2009, and September 27, 2008, respectively. Each of these fiscal years consists of 52 weeks.

2. Significant Accounting Policies

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect amounts reported in the accompanying consolidated financial statements. Actual results could differ from those estimates.

Principles of Consolidation

The Consolidated Financial Statements of the Company include the accounts of Green Mountain Coffee Roasters, Inc. and its wholly owned subsidiaries. The Company has significant intercompany transactions and all intercompany transactions and accounts have been eliminated in consolidation. The Company currently does not have any entities accounted for on the equity method or the cost method.

F-9

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Business Combinations

The Company uses the acquisition method in accounting for business combinations and recognizes assets acquired and liabilities assumed measured at their fair values on the date acquired. Goodwill represents the excess of the purchase price over the fair value of the net assets. The Company engages a third party valuation firm to assist in determining the fair values of the assets and liabilities acquired particularly in the area of intangible assets. This valuation process involves making significant estimates which are based on interviews with management and detailed financial models including the projection of future cash flows, the weighted average cost of capital and any cost saving that are expected to be derived in the future.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents include money market funds which are carried at cost, plus accrued interest, which approximates fair value. The Company does not believe that it is subject to any unusual credit or market risk.

Short-Term Investments

Short-term investments consist of highly liquid investments, primarily certificates of deposit, with maturities over three months from the date of purchase. These assets are carried at cost, plus accrued interest, which approximates fair value due to the short maturity of these instruments.

Inventories

Inventories consist primarily of green and roasted coffee, including coffee in portion packs, purchased finished goods such as coffee brewers and packaging materials. Inventories are stated at the lower of cost or market. Cost is being measured using an adjusted standard cost method which approximates FIFO (first-in first-out). The Company regularly review whether the net realizable value of our inventory is lower than its carrying value. If our valuation shows that the net realizable value is lower than carrying value, the Company takes a charge to expense and directly reduce the value of the inventory.

The Company estimates its reserves for inventory obsolescence by examining its inventories on a quarterly basis to determine if there are indicators that the carrying values exceed net realizable value. Indicators that could result in additional inventory write downs include age of inventory, damaged inventory, slow moving products and products at the end of their life cycles. While management believes that the reserve for obsolete inventory is adequate, significant judgment is involved in determining the adequacy of this reserve.

Financial Instruments

The Company enters into various types of financial instruments in the normal course of business. Fair values are estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of perceived risk. Cash, cash equivalents, accounts receivable, accounts payable and accrued expenses are reported at carrying value and approximate fair value due to the short maturity of these instruments. Long-term debt is also reported at carrying value and approximates fair value due to the fact that the interest rate on the debt is based on variable interest rates (Libor or prime).

The fair values of short-term investments and derivative financial instruments have been determined using market information and valuation methodologies. Changes in assumptions or estimates could affect the

F-10

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

determination of fair value, however, management does not believe any such changes would have a material impact on the Company’s financial condition, results of operations or cash flows. The fair values of short-term investments and derivative financial instruments are disclosed in Note 15, Fair Value Measurements, in the Consolidated Financial Statements included in this Annual Report.

Derivative Instruments

From time to time, the Company enters into coffee futures contracts to hedge against price increases in price-to-be-fixed coffee purchase commitments and anticipated coffee purchases. Coffee purchases are generally denominated in the U.S. dollar. The Company also enters into interest rate derivatives to hedge against unfavorable changes in interest rates and foreign currency derivatives to hedge against unfavorable changes in foreign currency exchange rates. Certain of these derivative instruments qualify for hedge accounting if the hedging relationship is expected to be highly effective. Effectiveness is determined by how closely the changes in the fair value of the derivative instrument offset the changes in the fair value of the hedged item. If the derivative is determined to qualify for hedge accounting, the effective portion of the change in the fair value of the derivative instrument is recorded in other comprehensive income and recognized in earnings when the related hedged item is sold. The ineffective portion of the change in the fair value of the derivative instrument is recorded directly to earnings. If these derivative instruments do not qualify for hedge accounting, the Company would record the changes in the fair value of the derivative instruments directly to earnings. See Item 7A. Quantitative and Qualitative Disclosures about Market Risk and Note 14, Derivative Financial Instruments, in the Consolidated Financial Statements included in this Annual Report.

The Company formally documents hedging instruments and hedged items, and measures at each balance sheet date the effectiveness of its hedges. When it is determined that a derivative is not highly effective, the derivative expires, or is sold or terminated, or the derivative is discontinued because it is unlikely that a forecasted transaction will occur, the Company discontinues hedge accounting prospectively for that specific hedge instrument.

Foreign currency derivative contracts which are entered into to hedge foreign currency exposures related to anticipated acquisitions are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in other income (expense), net in the Consolidated Statements of Operations.

The Company does not engage in speculative transactions, nor does it hold derivative instruments for trading purposes.

Deferred Financing Costs

Deferred financing costs consist of commitment fees and loan origination fees and are being amortized over the respective life of the applicable debt using a method that approximates the effective interest rate method. Deferred financing costs included in other long-term assets in the accompanying consolidated balance sheet at September 25, 2010 and September 26, 2009 were $2.8 million and $2.3 million, respectively.

Goodwill and Intangibles

Goodwill and intangible assets that have indefinite lives are not amortized but are evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets that have finite lives are amortized over their useful lives. The Company

F-11

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

currently has no indefinite life intangible assets other than goodwill. The Company conducted its annual impairment test of goodwill as of September 25, 2010. If the carrying amount of the goodwill exceeds the estimated fair value, the impairment would be charged to earnings to reduce the carrying value of the goodwill to its fair value. The fair value of the reporting units was estimated using a discounted cash flow model. A number of significant assumptions and estimates are involved in the application of the discounted cash flow model including discount rate, sales volume and prices, costs to produce and working capital changes. There was no impairment of goodwill in fiscal 2010, 2009 or 2008.

Impairment of Long-Lived Assets

When facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, may be impaired, an evaluation of recoverability is performed by comparing the carrying value of the assets to projected future cash flows in addition to other quantitative and qualitative analyses. Upon indication that the carrying value of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value, less estimated costs to sell. The Company makes judgments related to the expected useful lives of long-lived assets and its ability to realize undiscounted cash flows in excess of the carrying amounts of such assets which are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions and changes in operating performance. As the Company assesses the ongoing expected cash flows and carrying amounts of its long-lived assets, these factors could cause the Company to realize a material impairment charge.

Provision for Doubtful Accounts

Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. The Company’s losses related to collection of trade accounts receivables have consistently been within management’s expectations.

Fixed Assets

Fixed assets are carried at cost, net of accumulated depreciation. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Depreciation is calculated using the straight-line method over the assets’ estimated useful lives. The cost and accumulated depreciation for fixed assets sold, retired, or otherwise disposed of are relieved from the accounts, and the resultant gains and losses are reflected in income.

The Company follows an industry-wide practice of purchasing and loaning coffee brewing and related equipment to wholesale customers. These assets are also carried at cost, net of accumulated depreciation.

Depreciation costs of manufacturing and distribution assets are included in cost of sales. Depreciation costs of other assets, including equipment on loan to customers, are included in selling and operating expenses.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred and risk of loss has transferred to the customer, the selling price is fixed or determinable, and collectability is reasonably assured.

F-12

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Sales of single cup coffee brewers, K-Cup portion packs and other coffee products are recognized net of an allowance for returns. The Company estimates the allowance for returns using an average return rate based on historical experience and an evaluation of contractual rights or obligations.

The Company’s customers and, the Keurig AH retail channel’s end customers, whose sales are processed by the fulfillment entities, can receive certain incentives and allowances which are recorded as a reduction to sales when the sales incentive is offered and committed to or, if the incentive relates to specific sales, at the later of when that revenue is recognized or the date at which the sales incentive is offered. These incentives include, but are not limited to, cash discounts and volume based incentive programs.

SCBU

At-Home Channel

The At-Home sales channel consists primarily of sales of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging including whole bean and ground coffee selections in bags to supermarkets, grocery stores and warehouse club stores in the United States and Canada. Revenue is recognized upon product delivery as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Commercial (Away-From-Home Channel)

The Away-From- Home channel consists primarily of sales of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging including whole bean and ground coffee selections in bags and ground coffee in fractional packs to office coffee distributors, convenience stores, restaurants and hospitality accounts. Revenue is recognized upon product delivery as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Consumer Direct

SCBU processes and fulfills orders received from its website and revenue is recognized upon product shipment as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Keurig

Retail (At-Home Channel)

The retail sales channel consists primarily of sales processed by our fulfillment entities of AH brewers, coffee, cocoa, teas and other beverages in K-Cup^® portion packs and accessories made to major retailers. Keurig relies on a single order fulfillment entity, M.Block & Sons (“MBlock”), to process the majority of sales orders for its AH single-cup business with retailers in the United States. In addition, Keurig relies on a single order fulfillment entity similar to MBlock to process the majority of sales orders for its AH single-cup business with retailers in Canada. The fulfillment entities receive and fulfill sales orders and invoice retailers. All inventories maintained at the third party fulfillment locations are owned by the Company until the fulfillment entity processes the orders and ships the product to the retailer. Title to the product passes to the fulfillment entity immediately before shipment to the retailers. The Company recognizes revenue when the fulfillment entities ship the product based on the contractual shipping terms, which generally are upon product shipment, and when all other revenue recognition criteria are met.

F-13

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Commercial (Away-From-Home Channel)

All commercial brewers are sold to Keurig Authorized Distributors (KAD’s). Revenue is recognized upon product shipment as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Consumer Direct

Keurig processes orders received from its website, which are fulfilled by a third party fulfillment entity. Revenue is recognized upon product shipment as defined by the contractual shipping terms and when all other revenue recognition criteria are met.

Royalty revenue

Roasters licensed by Keurig to manufacture and sell K-Cup portion packs, both to Keurig for resale and to their other coffee customers, are obligated to pay a royalty to Keurig upon shipment to their customer. Keurig records royalty revenue upon shipment of K-Cup portion packs by licensed roasters to third-party customers as set forth under the terms and conditions of various licensing agreements. For shipments of K-Cup portion packs to Keurig for resale, this royalty payment is recorded as a reduction to the carrying value of the related K-Cup portion packs in inventory.

Cost of Sales

Cost of sales for the Company consists of the cost of raw materials including coffee beans, cocoa, flavorings and packaging materials; a portion of our rental expense; production, warehousing and distribution costs which include salaries; distribution and merchandising personnel; leases and depreciation on facilities and equipment used in production; the cost of brewers manufactured by suppliers; fulfillment charges (including those paid to third-parties or to fulfillment entities); warranty expense; and freight, duties and delivery expenses. All shipping and handling expenses are also included as a component of cost of sales.

Product Warranty

The Company provides for the estimated cost of product warranties in cost of sales, at the time product revenue is recognized. Warranty costs are estimated primarily using historical warranty information in conjunction with current engineering assessments applied to the Company’s expected repair or replacement costs. The estimate for warranties requires assumptions relating to expected warranty claims which can be impacted significantly by quality issues. The Company currently believes its warranty reserves are adequate; however, there can be no assurance that the Company will not experience some additional warranty expense in future periods.

Fulfillment Fees

As the Company considers its demand forecasts for AH brewers and K-Cup portion packs sold by retailers in the United States, it ships inventories primarily to MBlock and retains title to such inventories at MBlock’s warehouses until the sale of products to retailers are processed and shipped by MBlock. The fulfillment fee paid to MBlock is included as a component of cost of sales at the time the revenue is recognized. MBlock generally accepts all credit risk on sales to these retailers. The Company’s Canadian fulfillment entity functions similar to MBlock.

F-14

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Advertising Costs

The Company expenses the costs of advertising the first time the advertising takes place, except for direct mail campaigns targeted directly at consumers, which are expensed over the period during which they are expected to generate sales. At September 25, 2010 and September 26, 2009, prepaid advertising costs of $1.8 million and $1.3 million, respectively, were recorded in other current assets in the accompanying consolidated balance sheet. Advertising expense totaled $52.9 million, $27.4 million, and $15.9 million, for the years ended September 25, 2010, September 26, 2009 (as restated), and September 27, 2008 (as restated), respectively.

Self Insurance Reserves

The Company insures certain healthcare benefits provided to employees. Liabilities associated with the risks that are retained by the Company are estimated primarily by considering historical claims experience and other assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax benefits or consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company uses a more-likely-than-not measurement attribute for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements.

Stock-Based Compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments (usually stock options) based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

The Company measures the fair value of stock options using the Black-Scholes model and certain assumptions, including the expected life of the stock options, an expected forfeiture rate and the expected volatility of its common stock. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Company’s historical experience. The expected forfeiture rate is based on the Company’s historical experience. The Company uses a blended historical volatility to estimate expected volatility at the measurement date.

Significant Customer Credit Risk and Supply Risk

The majority of the Company’s customers are located in North America. With the exception of MBlock as described below, concentration of credit risk with respect to accounts receivable is limited due to the large number of customers in various channels comprising the Company’s customer base. The Company does not require collateral from customers as ongoing credit evaluations of customers’ payment histories are performed. The Company maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management’s expectations.

Keurig procures the brewers it sells from a third-party brewer manufacturer. Purchases from this brewer manufacturer amounted to approximately $380.5 million and $176.6 million in fiscal 2010 and fiscal 2009, respectively.

F-15

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The Company relies on MBlock to process the majority of sales orders for our AH single-cup business with retailers in the United States. The Company is subject to significant credit risk regarding the creditworthiness of MBlock and, in turn, the creditworthiness of the retailers. Sales processed by MBlock to retailers amounted to $588.0 million and $282.5 million and the Company’s account receivables due from MBlock amounted to $81.6 million and $46.3 million at September 25, 2010, September 26, 2009, respectively. In addition, the Company’s sales processed by MBlock to Bed Bath & Beyond of its AH brewers and K-Cup^® portion packs represented approximately 14% of the Company’s consolidated net sales for fiscal 2010 and fiscal 2009.

Research & Development

Research and development expenses are charged to income as incurred. These expenses amounted to $12.5 million in fiscal 2010, $6.1 million in fiscal 2009, and $4.1 million in fiscal 2008. These costs primarily consist of salary and consulting expenses and are recorded in selling and operating expenses in each respective segment of the Company.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on business combinations and noncontrolling interests in consolidated financial statements. This new guidance retains the fundamental requirements in previous guidance for business combinations requiring that the use of the purchase method be used for all business combinations. The acquirer is required to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Additionally, among other requirements, business combinations now require that acquisition costs are expensed as incurred, the recognition of contingencies, restructuring costs must generally be expensed and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. This guidance applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, which is fiscal year 2010 for the Company. For acquisitions completed prior to September 27, 2009, the new guidance requires that changes in deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period must be recognized in earnings rather than as an adjustment to the cost of the acquisition.

3. Restatement of Previously Issued Financial Statements

The Company has restated its consolidated financial statements as of and for the fiscal years ended September 26, 2009 and September 27, 2008. In addition, the Company has restated its quarterly Consolidated Statements of Operations and Balance Sheets for each of the quarterly periods in fiscal 2009 and for the first three quarters of fiscal 2010, as presented in Note 24, Unaudited Quarterly Financial Data.

The restatements reflect adjustments to correct errors identified by management during the Company’s normal closing process, in the course of the Company’s regularly scheduled audit, and during the course of an internal investigation initiated by the audit committee of the board of directors of the Company in light of a previously disclosed inquiry by the staff of the Securities and Exchange Commission (“SEC”) Division of Enforcement. The audit committee of the Company’s board of directors has completed its investigation. The restatements reflect adjustments to correct errors in the Company’s intercompany eliminations; the classification and timing of the recognition of certain royalty revenues from unrelated third party roasters; the over or under accrual of certain marketing and customer incentive programs as well as the correction of

F-16

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

the classification of certain customer incentives from selling and operating expenses to a reduction in sales; and other miscellaneous adjustments. The effect of the restatements on the Company’s Balance Sheets is not material and the restatements have no effect on reported cash flow from operations. The nature and impact of these adjustments are described below and detailed in the tables below. Also see Note 24, Unaudited Quarterly Financial Data, for the impact of these adjustments on each of the quarterly periods.

Intercompany Eliminations

During the fourth quarter of fiscal 2010, the Company identified an error as a result of applying an incorrect standard cost to intercompany K-Cup portion pack inventory balances in consolidation. The SCBU business unit standard cost of K-Cup portion packs included the royalty fee due to the Keurig business unit, and management discovered that this royalty fee was not eliminated from K-Cup portion pack inventory balances. This error resulted in an overstatement of the consolidated inventory and an understatement of the cost of sales. During the close of the fiscal 2010 year, the Company also discovered an error in the application of an incorrect standard cost to intercompany Keurig brewer inventory balances held by SCBU in consolidation, which also resulted in an overstatement of consolidated inventory and an understatement of cost of sales. The cumulative effect of the errors over the restated periods resulted in a reduction to pre-tax income of approximately $8.0 million or approximately $4.9 million after income taxes. In addition, certain intercompany sales transactions were not properly eliminated, primarily in the first three quarters of fiscal 2010, resulting in an understatement of both sales and cost of sales of an equal amount of approximately $15.2 million over the restated periods and did not affect net income.

Timing of Recognition and Classification of Certain Royalties from Third Party Licensed Roasters

The Company receives royalties on K-Cup portion packs sold by third party roasters at the time of shipment in accordance with the terms and conditions of the licensing agreements with these roasters. The Company’s Keurig business segment purchases K-Cup portion packs directly from the third party licensed roasters to sell to its customers. Because royalties on K-Cup portion packs sold by third party roasters were earned at the time of shipment pursuant to the terms and conditions of the licensing agreements with these roasters, Keurig historically recorded these royalties at the time Keurig purchased the K-Cup portion packs from the licensed roasters and included them in net sales. Management has determined that the royalty should be recognized as a reduction to the carrying value of the related inventory which will reduce cost of sales when the K-Cup portion packs are sold to a third-party customer. The effect of the timing of the recognition of the royalty resulted in a $1.0 million reduction of pre-tax income or $0.7 million after income taxes, cumulative over the restated periods with a cumulative reduction in sales and cost of sales over the restated periods of approximately $39.7 million and $38.6 million, respectively.

Timing of Recognition and Classification of Certain Marketing and Customer Incentive Programs

Management discovered errors in recording certain marketing and customer incentive programs, which were generally accounted for as a selling and operating expense in the Company’s consolidated statements of operations. These programs include, but are not limited to, brewer mark-down support and funds for promotional and marketing activities. Management determined that a lack of adequate communication between the accounting function to gather the appropriate information from the sales and marketing functions resulted in expenses for certain of these programs being recorded in the wrong fiscal periods. The cumulative effect of the under-accrual of certain marketing and customer incentive program expenses over the restated periods resulted in a reduction to pre-tax income of approximately $1.4 million or approximately $0.9 million after income taxes. In addition, the Company has corrected the classification of

F-17

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

certain of these amounts as reductions to net sales instead of selling and operating expenses. Cumulatively over the restated periods, approximately $8.3 million has been classified as a reduction to net sales from selling and operating expenses.

The Company also identified an over-accrual of a liability related to certain customer incentive programs for SCBU that was due primarily to a failure to reverse an accrual related to certain customer incentive programs in the second fiscal quarter of 2010 resulting in a $0.7 million understatement of pre-tax income or approximately $0.4 million after income taxes. In addition, during fiscal 2009, the Company understated pre-tax income by approximately $0.9 million or approximately $0.5 million after income taxes due to an over-accrual of customer incentives. This over-accrual, which was identified and determined not to be material during the audit of the prior year financial statements, was initially reversed in the first quarter of 2010 and has now been reflected as part of the restatement in the fourth quarter of fiscal 2009.

Other Adjustments

In addition to the errors described above, the Company also included in the restated financial statements other adjustments related primarily to previously unrecorded immaterial adjustments identified during the audits of prior years’ financial statements. During fiscal 2008 the Company understated pre-tax income by $0.6 million due to an over-accrual of employee bonuses. This over-accrual was reversed in the first quarter of fiscal 2009. The restatement resulted in an increase to fiscal 2008 pre-tax income of $0.6 million and a corresponding decrease of the same amount in the first quarter of fiscal year 2009 pre-tax income. During fiscal years 2008 through the third quarter of fiscal 2010, the Company adjusted for the deferral of certain sales and costs related to a sales contract for which risk of loss had not yet transferred to the customer. The adjustment resulted in timing differences in when the sales and related cost of sales were recognized and resulted in a reduction to pre-tax income of approximately $0.1 million or $0.08 million after income taxes cumulative over the restated periods.

Certain of the adjustments described above, or portions thereof, relate to periods prior to fiscal 2008. The cumulative effect of those restatement adjustments on years prior to fiscal 2008 has been reflected as a $0.8 million reduction to retained earnings as of September 30, 2007 (the beginning of the Company’s 2008 fiscal year).

F-18

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The restated Consolidated Balance Sheet as of September 26, 2009 and the restated Consolidated Statements of Operations and Cash Flows for the fifty-two weeks ended September 26, 2009 and September 27, 2008 are presented below:

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

September 26, 2009

(Dollars in thousands)

	As Previously Reported on Form 10-K			Inter- Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Assets
Current assets:
Cash and cash equivalents	$	241,811		$	—		$	—		$	—		$	—		$	241,811
Restricted cash and cash equivalents		280			—			—			—			—			280
Short-term investments		50,000			—			—			—			—			50,000
Receivables, less uncollectible accounts and return allowances of $4,792 at September 26, 2009		91,559			—			—			—			—			91,559
Inventories		137,294			(2,937	)		(2,175	)		—			—			132,182
Income taxes receivable		—			—			—			—			—			—
Other current assets		9,517			—			—			—			1,867			11,384
Deferred income taxes, net		10,151			—			—			—			—			10,151
Total current assets		540,612			(2,937	)		(2,175	)		—			1,867			537,367
Fixed assets, net		135,981			—			—			—			—			135,981
Intangibles, net		36,478			—			—			—			—			36,478
Goodwill		99,600			—			—			—			—			99,600
Other long-term assets		3,979			—			—			—			—			3,979
Total assets	$	816,650		$	(2,937	)	$	(2,175	)	$	—		$	1,867		$	813,405
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	5,030		$	—		$	—		$	—		$	—		$	5,030
Accounts payable		79,772			—			—			—			—			79,772
Accrued compensation costs		17,264			—			—			—			—			17,264
Accrued expenses		18,570			—			—			(800	)		2,125			19,895
Income tax payable		2,971			(1,122	)		(829	)		303			(98	)		1,225
Other short-term liabilities		3,257			—			—			—			—			3,257
Total current liabilities		126,864			(1,122	)		(829	)		(497	)		2,027			126,443
Long-term debt		73,013			—			—			—			—			73,013
Deferred income taxes, net		26,599			—			—			—			—			26,599
Other long-term liabilities		—			—			—			—			—			—
Commitments and contingencies (See Notes 6 and 22)
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—130,811,052 at September 26, 2009		13,081			—			—			—			—			13,081
Additional paid-in capital		441,875			—			—			—			—			441,875
Retained earnings		137,162			(1,815	)		(1,346	)		497			(160	)		134,338
Accumulated other comprehensive loss		(1,870	)		—			—			—			—			(1,870	)
ESOP unallocated shares, at cost—38,060 at September 26, 2009		(74	)		—			—			—			—			(74	)
Total stockholders’ equity		590,174			(1,815	)		(1,346	)		497			(160	)		587,350
Total liabilities and stockholders’ equity	$	816,650		$	(2,937	)	$	(2,175	)	$	—		$	1,867		$	813,405

F-19

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Fifty-two weeks ended September 26, 2009

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-K			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	803,045		$	1,363		$	(14,188	)	$	(1,977	)	$	(2,108	)	$	786,135
Cost of sales		553,281			2,306			(12,990	)		—			(1,853	)		540,744
Gross profit		249,764			(943	)		(1,198	)		(1,977	)		(255	)		245,391
Selling and operating expenses		123,948			—			—			(2,598	)		—			121,350
General and administrative expenses		47,103			—			—			—			552			47,655
Patent litigation (settlement) expense		(17,000	)		—			—			—			—			(17,000	)
Operating income		95,713			(943	)		(1,198	)		621			(807	)		93,386
Other income (expense)		(662	)		—			—			—			—			(662	)
Interest expense		(4,693	)		—			—			—			—			(4,693	)
Income before income taxes		90,358			(943	)		(1,198	)		621			(807	)		88,031
Income tax expense		(34,476	)		359			455			(236	)		306			(33,592	)
Net income	$	55,882		$	(584	)	$	(743	)	$	385		$	(501	)	$	54,439
Basic income per share:
Weighted average shares outstanding		113,979,588			113,979,588			113,979,588			113,979,588			113,979,588			113,979,588
Net income	$	0.49		$	(0.01	)	$	(0.01	)	$	0.00		$	(0.00	)	$	0.48	*
Diluted income per share:
Weighted average shares outstanding		120,370,659			120,370,659			120,370,659			120,370,659			120,370,659			120,370,659
Net income	$	0.46		$	(0.00	)	$	(0.01	)	$	0.00		$	(0.00	)	$	0.45

* Does not add due to rounding.

F-20

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Fifty-two weeks ended September 27, 2008

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-K			Inter- Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	500,277		$	186		$	(6,807	)	$	(1,121	)	$	(18	)	$	492,517
Cost of sales		323,372			1,438			(6,319	)		—			(14	)		318,477
Gross profit		176,905			(1,252	)		(488	)		(1,121	)		(4	)		174,040
Selling and operating expenses		92,182			—			—			(1,300	)		—			90,882
General and administrative expenses		39,032			—			—			—			(552	)		38,480
Patent litigation (settlement) expense		3,279			—			—			—			—			3,279
Operating income		42,412			(1,252	)		(488	)		179			548			41,399
Other income (expense)		(235	)		—			—			—			—			(235	)
Interest expense		(5,705	)		—			—			—			—			(5,705	)
Income before income taxes		36,472			(1,252	)		(488	)		179			548			35,459
Income tax expense		(14,173	)		473			184			(67	)		(207	)		(13,790	)
Net income	$	22,299		$	(779	)	$	(304	)	$	112		$	341		$	21,669
Basic income per share:
Weighted average shares outstanding		107,774,091			107,774,091			107,774,091			107,774,091			107,774,091			107,774,091
Net income	$	0.21		$	(0.01	)	$	(0.00	)	$	0.00		$	0.00		$	0.20
Diluted income per share:
Weighted average shares outstanding		115,041,510			115,041,510			115,041,510			115,041,510			115,041,510			115,041,510
Net income	$	0.19		$	(0.01	)	$	(0.00	)	$	0.00		$	0.00		$	0.19	*

* Does not add due to rounding.

F-21

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Cash Flows

Fifty-two weeks ended September 26, 2009

(Dollars in thousands)

	As Previously Reported on Form 10-K			Inter- Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Cash flows from operating activities:
Net income	$	55,882		$	(584	)	$	(743	)	$	385		$	(501	)	$	54,439
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation		17,987			—			—			—			—			17,987
Amortization of intangibles		5,318															5,318
Loss on disposal of fixed assets		679			—			—			—			—			679
Provision for doubtful accounts		243			—			—			—			—			243
Provision for sales returns		15,943			—			—			—			—			15,943
Loss on futures derivatives		264			—			—			—			—			264
Tax benefit (expense) from exercise of non-qualified options and disqualified dispositions of incentive stock options		(399	)		—			—			—						(399	)
Excess tax benefits from equity-based compensation plans		(10,761	)		—			—			—			—			(10,761	)
Tax expense from allocation of ESOP shares		(3	)		—			—			—			—			(3	)
Deferred income taxes		1,683			—			—			—			—			1,683
Deferred compensation and stock compensation		6,819			—			—			—			—			6,819
Contributions to the ESOP		1,000			—			—			—			—			1,000
Changes in assets and liabilities, net of effects of acquisition:
Receivables		(52,963	)		—			—			—			—			(52,963	)
Inventories		(49,792	)		943			1,199			—			—			(47,650	)
Income tax payable, net		11,653			(359	)		(456	)		236			(305	)		10,769
Other current assets		(1,850	)		—			—			—			(1,853	)		(3,703	)
Other long-term assets, net		1,769			—			—			—			—			1,769
Accounts payable		25,834			—			—			—			—			25,834
Accrued compensation costs		5,595			—			—			—			552			6,147
Accrued expenses		3,597			—			—			(621	)		2,107			5,083
Net cash provided by operating activities		38,498			—			—			—			—			38,498
Cash flows from investing activities:
Acquisition of Tully’s Coffee Corporation		(41,361	)		—			—			—			—			(41,361	)
Purchases of short-term investments		(50,000	)		—			—			—			—			(50,000	)
Capital expenditures for fixed assets		(48,298	)		—			—			—			—			(48,298	)
Proceeds from disposal of fixed assets		162			—			—			—			—			162
Net cash used in investing activities		(139,497	)		—			—			—			—			(139,497	)

F-22

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Cash Flows—(Continued)

Fifty-two weeks ended September 26, 2009

(Dollars in thousands)

	As Previously Reported on Form 10-K			Inter- Company Elimination Adjustments		Third Party Royalty Adjustments		Marketing and Customer Incentive Expense Adjustments		Other Adjustments		As Restated
Cash flows from financing activities:
Net change in revolving line of credit		(95,500	)		—		—		—		—		(95,500	)
Proceeds from issuance of common stock under compensation plans		8,253			—		—		—		—		8,253
Proceeds from issuance of common stock for public equity offering		386,688			—		—		—		—		386,688
Financing costs in connection with public equity offering		(16,895	)		—		—		—		—		(16,895	)
Excess tax benefits from equity-based compensation plans		10,761			—		—		—		—		10,761
Proceeds from borrowings of long-term debt		50,000			—		—		—		—		50,000
Deferred financing fees		(1,084	)		—		—		—		—		(1,084	)
Repayment of long-term debt		(217	)		—		—		—		—		(217	)
Net cash provided by financing activities		342,006			—		—		—		—		342,006
Net increase in cash and cash equivalents		241,007			—		—		—		—		241,007
Cash and cash equivalents at beginning of period		804			—		—		—		—		804
Cash and cash equivalents at end of period	$	241,811		$	—	$	—	$	—	$	—	$	241,811
Supplemental disclosures of cash flow information:
Cash paid for interest	$	5,118		$	—	$	—	$	—	$	—	$	5,118
Cash paid for income taxes	$	20,368		$	—	$	—	$	—	$	—	$	20,368
Fixed asset purchases included in accounts payable and not disbursed at the end of each year	$	12,509		$	—	$	—	$	—	$	—	$	12,509
Noncash investing activity:
Liabilities assumed in conjunction with acquisitions	$	210		$	—	$	—	$	—	$	—	$	210

F-23

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Cash Flows

Fifty-two weeks ended September 27, 2008

(Dollars in thousands)

	As Previously Reported on Form 10-K			Inter- Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Cash flows from operating activities:
Net income	$	22,299		$	(779	)	$	(304	)	$	112		$	341		$	21,669
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation		13,500			—			—			—			—			13,500
Amortization of intangibles		4,812															4,812
Loss on disposal of fixed assets		201			—			—			—			—			201
Provision for doubtful accounts		1,159			—			—			—			—			1,159
Provision for sales returns		8,251			—			—			—			—			8,251
Loss on futures derivatives		6			—			—			—			—			6
Tax benefit (expense) from exercise of non-qualified options and disqualified dispositions of incentive stock options		(386	)		—			—			—			—			(386	)
Excess tax benefits from equity-based compensation plans		(6,168	)		—			—			—			—			(6,168	)
Tax expense from allocation of ESOP shares		(61	)		—			—			—			—			(61	)
Deferred income taxes		549			—			—			—			—			549
Deferred compensation and stock compensation		6,455			—			—			—			—			6,455
Contributions to the ESOP		200			—			—			—			—			200
Changes in assets and liabilities, net of effects of acquisition:
Receivables		(24,819	)		—			—			—						(24,819	)
Inventories		(46,402	)		1,252			488			—			—			(44,662	)
Income tax payable, net		6,804			(473	)		(184	)		68			207			6,422
Other current assets		(1,882	)		—			—			—			(14	)		(1,896	)
Other long-term assets, net		(660	)		—			—			—			—			(660	)
Accounts payable		8,667			—			—			—			—			8,667
Accrued compensation costs		4,642			—			—						(552	)		4,090
Accrued expenses		4,779			—			—			(180	)		18			4,617
Net cash provided by operating activities		1,946			—			—			—			—			1,946

F-24

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Cash Flows—(Continued)

Fifty-two weeks ended September 27, 2008

(Dollars in thousands)

	As Previously Reported on Form 10-K			Inter- Company Elimination Adjustments		Third Party Royalty Adjustments		Marketing and Customer Incentive Expense Adjustments		Other Adjustments		As Restated
Cash flows from investing activities:
Capital expenditures for fixed assets		(48,718	)		—		—		—		—		(48,718	)
Proceeds from disposal of fixed assets		407			—		—		—		—		407
Net cash used in investing activities		(48,311	)		—		—		—		—		(48,311	)
Cash flows from financing activities:
Net change in revolving line of credit		33,500			—		—		—		—		33,500
Proceeds from issuance of common stock under compensation plans		5,653			—		—		—		—		5,653
Excess tax benefits from equity-based compensation plans		6,168			—		—		—		—		6,168
Deferred financing fees		(907	)		—		—		—		—		(907	)
Repayment of long-term debt		(63	)		—		—		—		—		(63	)
Net cash provided by financing activities		44,351			—		—		—		—		44,351
Net (decrease) in cash and cash equivalents		(2,014	)		—		—		—		—		(2,014	)
Cash and cash equivalents at beginning of period		2,818			—		—		—		—		2,818
Cash and cash equivalents at end of period	$	804		$	—	$	—	$	—	$	—	$	804
Supplemental disclosures of cash flow information:
Cash paid for interest	$	6,087		$	—	$	—	$	—	$	—	$	6,087
Cash paid for income taxes	$	6,701		$	—	$	—	$	—	$	—	$	6,701
Fixed asset purchases included in accounts payable and not disbursed at the end of each year	$	5,203		$	—	$	—	$	—	$	—	$	5,203
Noncash investing activity:
Liabilities assumed in conjunction with acquisitions	$	—		$	—	$	—	$	—	$	—	$	—

4. Stock Split

On April 28, 2010, the Company announced that its Board of Directors had approved a three-for-one stock split effected in the form of a stock dividend of two additional shares of the Company’s common stock for every one share issued. The additional shares were distributed on May 17, 2010, to stockholders of record at

F-25

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

the close of business on May 10, 2010. The par value of the common stock remained unchanged at $0.10 per share. All share and per share data presented in this report have been adjusted to reflect this stock split.

On May 19, 2009, the Company announced that its Board of Directors had approved a three-for-two stock split effected in the form of a stock dividend of one additional share of the Company’s common stock for every two shares issued. The additional shares were distributed on June 8, 2009, to stockholders of record at the close of business on May 29, 2009. The par value of the common stock remained unchanged at $0.10 per share. All share and per share data presented in this report have been adjusted to reflect this stock split.

5. Acquisitions

Diedrich Coffee, Inc.

On May 11, 2010, the Company acquired all of the outstanding common stock of Diedrich Coffee, Inc. (“Diedrich”) a specialty coffee roaster and wholesaler located in central California for approximately $305.3 million, net of cash acquired. The acquisition was financed with cash on hand and a term loan of $140.0 million. Diedrich is a wholly-owned subsidiary of the Company with operations integrated into the SCBU.

Diedrich specializes in sourcing, roasting, and selling specialty coffee in a variety of packaging formats, including K-Cup^® portion packs whose brands include Diedrich Coffee^®, Gloria Jean’s^®, and Coffee People^®.

The allocation of the purchase price based on the fair value of the acquired assets and liabilities assumed was as follows (in thousands):

Restricted cash	$	623
Accounts receivable		10,361
Inventories		6,732
Deferred income taxes		1,733
Other current assets		2,543
Fixed assets		11,741
Intangibles		100,200
Goodwill		217,519
Other long-term asset		156
Accounts payable		(3,836	)
Accrued compensation costs		(8,670	)
Accrued expenses		(3,480	)
Deferred income taxes, long-term		(30,361	)
Total	$	305,261

Acquisition costs were expensed as incurred resulting in a charge to earnings of approximately $11.7 million for the fiscal year ended September 25, 2010 and are included in general and administrative expenses.

Amortizable intangible assets acquired include approximately $83.3 million for customer relationships and $16.9 million for product names. The weighted-average amortization period for these assets is 10 years and will be amortized on a straight-line basis over their respective useful lives.

The cost of the acquisition in excess of the fair market value of assets acquired less liabilities assumed represents acquired goodwill of approximately $217.5 million. The acquisition provides the Company with an expanded west coast presence and manufacturing and distribution synergies, which provide the basis of

F-26

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

goodwill recognized. Goodwill and intangible assets related to this acquisition are reported in the SCBU segment of the Company. The goodwill and intangible assets recognized are not deductible for tax purposes.

The acquisition was completed on May 11, 2010 and accordingly results of operations from such date have been included in the Company’s Statement of Operations. For fiscal 2010, Diedrich contributed approximately $16.6 million in revenue and $4.1 million of income before taxes.

Timothy’s Coffee of the World Inc.

On November 13, 2009, the Company acquired all of the outstanding capital stock of Timothy’s Coffee of the World Inc. (“Timothy’s”), which included its brand and wholesale coffee business. Timothy’s is as a wholly-owned Canadian subsidiary, with operations integrated into the SCBU segment. Timothy’s functional currency is the U.S. dollar.

Timothy’s wholesale business produces specialty coffee, tea and other beverages in a variety of packaged forms, including K-Cup^® portion packs, and sold under various brand names. The acquisition provides the Company with a Canadian presence, the Timothy’s brand name and a coffee roasting and packaging facility in Toronto.

Total consideration under the terms of the share purchase agreement amounted to approximately $155.7 million in U.S dollars. The share purchase agreement contains customary representations, warranties and covenants given by the parties. The total cash disbursement was $154.2 million and the Company assumed liabilities of $1.5 million which were recorded as a noncash transaction.

The allocation of the purchase price based on fair value of the acquired assets less liabilities assumed is as follows (in thousands):

Accounts receivable	$	8,732
Inventory		6,911
Other current assets		83
Fixed assets		7,827
Intangibles		98,300
Goodwill		69,297
Accounts payable		(6,852	)
Accrued compensation costs		(132	)
Accrued expenses		(966	)
Capital lease		(186	)
Deferred income taxes		(27,274	)
Total	$	155,740

Acquisition costs related to Timothy’s have been expensed as incurred and are included in general and administrative expenses in the Statement of Operations. Total acquisition-related costs of approximately $1.9 million were expensed in fiscal 2010.

Amortizable intangible assets acquired include approximately $83.2 million for customer relationships with an estimated life of 16 years, approximately $8.9 million for the Timothy’s trade name with an estimated life of 11 years and approximately $6.2 million for supply agreements with an estimated life of 11 years. The weighted-average amortization period for these assets is 15.2 years and will be amortized on a straight-line basis over their respective useful lives.

F-27

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The cost of the acquisition in excess of the fair market value of assets acquired less liabilities assumed represents acquired goodwill of approximately $69.3 million. The acquisition provides the Company with a Canadian presence and manufacturing and distribution synergies, which provide the basis of goodwill recognized. Goodwill and intangible assets related to this acquisition are reported in the SCBU segment of the Company. The goodwill recognized is not deductible for tax purposes.

The acquisition was completed on November 13, 2009 and accordingly results of operations from such date have been included in the Company’s Statement of Operations. For fiscal 2010, Timothy’s contributed approximately $37.9 million in revenue and $14.7 million of income before taxes.

Certain Assets of Tully’s Coffee Corporation

On September 15, 2008, the Company entered into an asset purchase agreement with Tully’s Coffee Corporation, a Washington corporation, and its wholly-owned subsidiary, Tully’s Bellaccino, LLC, a Washington limited liability company (collectively “Tully’s”) to acquire the Tully’s coffee brand and certain assets of its wholesale business. The transaction was completed on March 27, 2009. Since the date of acquisition, Tully’s results from operations have been included in the Company’s consolidated financial statements.

Tully’s wholesale business division distributes handcrafted coffees and related products via office coffee services, food service distributors, and supermarkets located primarily in the western states. The Company expects the geographic region encompassed by the Tully’s brand to create an advantaged opportunity for the Company to accelerate growth in the west coast by capitalizing on Tully’s brand recognition and the loyalty of its customer base. The purchase price exceeded the fair value of the acquired net assets and, accordingly, $25.8 million was allocated to goodwill, all of which is tax deductible.

Total consideration amounted to approximately $40.3 million in cash. The asset purchase agreement contains customary representations, warranties and covenants given by the parties.

The total net cash disbursement was $41.4 million. This includes $40.3 million of cash consideration paid to Tully’s for the assets associated with its wholesale business and brand and direct acquisition costs of approximately $1.1 million. The Company also assumed approximately $0.2 million in debt which was recorded as a noncash transaction and recorded exit and transition related accruals amounting to approximately $0.3 million. Exit and transition related accruals included the costs associated with the plan to relocate the Tully’s manufacturing facility to a new location.

The allocation of the purchase price based on fair value of the acquired assets less liabilities assumed is as follows (in thousands):

Inventories	$	2,191
Fixed assets		1,527
Intangible assets		12,400
Goodwill		25,780
Assumed debt		(210	)
Exit accruals		(327	)
Total	$	41,361

F-28

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Amortizable intangible assets acquired on March 27, 2009, include approximately $10.3 million for identifiable customer relationships with an average life of 13 years, approximately $2.0 million for the Tully’s trade name with an average life of 10 years and approximately $0.1 million for non-compete agreements with an average life of 5 years. The weighted-average amortization period for these assets is 12.5 years and will be amortized on a straight-line basis over their respective useful lives.

Unaudited Supplemental Pro forma Information

The following information reflects the Diedrich and Timothy’s acquisitions as if the transactions had occurred as of the beginning of the 2008 reporting period. The unaudited pro forma information does not necessarily reflect the actual results that would have occurred had the Company, Diedrich and Timothy’s been combined during the periods presented, nor is it necessarily indicative of the future results of operations of the combined companies.

The following table represents select unaudited consolidated proforma data. Data used for the fifty-two weeks ended September 26, 2009 and September 27, 2008 have been adjusted to reflect the restatements discussed in Note 3, Restatement of Previously Issued Financial Statements. (Data in thousands, except for per share data):

	Fifty-two weeks ended September 25, 2010		Fifty-two weeks ended September 26, 2009		Fifty-two weeks ended September 27, 2008
Unaudited Consolidated proforma revenue		1,380,642		844,040		549,518
Unaudited Consolidated proforma net income		79,117		52,859		5,520
Unaudited Consolidated proforma diluted earnings per share	$	0.57	$	0.44	$	0.05

6. Inventories

Inventories consist of the following (in thousands):

	September 25, 2010		September 26, 2009 (As Restated)
Raw materials and supplies	$	46,328	$	26,015
Finished goods		216,150		106,167
	$	262,478	$	132,182

Inventory values above are presented net of $3.0 million and $0.7 million of obsolescence reserves at September 25, 2010, and September 26, 2009, respectively.

At September 25, 2010, the Company had approximately $204.0 million in green coffee purchase commitments, of which approximately 54% had a fixed price. These commitments extend through 2013. The value of the variable portion of these commitments was calculated using an average “C” price of coffee of $1.80 per pound at September 25, 2010. In addition to its green coffee commitments, the Company had approximately $129.8 million in fixed price brewer inventory purchase commitments and $166.1 million in production raw materials commitments at September 25, 2010. The Company believes based on relationships established with its suppliers, that the risk of non-delivery on such purchase commitments is remote.

F-29

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

At September 25, 2010, minimum future inventory purchase commitments are as follows (in thousands):

Fiscal Year
2011	$	393,011
2012		93,246
2013		6,455
2014		1,575
2015		1,875
Thereafter		3,675
	$	499,837

7. Fixed Assets

Fixed assets consist of the following (in thousands):

	Useful Life in Years	September 25, 2010			September 26, 2009
Production equipment	1-15	$	160,080		$	91,343
Equipment on loan to wholesale customers	3-7		11,013			13,278
Computer equipment and software	1-10		41,923			34,018
Land	Indefinite		1,743			1,391
Building and building improvements	4-30		23,954			15,412
Furniture and fixtures	1-15		11,413			9,064
Vehicles	4-5		1,020			1,181
Leasehold improvements	1-20 or remaining life of lease, whichever is less		17,224			9,197
Construction-in-progress			72,161			27,332
Total fixed assets			340,531			202,216
Accumulated depreciation			(81,608	)		(66,235	)
		$	258,923		$	135,981

Total depreciation and amortization expense relating to all fixed assets was $29.5 million, $18.0 million and $13.5 million for fiscal 2010, 2009, and 2008, respectively.

Assets classified as construction-in-progress are not depreciated, as they are not ready for production use. All assets classified as construction-in-progress on September 25, 2010, are expected to be in production use before the end of fiscal 2011.

During fiscal 2010, 2009 and 2008, $1.3 million, $0.6 million, and $0.6 million respectively, of interest expense was capitalized.

The Company regularly undertakes a review of its fixed assets records. In fiscal 2010 the Company recorded no impairment charges related to obsolete equipment. In fiscal 2009 and 2008, the Company recorded impairment charges related to obsolete equipment amounting to $0.5 million, and $0.03 million, respectively. In fiscal 2009 and 2008, the impairment charges were recorded in other income (expense) on the Consolidated Statement of Operations, under the SCBU segment of the Company.

F-30

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

8. Goodwill and Intangible Assets

The following represents the change in the carrying amount of goodwill by operating segment for fiscal 2010 and 2009 (in thousands):

	SCBU		Keurig			Total
Balance at September 27, 2008	$	1,446	$	72,507		$	73,953
Acquisition of Tully’s		25,780		—			25,780
Adjustment to Keurig		—		(133	)		(133	)
Balance at September 26, 2009	$	27,226	$	72,374		$	99,600
Acquisition of Timothy’s		69,297		—			69,297
Acquisition of Diedrich		217,519		—			217,519
Balance at September 25, 2010	$	314,042	$	72,374		$	386,416

The Company has not recognized any impairment loss associated with the reporting units.

The reduction to goodwill in fiscal 2009 of $133,000 related to income tax adjustments on the Keurig acquisition.

Definite-lived intangible assets consist of the following (in thousands):

	September 25, 2010					September 26, 2009
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Intangible assets subject to amortization
Acquired technology	$	21,317	$	(11,464	)	$	21,317	$	(9,587	)
Customer and roaster agreements		25,900		(10,688	)		19,700		(7,820	)
Customer relationships		176,867		(8,915	)		10,367		(428	)
Trade names		29,256		(2,338	)		3,456		(633	)
Non-compete agreements		374		(304	)		374		(268	)
Total	$	253,714	$	(33,709	)	$	55,214	$	(18,736	)

Definite-lived intangible assets are amortized on a straight-line basis over the period of expected economic benefit. Total amortization expense was $15.0 million, $5.3 million and $4.8 million for fiscal 2010, 2009, and 2008, respectively.

The estimated useful lives of the intangible assets subject to amortization are 7 to10 years for acquired technology, 8 to 11 years for customer and roaster agreements, 7 to 16 years for customer relationships, 9 to 11 years for trade names and 2 to 5 years for non-compete agreements. The weighted average remaining life for all intangibles at September 25, 2010 is 11 years.

F-31

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The estimated aggregate amortization expense over each of the next five years is as follows (in thousands):

2011	$	22,157
2012	$	21,982
2013	$	21,772
2014	$	21,164
2015	$	19,670
Thereafter	$	113,260

9. Income Taxes

The provision for income taxes for the years ended September 25, 2010, September 26, 2009, and September 27, 2008, consists of the following (in thousands):

	September 25, 2010			September 26, 2009 (As Restated)			September 27, 2008 (As Restated)
Current tax expense:
Federal	$	41,770		$	24,491		$	10,602
State		11,921			6,379			1,960
Foreign		6,941			837			523
Total current		60,632			31,707			13,085
Deferred tax expense:
Federal		(3,694	)		2,008			849
State		(3,235	)		(123	)		(144	)
Total deferred		(6,929	)		1,885			705
Total tax expense	$	53,703		$	33,592		$	13,790

F-32

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Net deferred tax liabilities consist of the following (in thousands):

	September 25, 2010			September 26, 2009
Deferred tax assets:
Section 263A capitalized expenses	$	3,032		$	1,456
Deferred hedging losses		1,103			1,265
Deferred compensation		5,927			3,930
Acquisition costs		2,089			—
Net operaing loss carryforward		4,884			—
Capital loss carryforward		10,682			—
Valuation allowance—capital loss carryforward		(10,682	)		—
Warranty, obsolete inventory and bad debt allowance		10,658			—
Tax credit carryforwards		1,785			—
Other reserves and temporary differences		3,343			3,897
Research and development tax credit carryforwards		—			524
Gross deferred tax assets		32,821			11,072
Deferred tax liabilities:
Prepaid expenses		(418	)		(397	)
Depreciation		(23,816	)		(16,602	)
Intangible assets		(74,169	)		(10,521	)
Gross deferred tax liabilities		(98,403	)		(27,520	)
Net deferred tax liabilities	$	(65,582	)	$	(16,448	)

A reconciliation for continuing operations between the amount of reported income tax expense and the amount computed using the U.S. Federal Statutory rate of 35% is as follows (in thousands):

	September 25, 2010			September 26, 2009 (As Restated)			September 27, 2008 (As Restated)
Tax at U.S. Federal Statutory rate	$	46,623		$	30,797		$	12,056
Increase (decrease) in rates resulting from:
Foreign tax rate differential	$	(589	)	$	—		$	—
Qualified stock option compensation accounting under FAS123R		632			643			699
State taxes, net of federal benefit		5,776			4,950			1,801
Section 199 deduction		(3,055	)		(1,921	)		(906	)
Acquisition costs		5,380			—			—
Other		(1,064	)		(877	)		140
Tax at effective rates	$	53,703		$	33,592		$	13,790

As of September 25, 2010, the Company had net operating loss carryforwards of $10.5 million for federal and $22.0 million for state respectively, as well as a $26.0 million combined federal and state capital loss carryforward available to be utilized against future taxable income for years through fiscal year 2029, subject to annual limitation pertaining to change in ownership rules under the Internal Revenue Code. Based upon earnings history, the Company has concluded that it is more likely than not that the net operating loss

F-33

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

carryforwards will be utilized prior to their expiration, but the capital loss carryforward will not. The Company has recorded a valuation allowance against the entire deferred tax asset balance for the capital loss carryforward.

The total amount of unrecognized tax benefits at September 25, 2010 and September 26, 2009 was $5.5 million and $0.4 million, respectively. The amount of unrecognized tax benefits at September 25, 2010 that would impact the effective tax rate if resolved in favor of the Company is $5.5 million. The Company is indemnified for $4.9 million of the total reserve balance. If resolved in favor of the Company, the associated indemnification receivable, recorded in other long-term assets would be reduced accordingly. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes.

A reconciliation of increases and decreases in unrecognized tax benefits is as follows (in thousands):

Gross tax contingencies—September 26, 2009	$	444
Gross decreases to tax positions in prior periods		—
Gross increases to current period tax adjustments		5,036
Gross tax contingencies—September 25, 2010	$	5,480

The federal research and development tax credit expired on December 31, 2009. The Company has claimed a tax credit through December 31, 2009. In the event the legislature renews the tax credit, the Company will report an additional amount of federal tax credit as a discrete item in the quarter in which the credit is enacted. With this exception, the Company does not expect a significant change to the amount of unrecognized tax benefits within the next 12 months.

As of September 25, 2010, the Company had approximately $14.7 million of undistributed international earnings. All earnings of the Company’s foreign subsidiaries are considered indefinitely reinvested and no US deferred taxes have been provided on those earnings.

10. Segment Reporting

The Company manages its operations through two business segments: SCBU and Keurig. SCBU sources, produces and sells coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging including whole bean and ground coffee selections in bags and ground coffee in fractional packs. These varieties are sold primarily to wholesale channels, including supermarkets and convenience stores, restaurants and hospitality, and to office coffee distributors and directly to consumers in North America. In addition, SCBU sells Keurig^® single-cup brewing systems and other accessories directly to consumers and supermarkets. Throughout this report, unless otherwise noted, the information provided is on a consolidated basis.

Keurig, a pioneer and leading manufacturer of gourmet single-cup brewing systems, targets its premium patented single-cup brewing systems for use both AH and AFH, mainly in North America. Keurig sells AH single-cup brewers, accessories and coffee, tea, cocoa and other beverages in K-Cup portion packs produced by SCBU and other licensed roasters to retailers by principally processing its sales orders through fulfillment entities for the AH channels. Keurig sells AFH single-cup brewers to distributors for use in offices. Keurig also sells AH brewers, a limited number of AFH brewers and K-Cup portion packs directly to consumers. Keurig earns royalty income from K-Cup portion packs when shipped by its licensed roasters, except for shipments of K-Cup portion packs by third party roasters to Keurig, for which the royalty is recognized as a reduction to the carrying cost of the inventory and as a reduction to cost of sales when sold through to third parties by Keurig.

F-34

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The Company evaluates performance based on several factors, including business segment income before taxes. The operating segments do not share manufacturing or distribution facilities, except for brewer fulfillment at our Knoxville facility. Administrative functions such as accounting and information services are decentralized but moving toward centralization through an enterprise shared services group. In the event any materials and/or services are provided to one segment by the other, the transaction is valued at estimated market price and eliminated in consolidation. The costs of the Company’s manufacturing operations are captured within the SCBU segment while the Keurig segment does not have manufacturing facilities and purchases its saleable products from third parties, including the SCBU. The Company’s inventory and accounts receivable are captured and reported discretely within each operating segment, and fixed assets have been centralized, but are reported discretely within each operating segment.

Expenses related to certain centralized administrative functions including Human Resources, IST and Finance are allocated to the operating segments. Expenses not specifically related to either operating segment are shown separately as “Corporate.” Corporate expenses are comprised mainly of the compensation and other related expenses of certain of the Company’s senior executive officers and other selected employees who perform duties related to our entire enterprise. Corporate expenses also include interest expense, certain corporate legal and acquisition-related expenses and compensation of the board of directors. In addition, fiscal 2009 corporate expenses are offset by $17.0 million of proceeds received from a litigation settlement with Kraft. Corporate assets include cash, short-term investments and deferred tax assets.

Goodwill and intangibles related to the Frontier Natural Products Co-op, Tully’s, Timothy’s and Diedrich acquisitions are included in the SCBU reporting unit of the Company. Goodwill and intangibles related to Green Mountain Coffee Roasters, Inc.’s acquisition of Keurig are included in the Keurig reporting unit of the Company.

	For the fiscal year ended September 25, 2010 (Dollars in thousands)
	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	629,007	$	727,768	$	—		$	—		$	1,356,775
Intersegment sales	$	286,933	$	166,616	$	—		$	(453,549	)	$	—
Net sales	$	915,940	$	894,384	$	—		$	(453,549	)	$	1,356,775
Income before taxes	$	119,475	$	72,309	$	(44,133	)	$	(14,442	)	$	133,209
Total assets	$	964,738	$	432,389	$	47,779		$	(74,332	)	$	1,370,574
Stock compensation	$	2,579	$	2,092	$	3,278		$	—		$	7,949
Interest expense	$	—	$	—	$	5,294		$	—		$	5,294
Property additions	$	113,443	$	20,514	$	—		$	—		$	133,957
Depreciation and amortization	$	36,744	$	7,713	$	—		$	—		$	44,457

F-35

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

	For the fiscal year ended September 26, 2009 (As Restated) (Dollars in thousands)
	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	383,861	$	402,274	$	—		$	—		$	786,135
Intersegment sales	$	90,912	$	71,986	$	—		$	(162,898	)	$	—
Net sales	$	474,773	$	474,260	$	—		$	(162,898	)	$	786,135
Income before taxes	$	53,500	$	40,441	$	(2,770	)	$	(3,140	)	$	88,031
Total assets	$	510,725	$	259,707	$	262,917		$	(219,944	)	$	813,405
Stock compensation	$	2,325	$	1,951	$	2,421		$	—		$	6,697
Interest expense	$	—	$	—	$	4,693		$	—		$	4,693
Property additions	$	51,852	$	3,752	$	—		$	—		$	55,604
Depreciation and amortization	$	16,508	$	6,797	$	—		$	—		$	23,305
	For the fiscal year ended September 27, 2008 (As Restated) (Dollars in thousands)
	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	285,894	$	206,623	$	—		$	—		$	492,517
Intersegment sales	$	34,158	$	39,005	$	—		$	(73,163	)	$	—
Net sales	$	320,052	$	245,628	$	—		$	(73,163	)	$	492,517
Income before taxes	$	27,823	$	28,015	$	(18,691	)	$	(1,688	)	$	35,459
Total assets	$	232,571	$	190,837	$	17,786		$	(86,502	)	$	354,692
Stock compensation	$	1,978	$	2,519	$	1,851		$	—		$	6,348
Interest expense	$	—	$	—	$	5,705		$	—		$	5,705
Property additions	$	42,558	$	3,536	$	—		$	—		$	46,094
Depreciation and amortization	$	11,792	$	6,520	$	—		$	—		$	18,312

Geographic Information

Revenues are attributed to countries based on the location of the customer. Information concerning revenues of principal geographic areas is as follows (in thousands):

	Fifty-two weeks ended
	September 25, 2010		September 26, 2009 (As Restated)		September 27, 2008 (As Restated)
Revenues:
United States	$	1,313,872	$	746,392	$	480,061
Canada		42,903		39,743		12,456
	$	1,356,775	$	786,135	$	492,517

F-36

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Information concerning long-lived assets of principal geographic area is as follows (in thousands):

	Fifty-two weeks ended
	September 25, 2010		September 26, 2009
Long-lived assets:
United States		250,094		135,981
Canada		8,829		—
		258,923		135,981

11. Product Warranties

The Company offers a one-year warranty on all Keurig^® brewers it sells. Keurig provides for the estimated cost of product warranties, primarily using historical information and repair or replacement costs, at the time product revenue is recognized. During fiscal 2010, the Company experienced higher warranty returns associated with certain brewer models associated with a quality issue. The quality issue did not represent a safety concern, and is believed to be primarily tied to a component used in limited production primarily from late 2009 which came to the Company’s attention in the second quarter of fiscal 2010. The Company is continuing to replace any brewers exhibiting quality issues and has implemented hardware and software changes which it believes have corrected the issue, however, there can be no assurance that we will not experience some additional warranty expense related to this quality issue in future periods. The Company reached agreement with its suppliers and has recovered approximately $6.0 million as reimbursement related to this issue. This recovery was reflected in fiscal 2010 cost of sales as a reduction to warranty expense and substantially offsets the higher warranty expense and sales returns costs incurred in fiscal 2010.

The changes in the carrying amount of product warranty reserves for fiscal 2010 and 2009 are as follows (in thousands):

	September 25, 2010			September 26, 2009
Balance, beginning of year	$	724		$	648
Provision charged to income		14,780			3,082
Usage, net of recoveries		(8,810	)		(3,006	)
Balance, end of year	$	6,694		$	724

12. Long-Term Debt

Debt outstanding consists of the following (in thousands):

	September 25, 2010		September 26, 2009
Revolving credit facility	$	173,000	$	28,000
Term loan A facility		45,000		50,000
Term loan A1 facility		136,500		—
Office equipment capital leases		13		43
		354,513		78,043
Less current portion		19,009		5,030
	$	335,504	$	73,013

F-37

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The Company has a $415.0 million Revolving Credit Facility (the “Credit Facility”) with Bank of America, N.A. “Bank of America” and other lenders. The Credit Facility is comprised of (i) a $225.0 million senior secured revolving credit facility, (ii) a $50.0 million senior secured term loan A facility, and (iii) a $140.0 million senior secured term loan A1 facility. Both term loans are amortized at a rate of 10% annually. All borrowings under the credit facility are due in December 2012.

The Credit Facility is secured by all assets of the Company. The Credit Facility contains various negative covenants, including limitations on: liens; investments; loans and advances; indebtedness; mergers, consolidations and acquisitions; asset sales; dividends and distributions or repurchases of the Company’s capital stock; transactions with affiliates; certain burdensome agreements; and changes in the Company’s lines of business.

The Credit Facility is subject to a funded debt to adjusted EBITDA covenant and a fixed charge coverage ratio. At September 25, 2010, the Company was in compliance with the covenants.

The borrowings under the credit facility bear interest at prime or Libor rates, plus applicable margins. The average effective interest rate at September 25, 2010 and September 26, 2009 was 2.7% and 6.3%, respectively. The Company also pays a commitment fee on the average daily unused portion of the Credit Facility.

At September 25, 2010, and September 26, 2009, respectively, the Company also had $0.7 million and $0.3 million in outstanding letters of credit under the credit facility and $9.3 million and $9.7 million available under the Credit Facility to issue letters of credit.

The Company enters into interest rate swap agreements to limit the interest rate exposure to a fixed rate. In accordance with the swap agreements and on a monthly basis, interest expense is calculated based on the floating 30-day Libor rate and the fixed rate. If interest expense calculated is greater based on the 30-day Libor rate, the lender pays the difference to the Company; if interest expense as calculated is greater based on the fixed rate, the Company pays the difference to the lender. In fiscal years 2010, 2009 and 2008, the Company paid $2.3 million, $2.2 million and $1.1 million, respectively, in additional interest expense pursuant to the swap agreements. See Note 14, Derivative Financial Instruments.

Manufacturing and Office Equipment Capital Leases

The Company leases certain manufacturing equipment, copiers and fax machines. These leases require monthly installments of principal and interest totaling approximately $2,600. Maturities vary from October 2010 to July 2012.

Maturities

Scheduled maturities of long-term debt are as follows (in thousands):

Fiscal Year
2011	$	19,009
2012		19,004
2013		316,500
2014		—
2015		—
	$	354,513

F-38

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

13. Shareholders’ Equity

On August 12, 2009, the Company issued 17,250,000 shares of common stock at $22.42 per share, of which 15,626,979 shares were issued from treasury. Net proceeds were approximately $370.0 million, net of underwriting discount and other offering expenses. The Company used the proceeds to repay debt and for general corporate purposes.

14. Derivative Financial Instruments

Cash Flow Hedges

The Company is exposed to certain risks relating to ongoing business operations. The primary risks that are mitigated by financial instruments are interest rate risk and commodity price risk. The Company uses interest rate swaps to mitigate interest rate risk associated with the Company’s variable-rate borrowings and regularly enters into coffee futures contracts to hedge price-to-be-established coffee purchase commitments of green coffee with the objective of minimizing cost risk due to market fluctuations. The Company does not hold or issue derivative financial instruments for trading purposes.

The Company designates the swap agreements and coffee futures contracts as cash flow hedges and measures the effectiveness of these derivative instruments at each balance sheet date. The changes in the fair value of these instruments are classified in accumulated other comprehensive income (“OCI”). Gains and losses on these instruments are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. If it is determined that a derivative is not highly effective, the gains and losses will be reclassified into earnings upon determination.

The Company has interest rate swap agreements with Bank of America N.A. (“Bank of America”) and Sovereign Bank. During fiscal 2010, 2009 and 2008, the Company paid $2.3 million, $2.2 million and $1.1 million, respectively, pursuant to the swap agreements, which increased interest expense.

The following table summarizes the interest rate swaps outstanding at September 25, 2010 (in thousands):

Hedged Transaction	Notional Amount of Underlying Debt		Fixed Rate Received			Maturity		Fair Value of Swap
30-day LIBOR	$	19,800		5.44	%		2011	$	(647	)
30-day LIBOR	$	40,000		1.38	%		2012	$	(670	)
30-day LIBOR	$	20,000		3.87	%		2013	$	(1,416	)
	$	79,800						$	(2,733	)

The following table summarizes the interest rate swaps outstanding at September 26, 2009 (in thousands):

Hedged Transaction	Notional Amount of Underlying Debt		Fixed Rate Received			Maturity		Fair Value of Swap
30-day LIBOR	$	30,000		2.35	%		2010	$	(438	)
30-day LIBOR	$	25,700		5.44	%		2011	$	(1,551	)
30-day LIBOR	$	20,000		3.87	%		2013	$	(1,268	)
	$	75,700						$	(3,257)

F-39

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

There were no coffee futures contracts outstanding at September 25, 2010. The following table summarizes the coffee futures contracts outstanding at September 26, 2009 (in thousands):

Coffee Pounds	Average Contract Price	“C” Price	Maturity	Fair Value of Futures Contract
1,125	$1.20	$1.28	December 2009	$90
1,125				$90

The following table summarizes the fair value of the Company’s financial instruments and the location in the Consolidated Balance Sheets (in thousands):

Fair Value of Derivative Instruments (Gross of Tax)
	September 25, 2010			September 26, 2009			Balance  Sheet Classification
Coffee Futures	$	—		$	90			Other current assets
Interest Rate Swaps	$	(2,733	)	$	(3,257	)		Other short-term liabilities
Total	$	(2,733	)	$	(3,167	)

The following tables disclose the effect of the Company’s financial instruments included in the Consolidated Statement of Operations:

Effect of Derivatives Instruments on Earnings (Gross of Tax) for Fiscal 2010 (in thousands)
	Amount of Gain or (Loss) in OCI		Location of Gain or (Loss) Reclassified from OCI into Income		Amount of Gain or (Loss) Reclassified from OCI into Income
Coffee Futures	$	66		Cost of Sales	$	188
Interest Rate Swaps	$	524		Interest Expense	$	—
Total Derivatives	$	590			$	188

Effect of Derivatives Instruments on Earnings (Gross of Tax) for Fiscal 2009 (in thousands)
	Amount of Gain or (Loss) in OCI			Location of Gain or (Loss) Reclassified from OCI into Income		Amount of Gain or (Loss) Reclassified from OCI into Income
Coffee Futures	$	(251	)		Cost of Sales	$	(443	)
Interest Rate Swaps	$	(2,624	)		Interest Expense	$	—
Total Derivatives	$	(2,875	)			$	(443	)

Effect of Derivatives Instruments on Earnings (Gross of Tax) for Fiscal 2008 (in thousands)
	Amount of Gain or (Loss) in OCI			Location of Gain or (Loss) Reclassified from OCI into Income		Amount of Gain or (Loss) Reclassified from OCI into Income
Coffee Futures	$	(79	)		Cost of Sales	$	(9	)
Interest Rate Swaps	$	237			Interest Expense	$	—
Total Derivatives	$	158				$	(9	)

F-40

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The Company is exposed to credit loss in the event of nonperformance by the other parties to these financial instruments, however nonperformance is not anticipated.

Other Derivatives

The Company also enters into certain foreign currency option contracts to hedge certain foreign currency exposures denominated in Canadian dollars. These foreign currency option contracts are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in other income (expense), net in the Consolidated Statements of Operations. The Company does not use options for trading or speculative purposes.

The following table summarizes the foreign currency option contracts outstanding at September 25, 2010 (in thousands). The Company had no foreign currency option contracts outstanding at September 26, 2009.

Foreign Currency Option	Call Currency		Notional Equivalent		Strike Price		Expiry	Fair Value of Option
Buy CAD Call	$	100,000 CAD	$	99,010 USD		1.01	November 30, 2010	$	1,115
Sell CAD Put	$	95,238 USD	$	100,000 CAD		1.05	November 30, 2010	$	(1,118	)
Buy CAD Call	$	50,000 CAD	$	49,383 USD		1.0125	November 30, 2010	$	602
Sell CAD Put	$	47,506 USD	$	50,000 CAD		1.0525	November 30, 2010	$	(525	)

During fiscal 2010, the Company recorded net foreign currency transaction losses of approximately $0.5 million. There were no gains or losses relating to foreign currency option contracts in fiscal 2009 and 2008.

15. Fair Value Measurements

The Company measures fair value as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous market on the measurement date. The hierarchy established by the FASB prioritizes fair value measurements based on the types of inputs used in the valuation technique. The inputs are categorized into the following levels:

Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices that are observable, either directly or indirectly, for identical or similar assets and liabilities in active or non-active markets

Level 3 – Unobservable inputs not corroborated by market data, therefore requiring the entity to use the best available information, including management assumptions

The following table discloses the level used by fair value measurements at September 25, 2010 (in thousands):

	Fair Value Measurements Using							Balance Sheet Classification
	Level 1		Level 2			Level 3
Short-term Investment	$	—	$	—		$	—		Short-term investments
Derivatives	$	—	$	1,717		$	—		Other current assets
Derivatives	$	—	$	(4,377	)	$	—		Other short-term liabilities
Total	$	—	$	(2,660	)	$	—

F-41

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The following table discloses the level used by fair value measurements at September 26, 2009 (in thousands):

	Fair Value Measurements Using							Balance Sheet Classification
	Level 1		Level 2			Level 3
Short-term Investment	$	—	$	50,000		$	—		Short-term investments
Derivatives	$	—	$	90		$	—		Other current assets
Derivatives	$	—	$	(3,257	)	$	—		Other short-term liabilities
Total	$	—	$	(46,833	)	$	—

Derivative financial instruments include coffee futures contracts, interest rate swap agreements and foreign currency option contracts. Short-term investments include certificates of deposit. To determine fair value, the Company utilizes the market-approach valuation technique for coffee futures, foreign currency options and certificates of deposit and the income-approach for interest rate swap agreements.

Level 2 derivative financial instruments use inputs that are based on market data of identical (or similar) instruments, including forward prices for commodities, interest rates curves and spot prices, that are in observable markets. All derivatives on the balance sheet are recorded at fair value with changes in fair value recorded in other comprehensive income for temporary valuation adjustments and in the statement of operations for settlement of contracts.

16. Employee Compensation Plans

Stock Option Plans

On September 25, 2001, the Company registered on Form S-8 the 2000 Stock Option Plan (the “2000 Plan”). Under this plan, 10,800,000 shares of common stock are available for grants of both incentive and non-qualified stock options. Grants under the 2000 Plan generally expire 10 years after the grant date, or earlier if employment terminates. At September 25, 2010 and September 26, 2009, options for 4,980 shares and 81 shares of common stock were available for grant under the plan, respectively.

On March 16, 2006, stockholders of the Company approved the Company’s 2006 Incentive Plan (the “2006 Plan”). The 2006 Plan was amended on March 13, 2008 and on March 11, 2010 to increase the total shares of common stock authorized for issuance to 13,200,000. At September 25, 2010 and September 26, 2009, options for 6,137,338 shares and 703,809 shares of common stock were available for grant under the plan, respectively.

In connection with the acquisition of Keurig, the Company assumed the existing outstanding unvested option awards of the Keurig, Incorporated Fifth Amended and Restated 1995 Stock Option Plan (the “1995 Plan”) and the Keurig, Incorporated 2005 Stock Option Plan (the “2005 Plan”). No shares under either the 1995 Plan or the 2005 Plan were eligible for post-acquisition awards. At September 25, 2010, and September 26, 2009, 28,194 and 95,535 options out of the 1,386,909 options for shares of common stock granted were outstanding under the 1995 Plan, respectively. At September 25, 2010, and September 26, 2009, 282,647 options and 529,890 options out of the 1,490,577 options granted for shares of common stock were outstanding under the 2005 Plan, respectively. All awards assumed in the acquisition were initially granted with a four-year vesting schedule and continue to vest in accordance with their existing terms.

On May 3, 2007, Mr. Lawrence Blanford commenced his employment as the President and Chief Executive Officer of the Company. Pursuant to the terms of the employment, the Company made an inducement grant

F-42

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

on May 4, 2007, to Mr. Blanford of a non-qualified option to purchase 945,000 shares of the Company’s common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option will vest in 20% installments on each of the first five anniversaries of the date of the grant, provided that Mr. Blanford remains employed with the Company on each vesting date.

On November 3, 2008, Ms. Michelle Stacy commenced her employment as the President of Keurig, Incorporated. Pursuant to the terms of the employment, the Company made an inducement grant on November 3, 2008, to Ms. Stacy of a non-qualified option to purchase 157,500 shares of the Company’s common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option will vest in 25% installments on each of the first four anniversaries of the date of the grant, provided that Ms. Stacy remains employed with the Company on each vesting date.

On February 9, 2009, Mr. Howard Malovany commenced his employment as the Vice President, Corporate General Counsel and Secretary of the Company. Pursuant to the terms of the employment, the Company made an inducement grant on February 9, 2009, to Mr. Malovany of a non-qualified option to purchase 157,500 shares of the Company’s common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option will vest in 25% installments on each of the first four anniversaries of the date of the grant, provided that Mr. Malovany remains employed with the Company on each vesting date.

Under the 2000 Plan, the option price for each incentive stock option shall not be less than the fair market value per share of common stock on the date of grant, with certain provisions which increase the option price to 110% of the fair market value of the common stock if the grantee owns in excess of 10% of the Company’s common stock at the date of grant. The 2006 Plan requires the exercise price for all awards requiring exercise to be no less than 100% of fair market value per share of common stock on the date of grant, with certain provisions which increase the option price to 110% of the fair market value of the common stock if the grantee owns in excess of 10% of the Company’s common stock at the date of grant. Options under the 2000 Plan and the 2006 Plan become exercisable over periods determined by the Board of Directors, generally in the range of four to five years.

Option activity is summarized as follows:

	Number of Shares			Weighted Average Exercise Price (per share)
Outstanding at September 26, 2009		11,709,534		$	4.33
Granted		580,250		$	30.61
Exercised		(1,840,661	)	$	3.60
Forfeited		(20,838	)	$	8.44
Outstanding at September 25, 2010		10,428,285		$	6.06
Exercisable at September 25, 2010		6,915,073		$	3.68

The following table summarizes information about stock options expected to vest at September 25, 2010 (dollars in thousands):

Range of exercise price	Number of options outstanding		Weighted average remaining contractual life (in years)		Weighted average exercise price		Intrinsic value at September 25, 2010
$ 0.65 - $35.24		10,383,958		6.21		6.08	$	313,049

F-43

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The following table summarizes information about stock options exercisable at September 25, 2010 (dollars in thousands):

Range of exercise price	Number of options exercisable		Weighted average remaining contractual life (in years)		Weighted average exercise price		Intrinsic value at September 25, 2010
$ 0.65 - $22.98		6,915,073		5.33		3.68	$	224,347

Compensation expense is recognized only for those options expected to vest, with forfeitures estimated based on the Company’s historical employee turnover experience and future expectations.

The Company uses a blend of recent and historical volatility to estimate expected volatility at the measurement date. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Company’s historical experience.

Income before income taxes was reduced by $7.9 million, $6.7 million and $6.3 million (gross of tax), respectively, due to the recognition of stock compensation expense for the years ended September 25, 2010, September 26, 2009, and September 27, 2008, respectively. Net of tax, stock compensation expense was $5.4 million, $4.7 million and $4.8 million for the years ended September 25, 2010, September 26, 2009, and September 27, 2008, respectively.

Total unrecognized share-based compensation costs related to unvested stock options expected to vest were approximately $15.6 million as of September 25, 2010, which related to approximately 3,469,000 shares. This unrecognized cost is expected to be recognized over a weighted average period of approximately 1 year at September 25, 2010. The intrinsic values of options exercised during fiscal 2010 and fiscal 2009 were approximately $49.7 million and $35.2 million, respectively. The Company’s policy is to issue new shares upon exercise of stock options.

The grant-date fair value of employee share options and similar instruments is estimated using the Black-Scholes option-pricing model with the following assumptions for grants issued during fiscal 2010: an expected life averaging 6 years; an average volatility of 53%; no dividend yield; and a risk-free interest rate averaging 3%. The weighted-average fair value of options granted during fiscal 2010 was $15.79.

The following assumptions for grants issued during fiscal 2009: an expected life averaging 6 years; an average volatility of 52%; no dividend yield; and a risk-free interest rate averaging 2%. The weighted-average fair value of options granted during fiscal 2009 was $4.57.

The following assumptions were used for option grants issued during fiscal 2008: an expected life averaging 6 years; an average volatility of 45%; no dividend yield; and a risk-free interest rate averaging 3%. The weighted-average fair value of options granted during fiscal 2008 was $3.21.

Employee Stock Purchase Plan

On October 5, 1998, the Company registered on Form S-8 the 1998 Employee Stock Purchase Plan. On March 13, 2008, the plan was amended and renamed the Amended and Restated Employee Stock Purchase Plan (“ESPP”). Under this plan, eligible employees may purchase shares of the Company’s common stock, subject to certain limitations, at the lesser of 85 percent of the beginning or ending withholding period fair market value as defined in the plan. There are two six-month withholding periods in each fiscal year. At September 25, 2010, and September 26, 2009, options for 2,010,617 and 2,183,460 shares of common stock were available for purchase under the plan, respectively.

F-44

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The grant-date fair value of employees’ purchase rights granted during fiscal 2010 under the Company’s ESPP is estimated using the Black-Scholes option-pricing model with the following assumptions: an expected life equal to 6 months; an average volatility of 49%; no dividend yield; and an average risk-free interest rate equal to 0%. The weighted-average fair value of purchase rights granted during fiscal 2010 was $7.90.

The assumptions used for fiscal 2009 ESPP grants were: an expected life equal to 6 months; an average volatility of 66%; no dividend yield; and an average risk-free interest rate equal to 1.0%. The weighted-average fair value of purchase rights granted during fiscal 2009 was $3.16.

The assumptions used for fiscal 2008 ESPP grants were: an expected life equal to 6 months; an average volatility of 59%; no dividend yield; and an average risk-free interest rate equal to 3%. The weighted-average fair value of purchase rights granted during fiscal 2008 was $2.23.

17. Defined Contribution Plan

The Company has a defined contribution plan which meets the requirements of section 401(k) of the Internal Revenue Code. As of January 1, 2008, the defined contribution plan of the Keurig subsidiary was merged into the Company’s defined contribution plan. All regular full- time employees of the Company who are at least eighteen years of age and work a minimum of 36 hours per week are eligible to participate in the plan. The plan allows employees to defer a portion of their salary on a pre-tax basis and the Company contributes 50% of amounts contributed by employees up to 6% of their salary. Company contributions to the plan amounted to $2.0 million, $1.5 million, and $1.2 million, for the years ended September 25, 2010, September 26, 2009, and September 27, 2008, respectively.

Prior to January 1, 2008, the Keurig subsidiary of the Company had a separate defined contribution plan that met the requirements of section 401(k) of the Internal Revenue Code. All regular full-time employees of Keurig who were at least eighteen years of age and had completed three months of service were eligible to participate in the plan. The plan allowed employees to defer a portion of their salary on a pre-tax basis and the Company contributed 50% of amounts contributed by employees up to 6% of their salary. Company contributions to the Keurig plan amounted to $62,000 for the fiscal year ended September 27, 2008.

18. Employee Stock Ownership Plan

On September 14, 2000, the Board of Directors of the Company adopted a resolution establishing the Green Mountain Coffee, Inc., Employee Stock Ownership Plan (the “ESOP”) and the related Green Mountain Coffee, Inc., Employee Stock Ownership Trust (the “Trust”). The ESOP is qualified under sections 401(a) and 4975(e)(7) of the Internal Revenue Code. All employees of the Company (not including its Keurig subsidiary prior to 2009) with one year or more of service who are at least twenty-one years of age are eligible to participate in the Plan, in accordance with the terms of the Plan. The Company may, at its discretion, contribute shares of Company stock or cash that is used to purchase shares of Company stock. Company contributions are credited to eligible participants’ accounts pro-rata based on their compensation. Plan participants become vested in their Plan benefits ratably over four years from the date of hire of the employee.

In April 2001, a total of 168,750 shares were purchased at a cost of $0.2 million in the open market and distributed directly to participants. On April 16, 2001, the Company made a $2.0 million loan to the Trust to provide funds for the open-market purchases of the Company’s common stock. This loan bears interest at an

F-45

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

annual rate of 8.5% and provides for annual repayments to the Company. The loan matured on September 25, 2010. Between April 19, 2001, and August 21, 2001, the Trust purchased 996,300 shares of the Company’s common stock at an average price of $2.01 per share. The fair value of unearned ESOP shares at September 26, 2009 was $0.9 million or $22.98 per share. There were no unearned shares remaining in the ESOP at September 25, 2010.

Compensation costs for the ESOP recorded by the Company were $1.4 million for the year ended September 25, 2010, $1.0 million for the year ended September 26, 2009 and $0.2 million for the year ended September 27, 2008.

After the close of 2009 and 2008 calendar years, 43,521 shares and 23,196 shares were transferred from the unallocated ESOP pool of shares and allocated to participants’ accounts, respectively. At September 25, 2010, 38,060 shares had been committed to be released to participants’ accounts at the end of the calendar 2010 year.

19. Deferred Compensation Plan

The 2002 Deferred Compensation Plan, amended in December 2007, permits certain highly compensated officers and employees of the Company and non-employee directors to defer eligible compensation payable for services rendered to the Company. Participants may elect to receive deferred compensation in the form of cash payments or shares of Company Common Stock on the date or dates selected by the participant or on such other date or dates specified in the Deferred Compensation Plan. The Deferred Compensation Plan is in effect for compensation earned on or after September 29, 2002. As of September 25, 2010, and September 26, 2009, 367,862 shares and 373,734 shares of Common Stock were available for future issuance under this Plan, respectively. As of September 25, 2010, and September 26, 2009, rights to acquire 81,039 and 75,494 shares of Common Stock were outstanding under this Plan, respectively. As of September 25, 2010, and September 26, 2009, 1,098 and 772 shares of Common Stock were committed under this Plan, respectively.

20. Patent Litigation Settlement

On October 23, 2008, Keurig entered into a Settlement and License Agreement with Kraft Foods, Inc., Kraft Foods Global, Inc., and Tassimo Corporation (collectively “Kraft”) providing for a complete settlement of Keurig’s previously filed lawsuit against Kraft. Pursuant to the terms of the Settlement and License Agreement, Kraft paid to Keurig a lump sum of $17.0 million and Keurig grants to Kraft and its affiliates a limited, non-exclusive, perpetual, worldwide, fully paid up license of certain Keurig patents.

21. Related Party Transactions

The Company uses travel services provided by Heritage Flight, a charter air services company acquired in September 2002 by Mr. Stiller, the Company’s Chairman of the Board. During fiscal years 2010, 2009, and 2008, the Company was billed a total of $0.4 million, $0.2 million, and $0.3 million, respectively, by Heritage Flight for travel services provided to various employees of the Company.

F-46

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

22. Commitments and Contingencies

Lease Commitments

The Company leases office and retail space, production, distribution and service facilities, and certain equipment under various non-cancelable operating leases, with terms ranging from one to twenty years. Property leases normally require payment of a minimum annual rental plus a pro-rata share of certain landlord operating expenses. Total rent expense under all operating leases approximated $9.2 million, $6.8 million, and $5.2 million in fiscal 2010, 2009, and 2008, respectively.

At September 25, 2010, minimum future lease payments under non cancellable leases are as follows (in thousands):

Fiscal Year	Operating Leases
2011	$	8,577
2012		7,588
2013		5,681
2014		5,460
2015		5,514
Thereafter		3,418
Total minimum lease payments	$	36,238

The Company has subleases relating to certain of its operating leases. Sublease income approximated $0.03 million for fiscal 2010. The Company had no subleases during fiscal years 2009 and 2008.

At September 25, 2010, minimum rentals to be received under noncancelable subleases are as follow (in thousands):

Fiscal Year	Subleases
2011	$	157
2012		161
2013		165
2014		76
2015		63
Thereafter		—
Total minimum sublease income	$	622

Long-Term Debt Commitments

See Note 12, Long-Term Debt, for scheduled maturities of long-term debt.

Inventory Purchase Commitments

See Note 6, Inventories, for scheduled maturities of inventory purchase commitments.

Other Contingencies

In conjunction with its purchase of Keurig’s stock in 2002, the Company had issued Stock Appreciation Rights (“SARs”). Upon consummation of a liquidity event involving the stock of Keurig as defined in the SARs agreement, the Company would be required to record an expense equal to the difference between the

F-47

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

value of Keurig’s stock and the price paid by the Company when it acquired Keurig stock in 2002. The Merger was not considered a liquidity event, and therefore no payments under these SARs agreements were made upon consummation of the Merger. However, the agreement remains in effect and, under certain circumstances, if the Company were to sell Keurig, the sale may trigger a liquidity event under the agreement. At September 25, 2010, the Company estimated that it would have been required to record an expense equal to $6.1 million, had a liquidity event occurred.

In conjunction with the acquisition of Van Houtte (see Note 25, Subsequent Events), the Company is subject to a reverse break-up fee of $91.5 million Canadian dollars if the Company breaches its obligation to close the transaction. In addition, if the Purchase Agreement is terminated as a result of failure to obtain regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the Competition Act (Canada), as amended, the Company will be obligated to pay a termination fee to the sellers of $36.6 million Canadian dollars if the termination occurs on or prior to December 31, 2010, and $45.75 million Canadian dollars if the termination occurs after December 31, 2010.

Legal Proceedings

On October 1, 2010, Keurig sued Sturm Foods, Inc. (“Sturm”) for patent and trademark infringement, false advertising, and other claims, related to Sturm’s sale of “Grove Square” beverage cartridges that claim to be compatible with Keurig brewers. Keurig’s suit, brought in the United States District Court for the District of Delaware (Civil Action No. 1:10-CV-00841-SLR), alleges that the “Grove Square” cartridges contain instant rather than fresh-brewed coffee, improperly use Keurig’s trademark, and do not work safely or effectively, in addition to violating Keurig patents. Keurig seeks an injunction prohibiting Sturm from selling these cartridges, as well as money damages. On October 18, 2010, Keurig requested that the court issue a preliminarily injunction on the trademark and false advertising claims pending final resolution of the case.

As previously disclosed on a Current report on Form 8-K dated September 28, 2010, the staff of the SEC’s Division of Enforcement informed the Company that it was conducting an inquiry into matters at the Company. The Company, at the direction of the audit committee of the Company’s board of directors, is cooperating fully with the SEC staff’s inquiry.

The Company and certain of its officers and directors are currently subject to five putative securities fraud class actions and three putative stockholder derivative actions.

The putative securities fraud class actions consist of the following, all filed in the United States District Court for the District of Vermont and pending before the Honorable William K. Sessions, III: Dan M. Horowitz v. Green Mountain Coffee Roasters, et al., Civ. No. 2:10-cv-00227; Zane Hathaway v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00239; Jerzy Warchol v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00238; Russell Blank v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00267; and Paulo Sebastian Menendez v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:10-cv-00273. These actions allege violations of the federal securities laws in connection with the Company’s disclosures relating to its revenues and its forward guidance. The complaints include counts for violation of Section 10(b) of the Exchange Act and Rule 10b-5 against all defendants, and for violation of Section 20(a) of the Exchange Act against the officer defendants. The actions seek to represent all purchasers of the Company’s securities between July 28, 2010 and September 28, 2010 or September 29, 2010. The actions seek class certification, compensatory damages, equitable and/or injunctive relief, attorneys’ fees, costs, and such other relief as the court should deem just and proper. Pursuant to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(3), plaintiffs had until November 29, 2010

F-48

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

to move the court to serve as lead plaintiff of the putative class, following which the court will determine which plaintiff will serve as lead plaintiff. On November 29, 2010, the court granted a stipulated motion filed by the parties providing for the filing of an amended consolidated complaint 60 days after the court appoints a lead plaintiff, and entering a briefing schedule for defendants’ motions to dismiss.

The stockholder derivative actions consist of the following: Daniel Himmel v. Robert P. Stiller, et al., Civ. No. 2:10-cv-00233 and Lewis J. Smith v. Lawrence Blanford, et al., Civ. No. 2:10-cv-00253, both filed in the United States District Court for the District of Vermont and pending before the Honorable William K. Sessions, III; and M. Elizabeth Dickenson v. Robert P. Stiller, et al., Civ. No. 818-11-10, filed in the Superior Court of the State of Vermont for Washington County. The derivative complaints are asserted nominally on behalf of the Company against certain of its directors and officers and are premised on the same allegations asserted in the putative securities class action complaints described above. The derivative complaints assert claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. The complaints seek compensatory damages, injunctive relief, restitution, disgorgement, attorneys’ fees, costs, and such other relief as the court should deem just and proper. On November 29, 2010, the federal court entered an order consolidating the two federal actions and appointing the firms of Robbins Umeda LLP and Shuman Law Firm as co-lead plaintiffs’ counsel. No scheduling order has been entered.

The Company and the other defendants intend to vigorously defend the pending lawsuits. Additional lawsuits may be filed and, at this time, the Company is unable to predict the outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations.

23. Earnings Per Share

The following table sets forth the computation of basic and diluted income per share (dollars in thousands, except share and per share data):

	Fifty-two weeks ended
	September 25, 2010		September 26, 2009 (As Restated)		September 27, 2008 (As Restated)
Numerator for basic and diluted earnings per share:
Net income	$	79,506	$	54,439	$	21,669
Denominator:
Basic weighted average shares outstanding		131,529,412		113,979,588		107,774,091
Effect of dilutive securities—stock options		6,304,711		6,391,071		7,267,419
Diluted weighted average shares outstanding		137,834,123		120,370,659		115,041,510
Basic net income per share	$	0.60	$	0.48	$	0.20
Diluted net income per share	$	0.58	$	0.45	$	0.19

For the fiscal years ended September 25, 2010, September 26, 2009, and September 27, 2008; 318,000, 648,000, and 1,053,000 options for shares of common stock, respectively, have been excluded in the calculation of diluted earnings per share because they were antidilutive.

F-49

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

24. Unaudited Quarterly Financial Data

The information for the first three quarters of fiscal 2010 and for all fiscal 2009 quarters have been restated to correct the errors described in Note 3, Restatement of Previously Issued Financial Statements.

The following table presents the quarterly information for fiscal 2010 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks.

Fiscal 2010	December 26, 2009 (As Restated)		March 27, 2010 (As  Restated)		June 26, 2010 (As  Restated)		September 25, 2010
Net sales	$	345,152	$	321,953	$	316,583	$	373,087
Gross profit	$	95,577	$	107,850	$	108,885	$	113,446
Net income	$	10,060	$	24,055	$	18,400	$	26,991
Earnings per share:
Basic	$	0.08	$	0.18	$	0.14	$	0.20
Diluted	$	0.07	$	0.17	$	0.13	$	0.20

The following table presents the quarterly information for fiscal 2009 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks.

Fiscal 2009	December 27, 2008 (As Restated)		March 28, 2009 (As  Restated)		June 27, 2009 (As  Restated)		September 26, 2009 (As Restated)
Net sales	$	192,027	$	189,931	$	188,212	$	215,965
Gross profit	$	52,670	$	59,845	$	64,008	$	68,868
Net income	$	14,208	$	12,061	$	14,118	$	14,052
Earnings per share:
Basic	$	0.13	$	0.11	$	0.13	$	0.12
Diluted	$	0.12	$	0.10	$	0.12	$	0.11

F-50

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The restated quarterly Balance Sheets for the first three quarters of fiscal 2010 and fiscal 2009 are presented below (dollars in thousands):

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

June 26, 2010

(Dollars in thousands)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Assets
Current assets:
Cash and cash equivalents	$	8,981		$	—		$	—		$	—		$	—		$	8,981
Restricted cash and cash equivalents		940			—			—			—			—			940
Short-term investments		—			—			—			—			—			—
Receivables, less uncollectible accounts and return allowances of $8,852		128,758			—			—			—			—			128,758
Inventories		186,262			(8,039	)		(1,043	)		—			—			177,180
Income taxes receivable		1,700			3,152			380			310			45			5,587
Other current assets		16,611			—			—			—			1,082			17,693
Deferred income taxes, net		12,819			—			—			—			—			12,819
Total current assets		356,071			(4,887	)		(663	)		310			1,127			351,958
Fixed assets, net		218,821			—			—			—			—			218,821
Intangibles, net		225,481			—			—			—			—			225,481
Goodwill		386,416			—			—			—			—			386,416
Other long-term assets		10,230			—			—			—			—			10,230
Total assets	$	1,197,019		$	(4,887	)	$	(663	)	$	310		$	1,127		$	1,192,906
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	19,058		$	—		$	—		$	—					$	19,058
Accounts payable		112,044			—			—			—						112,044
Accrued compensation costs		22,215			—			—			—			—			22,215
Accrued expenses		36,049			—			—			738			1,207			37,994
Income tax payable		—			—			—			—			—			—
Other short-term liabilities		2,514			—			—			—			—			2,514
Total current liabilities		191,880			—			—			738			1,207			193,825
Long-term debt		252,380			—			—			—			—			252,380
Deferred income taxes, net		85,469			—			—			—			—			85,469
Other long-term liabilities		5,157			—			—			—			—			5,157
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—131,783,168 shares		13,178			—			—			—			—			13,178
Additional paid-in capital		457,617			—			—			—			—			457,617
Retained earnings		192,912			(4,887	)		(663	)		(428	)		(80	)		186,854
Accumulated other comprehensive loss		(1,500	)		—			—			—			—			(1,500	)
ESOP unallocated shares, at cost—38,060 shares		(74	)		—			—			—			—			(74	)
Total stockholders’ equity		662,133			(4,887	)		(663	)		(428	)		(80	)		656,075
Total liabilities and stockholders’ equity	$	1,197,019		$	(4,887	)	$	(663	)	$	310		$	1,127		$	1,192,906

F-51

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

March 27, 2010

(Dollars in thousands)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Assets
Current assets:
Cash and cash equivalents	$	144,135		$	—		$	—		$	—		$	—		$	144,135
Restricted cash and cash equivalents		70			—			—			—			—			70
Short-term investments		—			—			—			—			—			—
Receivables, less uncollectible accounts and return allowances of $8,468		128,198			—			—			—			—			128,198
Inventories		109,929			(6,870	)		(1,982	)		—			—			101,077
Income taxes receivable		6,243			2,687			754			218			126			10,028
Other current assets		23,779			—			—			—			4,035			27,814
Deferred income taxes, net		11,932			—			—			—			—			11,932
Total current assets		424,286			(4,183	)		(1,228	)		218			4,161			423,254
Fixed assets, net		180,043			—			—			—			—			180,043
Intangibles, net		129,575			—			—			—			—			129,575
Goodwill		168,897			—			—			—			—			168,897
Other long-term assets		8,999			—			—			—			—			8,999
Total assets	$	911,800		$	(4,183	)	$	(1,228	)	$	218		$	4,161		$	910,768
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	5,062		$	—		$	—		$	—		$	—		$	5,062
Accounts payable		89,532			—			—			—			—			89,532
Accrued compensation costs		16,245			—			—			—			—			16,245
Accrued expenses		32,568			—			—			508			4,364			37,440
Income tax payable		—			—			—			—			—			—
Other short-term liabilities		2,525			—			—			—			—			2,525
Total current liabilities		145,932			—			—			508			4,364			150,804
Long-term debt		67,642			—			—			—			—			67,642
Deferred income taxes, net		53,376			—			—			—			—			53,376
Other long-term liabilities		5,123			—			—			—			—			5,123
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—131,538,000 shares		13,154			—			—			—			—			13,154
Additional paid-in capital		453,795			—			—			—			—			453,795
Retained earnings		174,358			(4,183	)		(1,228	)		(290	)		(203	)		168,454
Accumulated other comprehensive loss		(1,506	)		—			—			—			—			(1,506	)
ESOP unallocated shares, at cost—38,060 shares		(74	)		—			—			—			—			(74	)
Total stockholders’ equity		639,727			(4,183	)		(1,228	)		(290	)		(203	)		633,823
Total liabilities and stockholders’ equity	$	911,800		$	(4,183	)	$	(1,228	)	$	218		$	4,161		$	910,768

F-52

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

December 26, 2009

(Dollars in thousands)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Assets
Current assets:
Cash and cash equivalents	$	73,192		$	—		$	—		$	—		$	—		$	73,192
Restricted cash and cash equivalents		400			—			—			—			—			400
Short-term investments		50,000			—			—			—			—			50,000
Receivables, less uncollectible accounts and return allowances of $9,740		140,899			—			—			—			—			140,899
Inventories		124,083			(4,582	)		(2,292	)		—			—			117,209
Income taxes receivable		5,055			—			—			—			—			5,055
Other current assets		16,663			—			—			—			1,255			17,918
Deferred income taxes, net		9,983			—			—			—			—			9,983
Total current assets		420,275			(4,582	)		(2,292	)		—			1,255			414,656
Fixed assets, net		157,318			—			—			—			—			157,318
Intangibles, net		132,636			—			—			—			—			132,636
Goodwill		169,431			—			—			—			—			169,431
Other long-term assets		3,833			—			—			—			—			3,833
Total assets	$	883,493		$	(4,582	)	$	(2,292	)	$	—		$	1,255		$	877,874
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	5,064		$	—		$	—		$	—		$	—		$	5,064
Accounts payable		84,316			—			—			—			—			84,316
Accrued compensation costs		12,473			—			—			—			—			12,473
Accrued expenses		34,106			—			—			1,707			1,289			37,102
Income tax payable		13,137			(1,777	)		(876	)		(695	)		(9	)		9,780
Other short-term liabilities		2,844			—			—			—			—			2,844
Total current liabilities		151,940			(1,777	)		(876	)		1,012			1,280			151,579
Long-term debt		71,907			—			—			—			—			71,907
Deferred income taxes, net		53,192			—			—			—			—			53,192
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—131,038,995 shares		13,104			—			—			—			—			13,104
Additional paid-in capital		445,342			—			—			—			—			445,342
Retained earnings		149,656			(2,805	)		(1,416	)		(1,012	)		(25	)		144,398
Accumulated other comprehensive loss		(1,574	)		—			—			—			—			(1,574	)
ESOP unallocated shares, at cost—38,060 shares		(74	)		—			—			—			—			(74	)
Total stockholders’ equity		606,454			(2,805	)		(1,416	)		(1,012	)		(25	)		601,196
Total liabilities and stockholders’ equity	$	883,493		$	(4,582	)	$	(2,292	)	$	—		$	1,255		$	877,874

F-53

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

June 27, 2009

(Dollars in thousands)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Assets
Current assets:
Cash and cash equivalents	$	4,100		$	—		$	—		$	—		$	—		$	4,100
Restricted cash and cash equivalents		161			—			—			—			—			161
Receivables, less uncollectible accounts and return allowances of $4,288		68,458			—			—			—			—			68,458
Inventories		103,238			(2,411	)		(1,626	)		—			—			99,201
Income taxes receivable		285			922			622			(17	)		23			1,835
Other current assets		4,725			—			—			—			146			4,871
Deferred income taxes, net		9,967			—			—			—			—			9,967
Total current assets		190,934			(1,489	)		(1,004	)		(17	)		169			188,593
Fixed assets, net		117,054			—			—			—			—			117,054
Intangibles, net		37,935			—			—			—			—			37,935
Goodwill		99,558			—			—			—			—			99,558
Other long-term assets		4,114			—			—			—			—			4,114
Total assets	$	449,595		$	(1,489	)	$	(1,004	)	$	(17	)	$	169		$	447,254
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	37		$	—		$	—		$	—		$	—		$	37
Accounts payable		61,491			—			—			—			—			61,491
Accrued compensation costs		15,687			—			—			—			—			15,687
Accrued expenses		20,654			—			—			(46	)		205			20,813
Income tax payable		—			—			—			—			—			—
Other short-term liabilities		3,441			—			—			—			—			3,441
Total current liabilities		101,310			—			—			(46	)		205			101,469
Long-term debt		126,018			—			—			—			—			126,018
Deferred income taxes, net		22,696			—			—			—			—			22,696
Other long-term liabilities		—			—			—			—			—			—
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—128,714,481 shares		12,871			—			—			—			—			12,871
Additional paid-in capital		73,488			—			—			—			—			73,488
Retained earnings		122,787			(1,489	)		(1,004	)		29			(36	)		120,287
Accumulated other comprehensive loss		(2,078	)		—			—			—			—			(2,078	)
ESOP unallocated shares, at cost—81,581 shares		(161	)		—			—			—			—			(161	)
Treasury shares, at cost—15,626,979 shares		(7,336	)		—			—			—			—			(7,336	)
Total stockholders’ equity		199,571			(1,489	)		(1,004	)		29			(36	)		197,071
Total liabilities and stockholders’ equity	$	449,595		$	(1,489	)	$	(1,004	)	$	(17	)	$	169		$	447,254

F-54

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

March 28, 2009

(Dollars in thousands)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Assets
Current assets:
Cash and cash equivalents	$	2,639		$	—		$	—		$	—		$	—		$	2,639
Restricted cash and cash equivalents		414			—			—			—			—			414
Receivables, less uncollectible accounts and return allowances of $5,116		71,135			—			—			—			—			71,135
Inventories		71,597			(2,348	)		(1,973	)		—			—			67,276
Income taxes receivable		—			—			—			—			—			—
Other current assets		4,783			—			—			—			643			5,426
Deferred income taxes, net		9,899			—			—			—			—			9,899
Total current assets		160,467			(2,348	)		(1,973	)		—			643			156,789
Fixed assets, net		105,152			—			—			—			—			105,152
Intangibles, net		39,390			—			—			—			—			39,390
Goodwill		99,727			—			—			—			—			99,727
Other long-term assets		4,172			—			—			—			—			4,172
Total assets	$	408,908		$	(2,348	)	$	(1,973	)	$	—		$	643		$	405,230
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	93		$	—		$	—		$	—		$	—		$	93
Accounts payable		49,542			—			—			—			—			49,542
Accrued compensation costs		10,658			—			—			—			—			10,658
Accrued expenses		20,614			—			—			(324	)		659			20,949
Income tax payable		5,427			(897	)		(752	)		122			(7	)		3,893
Other short-term liabilities		4,147			—			—			—			—			4,147
Total current liabilities		90,481			(897	)		(752	)		(202	)		652			89,282
Long-term debt		118,650			—			—			—			—			118,650
Deferred income taxes, net		22,292			—			—			—			—			22,292
Other long-term liabilities		—			—			—			—			—			—
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—			—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—117,435,996 shares		11,744			—			—			—			—			11,744
Additional paid-in capital		67,203			—			—			—			—			67,203
Retained earnings		108,647			(1,451	)		(1,221	)		202			(9	)		106,168
Accumulated other comprehensive loss		(2,612	)		—			—			—			—			(2,612	)
ESOP unallocated shares, at cost—81,581 shares		(161	)		—			—			—			—			(161	)
Treasury shares, at cost—15,626,979 shares		(7,336	)		—			—			—			—			(7,336	)
Total stockholders’ equity		177,485			(1,451	)		(1,221	)		202			(9	)		175,006
Total liabilities and stockholders’ equity	$	408,908		$	(2,348	)	$	(1,973	)	$	—		$	643		$	405,230

F-55

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Balance Sheet

December 27, 2008

(Dollars in thousands)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments		As Restated
Assets
Current assets:
Cash and cash equivalents	$	2,475		$	—		$	—		$	—		$	—	$	2,475
Restricted cash and cash equivalents		575			—			—			—			—		575
Receivables, less uncollectible accounts and return allowances of $5,357		70,328			—			—			—			—		70,328
Inventories		66,839			(1,497	)		(1,138	)		—			—		64,204
Income taxes receivable		—			—			—			—			—		—
Other current assets		5,632			—			—			—			1,275		6,907
Deferred income taxes, net		10,043			—			—			—			—		10,043
Total current assets		155,892			(1,497	)		(1,138	)		—			1,275		154,532
Fixed assets, net		98,818			—			—			—			—		98,818
Intangibles, net		28,193			—			—			—			—		28,193
Goodwill		73,953			—			—			—			—		73,953
Other long-term assets		4,913			—			—			—			—		4,913
Total assets	$	361,769		$	(1,497	)	$	(1,138	)	$	—		$	1,275	$	360,409
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	29		$	—		$	—		$	—		$	—	$	29
Accounts payable		50,477			—			—			—			—		50,477
Accrued compensation costs		8,218			—			—			—			—		8,218
Accrued expenses		20,484			—			—			(107	)		1,275		21,652
Income tax payable		8,748			(574	)		(435	)		40			—		7,779
Other short-term liabilities		4,609			—			—			—			—		4,609
Total current liabilities		92,565			(574	)		(435	)		(67	)		1,275		92,764
Long-term debt		90,013			—			—			—			—		90,013
Deferred income taxes, net		21,485			—			—			—			—		21,485
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized—1,000,000 shares; No shares issued or outstanding		—			—			—			—			—		—
Common stock, $0.10 par value: Authorized—200,000,000 shares; Issued—116,167,703 shares		11,617			—			—			—			—		11,617
Additional paid-in capital		60,740			—			—			—			—		60,740
Retained earnings		95,664			(923	)		(703	)		67			—		94,105
Accumulated other comprehensive loss		(2,818	)		—			—			—			—		(2,818	)
ESOP unallocated shares, at cost—81,581 shares		(161	)		—			—			—			—		(161	)
Treasury shares, at cost—15,626,979 shares		(7,336	)		—			—			—			—		(7,336	)
Total stockholders’ equity		157,706			(923	)		(703	)		67			—		156,147
Total liabilities and stockholders’ equity	$	361,769		$	(1,497	)	$	(1,138	)	$	—		$	1,275	$	360,409

F-56

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The restated quarterly Statements of Operations for the first three quarters of fiscal 2010 and each of the quarterly periods in fiscal 2009 are presented below (dollars in thousands, except per share data):

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended June 26, 2010

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	311,514		$	5,488		$	(2,756	)	$	(820	)	$	3,157		$	316,583
Cost of sales		201,783			6,657			(3,695	)		—			2,953			207,698
Gross profit		109,731			(1,169	)		939			(820	)		204			108,885
Selling and operating expenses		46,277			—			—			(590	)		—			45,687
General and administrative expenses		25,267			—			—			—			—			25,267
Patent litigation (settlement) expense		—			—			—			—			—			—
Operating income		38,187			(1,169	)		939			(230	)		204			37,931
Other income (expense)		27			—			—			—			—			27
Interest expense		(1,495	)		—			—			—			—			(1,495	)
Income before income taxes		36,719			(1,169	)		939			(230	)		204			36,463
Income tax expense		(18,165	)		465			(374	)		92			(81	)		(18,063	)
Net income	$	18,554		$	(704	)	$	565		$	(138	)	$	123		$	18,400
Basic income per share:
Weighted average shares outstanding		131,677,459			131,677,459			131,677,459			131,677,459			131,677,459			131,677,459
Net income	$	0.14		$	(0.01	)	$	0.00		$	(0.00	)	$	0.00		$	0.14	*
Diluted income per share:
Weighted average shares outstanding		137,898,253			137,898,253			137,898,253			137,898,253			137,898,253			137,898,253
Net income	$	0.13		$	(0.01	)	$	0.00		$	(0.00	)	$	0.00		$	0.13	*

* Does not add due to rounding.

F-57

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended March 27, 2010

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments
Net sales	$	324,915		$	2,941		$	(4,300	)	$	1,472		$	(3,075	)	$	321,953
Cost of sales		216,263			5,230			(4,611	)		—			(2,779	)		214,103
Gross profit		108,652			(2,289	)		311			1,472			(296	)		107,850
Selling and operating expenses		42,979			—			—			272			—			43,251
General and administrative expenses		24,464			—			—			—			—			24,464
Patent litigation (settlement) expense		—			—			—			—			—			—
Operating income		41,209			(2,289	)		311			1,200			(296	)		40,135
Other income (expense)		(133	)		—			—			—			—			(133	)
Interest expense		(833	)		—			—			—			—			(833	)
Income before income taxes		40,243			(2,289	)		311			1,200			(296	)		39,169
Income tax expense		(15,541	)		911			(124	)		(478	)		118			(15,114	)
Net income	$	24,702		$	(1,378	)	$	187		$	722		$	(178	)	$	24,055
Basic income per share:
Weighted average shares outstanding		131,263,638			131,263,638			131,263,638			131,263,638			131,263,638			131,263,638
Net income	$	0.19		$	(0.01	)	$	0.00		$	0.01		$	(0.00	)	$	0.18	*
Diluted income per share:
Weighted average shares outstanding		137,831,574			137,831,574			137,831,574			137,831,574			137,831,574			137,831,574
Net income	$	0.18		$	(0.01	)	$	0.00		$	0.01		$	(0.00	)	$	0.17	*

* Does not add due to rounding.

F-58

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended December 26, 2009

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	349,363		$	5,240		$	(5,576	)	$	(4,711	)	$	836		$	345,152
Cost of sales		247,538		$	6,884		$	(5,459	)	$	—			612			249,575
Gross profit		101,825			(1,644	)		(117	)		(4,711	)		224			95,577
Selling and operating expenses		55,579			—			—			(2,204	)		—			53,375
General and administrative expenses		23,172			—			—			—			—			23,172
Patent litigation (settlement) expense		—			—			—			—			—			—
Operating income		23,074			(1,644	)		(117	)		(2,507	)		224			19,030
Other income (expense)		(111	)		—			—			—			—			(111	)
Interest expense		(1,048	)		—			—			—			—			(1,048	)
Income before income taxes		21,915			(1,644	)		(117	)		(2,507	)		224			17,871
Income tax expense		(9,421	)		654			47			998			(89	)		(7,811	)
Net income	$	12,494		$	(990	)	$	(70	)	$	(1,509	)	$	135		$	10,060
Basic income per share:
Weighted average shares outstanding		130,969,293			130,969,293			130,969,293			130,969,293			130,969,293			130,969,293
Net income	$	0.10		$	(0.01	)	$	(0.00	)	$	(0.01	)	$	0.00		$	0.08
Diluted income per share:
Weighted average shares outstanding		137,486,331			137,486,331			137,486,331			137,486,331			137,486,331			137,486,331
Net income	$	0.09		$	(0.01	)	$	(0.00	)	$	(0.01	)	$	0.00		$	0.07

F-59

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended September 26, 2009

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	222,205		$	(12	)	$	(4,098	)	$	(210	)	$	(1,920	)	$	215,965
Cost of sales		151,853			514			(3,549	)		—			(1,721	)		147,097
Gross profit		70,352			(526	)		(549	)		(210	)		(199	)		68,868
Selling and operating expenses		31,076			—			—			(964	)		—			30,112
General and administrative expenses		13,939			—			—			—			—			13,939
Patent litigation (settlement) expense		—			—			—			—			—			—
Operating income		25,337			(526	)		(549	)		754			(199	)		24,817
Other income (expense)		(338	)		—			—			—			—			(338	)
Interest expense		(1,199	)		—			—			—			—			(1,199	)
Income before income taxes		23,800			(526	)		(549	)		754			(199	)		23,280
Income tax expense		(9,425	)		200			208			(286	)		75			(9,228	)
Net income	$	14,375		$	(326	)	$	(341	)	$	468		$	(124	)	$	14,052
Basic income per share:
Weighted average shares outstanding		121,743,135			121,743,135			121,743,135			121,743,135			121,743,135			121,743,135
Net income	$	0.12		$	(0.00	)	$	(0.00	)	$	0.00		$	(0.00	)	$	0.12
Diluted income per share:
Weighted average shares outstanding		128,401,764			128,401,764			128,401,764			128,401,764			128,401,764			128,401,764
Net income	$	0.11		$	(0.00	)	$	(0.00	)	$	0.00		$	(0.00	)	$	0.11

F-60

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended June 27, 2009

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	190,509		$	695		$	(3,131	)	$	(315	)	$	454		$	188,212
Cost of sales		126,428			757			(3,478	)		—			497			124,204
Gross profit		64,081			(62	)		347			(315	)		(43	)		64,008
Selling and operating expenses		28,597			—			—			(37	)					28,560
General and administrative expenses		12,708			—			—			—			—			12,708
Patent litigation (settlement) expense		—			—			—			—			—			—
Operating income		22,776			(62	)		347			(278	)		(43	)		22,740
Other income (expense)		(39	)		—			—			—			—			(39	)
Interest expense		(1,080	)		—			—			—			—			(1,080	)
Income before income taxes		21,657			(62	)		347			(278	)		(43	)		21,621
Income tax expense		(7,517	)		24			(131	)		105			16			(7,503	)
Net income	$	14,140		$	(38	)	$	216		$	(173	)	$	(27	)	$	14,118
Basic income per share:
Weighted average shares outstanding		112,775,280			112,775,280			112,775,280			112,775,280			112,775,280			112,775,280
Net income	$	0.13		$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)	$	0.13
Diluted income per share:
Weighted average shares outstanding		119,010,138			119,010,138			119,010,138			119,010,138			119,010,138			119,010,138
Net income	$	0.12		$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)	$	0.12

F-61

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended March 28, 2009

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	193,351		$	547		$	(4,149	)	$	(433	)	$	615		$	189,931
Cost of sales		131,370			1,399			(3,315	)		—			632			130,086
Gross profit		61,981			(852	)		(834	)		(433	)		(17	)		59,845
Selling and operating expenses		28,094			—			—			(650	)					27,444
General and administrative expenses		11,245			—			—			—			—			11,245
Patent litigation (settlement) expense		—			—			—			—			—			—
Operating income		22,642			(852	)		(834	)		217			(17	)		21,156
Other income (expense)		(242	)		—			—			—			—			(242	)
Interest expense		(1,032	)		—			—			—			—			(1,032	)
Income before income taxes		21,368			(852	)		(834	)		217			(17	)		19,882
Income tax expense		(8,385	)		323			316			(82	)		7			(7,821	)
Net income	$	12,983		$	(529	)	$	(518	)	$	135		$	(10	)	$	12,061
Basic income per share:
Weighted average shares outstanding		111,375,114			111,375,114			111,375,114			111,375,114			111,375,114			111,375,114
Net income	$	0.12		$	(0.00	)	$	(0.00	)	$	0.00		$	(0.00	)	$	0.11	*
Diluted income per share:
Weighted average shares outstanding		117,060,174			117,060,174			117,060,174			117,060,174			117,060,174			117,060,174
Net income	$	0.11		$	(0.00	)	$	(0.00	)	$	0.00		$	(0.00	)	$	0.10	*

* Does not add due to rounding.

F-62

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Green Mountain Coffee Roasters, Inc.

Consolidated Statement of Operations

Thirteen weeks ended December 27, 2008

(Dollars in thousands, except per share data)

	As Previously Reported on Form 10-Q			Inter-Company Elimination Adjustments			Third Party Royalty Adjustments			Marketing and Customer Incentive Expense Adjustments			Other Adjustments			As Restated
Net sales	$	196,980		$	133		$	(2,810	)	$	(1,019	)	$	(1,257	)	$	192,027
Cost of sales		143,630			(364	)		(2,648	)		—			(1,261	)		139,357
Gross profit		53,350			497			(162	)		(1,019	)		4			52,670
Selling and operating expenses		36,181			—			—			(947	)		—			35,234
General and administrative expenses		9,211			—			—			—			552			9,763
Patent litigation (settlement) expense		(17,000	)		—			—			—			—			(17,000	)
Operating income		24,958			497			(162	)		(72	)		(548	)		24,673
Other income (expense)		(43	)		—			—			—			—			(43	)
Interest expense		(1,382	)		—			—			—			—			(1,382	)
Income before income taxes		23,533			497			(162	)		(72	)		(548	)		23,248
Income tax expense		(9,149	)		(188	)		62			27			208			(9,040	)
Net income	$	14,384		$	309		$	(100	)	$	(45	)	$	(340	)	$	14,208
Basic income per share:
Weighted average shares outstanding		110,038,074			110,038,074			110,038,074			110,038,074			110,038,074			110,038,074
Net income	$	0.13		$	0.00		$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.13
Diluted income per share:
Weighted average shares outstanding		115,884,465			115,884,465			115,884,465			115,884,465			115,884,465			115,884,465
Net income	$	0.12		$	0.00		$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.12

F-63

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

The restated quarterly segment information for the first three quarters of fiscal 2010 and each of the quarterly periods in fiscal 2009 are presented below (dollars in thousands, except per share data):

Thirteen weeks ended June 26, 2010

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	157,169	$	159,414	$	—		$	—		$	316,583
Intersegment sales	$	68,475	$	39,955	$	—		$	(108,430	)	$	—
Net sales	$	225,644	$	199,369	$	—		$	(108,430	)	$	316,583
Income before taxes	$	27,691	$	23,720	$	(10,328	)	$	(4,620	)	$	36,463
Total assets	$	876,522	$	353,966	$	39,002		$	(76,585	)	$	1,192,905
Stock compensation	$	645	$	565	$	883		$	—		$	2,093
Interest expense	$	—	$	—	$	1,495		$	—		$	1,495
Property additions	$	30,606	$	4,284	$	—		$	—		$	34,890
Depreciation and amortization	$	9,984	$	2,021	$	—		$	—		$	12,005

Thirteen weeks ended March 27, 2010

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	155,162	$	166,791	$	—		$	—		$	321,953
Intersegment sales	$	67,367	$	38,625	$	—		$	(105,992	)	$	—
Net sales	$	222,529	$	205,416	$	—		$	(105,992	)	$	321,953
Income before taxes	$	31,503	$	21,095	$	(10,894	)	$	(2,535	)	$	39,169
Total assets	$	506,272	$	300,388	$	176,840		$	(72,732	)	$	910,768
Stock compensation	$	637	$	491	$	792		$	—		$	1,920
Interest expense	$	—	$	—	$	833		$	—		$	833
Property additions	$	24,427	$	5,567	$	—		$	—		$	29,994
Depreciation and amortization	$	8,062	$	1,814	$	—		$	—		$	9,876

Thirteen weeks ended December 26, 2009

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	133,186	$	211,966	$	—		$	—		$	345,152
Intersegment sales	$	58,619	$	34,140	$	—		$	(92,759	)	$	—
Net sales	$	191,805	$	246,106	$	—		$	(92,759	)	$	345,152
Income before taxes	$	27,578	$	5,954	$	(11,080	)	$	(4,581	)	$	17,871
Total assets	$	476,166	$	289,715	$	149,305		$	(37,312	)	$	877,874
Stock compensation	$	684	$	507	$	737		$	—		$	1,928
Interest expense	$	—	$	—	$	1,048		$	—		$	1,048
Property additions	$	17,220	$	2,322	$	—		$	—		$	19,542
Depreciation and amortization	$	6,345	$	1,651	$	—		$	—		$	7,996

F-64

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Thirteen weeks ended September 26, 2009

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	100,119	$	115,846	$	—		$	—		$	215,965
Intersegment sales	$	34,572	$	22,007	$	—		$	(56,579	)	$	—
Net sales	$	134,691	$	137,853	$	—		$	(56,579	)	$	215,965
Income before taxes	$	15,104	$	15,716	$	(5,881	)	$	(1,659	)	$	23,280
Total assets	$	510,725	$	259,706	$	262,917		$	(219,943	)	$	813,405
Stock compensation	$	640	$	554	$	691		$	—		$	1,885
Interest expense	$	—	$	—	$	1,199		$	—		$	1,199
Property additions	$	51,852	$	3,752	$	—		$	—		$	55,604
Depreciation and amortization	$	4,728	$	1,662	$	—		$	—		$	6,390

Thirteen weeks ended June 27, 2009

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	100,749	$	87,463	$	—		$	—		$	188,212
Intersegment sales	$	20,258	$	17,298	$	—		$	(37,556	)	$	—
Net sales	$	121,007	$	104,761	$	—		$	(37,556	)	$	188,212
Income before taxes	$	16,030	$	11,119	$	(5,446	)	$	(82	)	$	21,621
Total assets	$	387,090	$	211,077	$	26,738		$	(177,651	)	$	447,254
Stock compensation	$	654	$	514	$	688		$	—		$	1,856
Interest expense	$	—	$	—	$	1,080		$	—		$	1,080
Property additions	$	14,937	$	1,625	$	—		$	—		$	16,562
Depreciation and amortization	$	4,311	$	1,721	$	—		$	—		$	6,032

Thirteen weeks ended March 28, 2009

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate			Eliminations			Consolidated
Sales to unaffiliated customers	$	91,290	$	98,641	$	—		$	—		$	189,931
Intersegment sales	$	21,975	$	17,156	$	—		$	(39,131	)	$	—
Net sales	$	113,265	$	115,797	$	—		$	(39,131	)	$	189,931
Income before taxes	$	12,835	$	12,888	$	(4,753	)	$	(1,088	)	$	19,882
Total assets	$	343,945	$	189,465	$	23,626		$	(151,806	)	$	405,230
Stock compensation	$	498	$	458	$	570		$	—		$	1,526
Interest expense	$	—	$	—	$	1,032		$	—		$	1,032
Property additions	$	10,592	$	258	$	—		$	—		$	10,850
Depreciation and amortization	$	3,801	$	1,721	$	—		$	—		$	5,522

F-65

Green Mountain Coffee Roasters, Inc.

Notes to Consolidated Financial Statements—(Continued)

Thirteen weeks ended December 27, 2008

As Restated

(Dollars in thousands)

	SCBU		Keurig		Corporate		Eliminations			Consolidated
Sales to unaffiliated customers	$	91,702	$	100,325			$	—		$	192,027
Intersegment sales	$	14,106	$	15,525			$	(29,631	)	$	—
Net sales	$	105,808	$	115,850	$	—	$	(29,631	)	$	192,027
Income before taxes	$	9,530	$	719	$	13,310	$	(311	)	$	23,248
Total assets	$	272,408	$	187,788	$	23,768	$	(123,555	)	$	360,409
Stock compensation	$	533	$	425	$	472	$	—		$	1,430
Interest expense	$	—	$	—	$	1,382	$	—		$	1,382
Property additions	$	4,593	$	745	$	—	$	—		$	5,338
Depreciation and amortization	$	3,668	$	1,693	$	—	$	—		$	5,361

25. Subsequent Events

On September 28, 2010, the Company completed a sale of 8,566,649 shares of its common stock, par value $0.10 per share, to Luigi Lavazza S.p.A., an Italian corporation (“Lavazza”), for an aggregate purchase price of $250.0 million. The sale of the shares was effected pursuant to a Common Stock Purchase Agreement (“SPA”) dated August 10, 2010. The SPA contains a five-and-one-half-year standstill period, during which Lavazza will be prohibited from increasing its ownership of Common Stock or making any proposals or announcements relating to extraordinary Company transactions. The standstill is subject to certain exceptions after a one-year period, including Lavazza’s right to purchase additional shares up to 15% of the Company’s outstanding shares.

On September 14, 2010, the Company agreed to purchase all of the issued and outstanding shares of capital stock of LJVH Holdings Inc., a British Columbia, Canada corporation (“Van Houtte”), for an aggregate cash purchase price of $915.0 million Canadian dollars, pursuant to a definitive Share Purchase Agreement (“Purchase Agreement”). The purchase price is subject to adjustment based on Van Houtte’s working capital, net indebtedness and pre-closing taxes as of immediately prior to the transaction’s closing. The Purchase Agreement contains customary representations, warranties, covenants and closing conditions, including obtaining regulatory approvals in the United States and Canada. The Purchase Agreement also contains indemnification obligations of the Company and the sellers, subject to certain limitations. In addition, the Company is subject to a reverse break-up fee of $91.5 million Canadian dollars if the Company breaches their obligation to close the transaction. The Purchase Agreement may be terminated by either the Company or the sellers under certain circumstances, including if the closing does not occur by December 31, 2010. However, if the closing does not occur on or prior to December 31, 2010 as a result of regulatory approvals having not been obtained by that date, the termination date will be extended to March 31, 2011. The Company has received two of the three required regulatory approvals necessary to complete this transaction. The Company is confident that it will receive the final required regulatory approval so that it can close the transaction by December 31, 2010. To finance the Van Houtte acquisition and transaction expenses, as well as to refinance the Company’s existing outstanding indebtedness, the Company intends to enter into a new credit facility.

F-66

Schedule II—Valuation and Qualifying Accounts

for the fiscal years ended

September 25, 2010, September 26, 2009, and September 27, 2008

(Dollars in thousands)

Description	Balance at Beginning of Period		Acquisitions		Charged to Costs and Expenses		Deductions		Balance at End of Period
Allowance for doubtful accounts:
Fiscal 2010	$	983	$	333	$	610	$	612	$	1,314
Fiscal 2009	$	1,034	$	—	$	243	$	294	$	983
Fiscal 2008	$	862	$	—	$	1,158	$	986	$	1,034
Description	Balance at Beginning of Period		Acquisitions		Charged to Costs and Expenses		Deductions		Balance at End of Period
Sales returns reserve:
Fiscal 2010	$	3,809	$	31	$	40,139	$	31,237	$	12,742
Fiscal 2009	$	1,968	$	—	$	15,944	$	14,103	$	3,809
Fiscal 2008	$	738	$	—	$	8,251	$	7,021	$	1,968
Description	Balance at Beginning of Period		Acquisitions		Charged to Costs and Expenses		Deductions		Balance at End of Period
Warranty reserve:
Fiscal 2010	$	724	$	—	$	14,780	$	8,810	$	6,694
Fiscal 2009	$	648	$	—	$	3,082	$	3,006	$	724
Fiscal 2008	$	815	$	—	$	2,322	$	2,489	$	648
Description	Balance at Beginning of Period		Acquisitions		Charged to Costs and Expenses		Deductions		Balance at End of Period
Inventory obsolescence reserve:
Fiscal 2010	$	704	$	213	$	4,668	$	2,664	$	2,921
Fiscal 2009	$	440	$	—	$	1,801	$	1,537	$	704
Fiscal 2008	$	348	$	—	$	1,141	$	1,049	$	440

F-67

EX-4.1.3

Exhibit 4.1.3

EXECUTION

AMENDMENT NO. 3 TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

This AMENDMENT NO. 3 TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “Amendment No. 3”) is made and entered into as of the 11^th day of May, 2010, by and among GREEN MOUNTAIN COFFEE ROASTERS, INC., a Delaware corporation (the “Borrower”), the Subsidiaries of Borrower as Guarantors, the lenders party hereto (collectively, the “Lenders” and, individually, a “Lender”), BANK OF AMERICA, N.A. as Administrative Agent (the “Agent”), L/C Issuer and Swing Line Lender, and BANC OF AMERICA SECURITIES LLC as sole lead Arranger (the “Arranger”) and sole Book Manager. Capitalized terms used herein without definition shall have the meaning assigned to such terms in the Credit Agreement (as defined below).

WHEREAS, Borrower, Agent and Lenders named therein are parties to that certain Amended and Restated Revolving Credit Agreement, dated as of December 3, 2007, as amended by that certain Amendment No. 1 to Amended and Restated Revolving Credit Agreement, dated as of July 18, 2008, and as further amended by that certain Agreement to Exercise Facility Increase Option and Amendment No. 2 to Amended and Restated Revolving Credit Agreement (as the same may be further amended and in effect from time to time, the “Credit Agreement”), which provides for a senior secured revolving credit facility of $225,000,000 (as the same may be amended or revised from time to time, the “Revolving Credit Facility”), and a senior secured Term Loan A facility in the original principal amount of $50,000,000, which was as a result of the exercise in full of the previously existing increase option (as the same may be amended from time to time, the “Term Loan Facility,” and together with the Revolving Credit Facility, the “Existing Credit Facilities”);

WHEREAS, Borrower has requested a new term loan in an aggregate amount of $140,000,000 (“Term Loan A1”);

WHEREAS, Borrower, Agent and Lenders are amending the Credit Agreement to effect the new Term Loan A1, which amendments are set forth in Part I hereof;

WHEREAS, in addition to the amendments related to adding Term Loan A1 to the existing Term Loan Facility, Borrower, Agent and Lenders are further amending the Credit Agreement to, among other things, add a new increase option in an aggregate amount of up to $100,000,000, increase the general basket for Investments, increase the amount of permitted Indebtedness on account of capital leases and purchase money obligations, and increase the general basket for unsecured permitted Indebtedness, which amendments are set forth in Part II hereof;

WHEREAS, contemporaneously with the effectiveness of this Amendment No. 3, Borrower is consummating the “Closing” under, and as defined in, the Agreement and Plan of Merger (“Merger Agreement”), dated December 7, 2009, among Borrower, Pebbles Acquisition Sub, Inc. and Diedrich Coffee, Inc. (the “Diedrich Acquisition”); and

1

WHEREAS, in connection with the Diedrich Acquisition, Lenders are granting a waiver to extend the time period within which Diedrich Coffee, Inc. (“Diedrich”), as a new Subsidiary, will be required to become a Guarantor under the Credit Agreement from 30 days to 120 days, and certain other waivers that will facilitate the planned closing mechanics of the Diedrich Acquisition in accordance with the Merger Agreement, which waivers are set forth in Part III hereof.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

PART I

TERM LOAN A1

1.    Definitions. Capitalized terms used herein without definition shall have the meaning assigned to such terms in the Credit Agreement.

2.    Amendments to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended as follows:

a. by (i) deleting the definition of “Aggregate Commitments” in its entirety, and (ii) replacing it with the following:

““Aggregate Commitments” means the Commitments of all Lenders (including the Commitments to make the Term Loans), which amount, as of the effective date of Amendment No. 3 to Amended and Restated Revolving Credit Agreement, is $411,250,000, (A) less (i) any reductions pursuant to Section 2.06 of this Agreement, (ii) any prepayments or repayments of Term Loan A or Term Loan A1, and (iii) amortization of Term Loan A and Term Loan A1, (B) plus any increases pursuant to Section 2.14 of this Agreement, except that, all references to the “Aggregate Commitments” in Article II of this Agreement, other than Section 2.14 thereof, shall exclude Commitments attributable to the Term Loans.”

b. by (i) deleting the definition of “Committed Loan” in its entirety, and (ii) replacing it with the following:

“Committed Loan” means Revolving Loans and Term Loans, except that, references to “Committed Loans” in Sections 2.01, 2.03 through 2.04, 2.06 and 2.09 through 2.12 of the shall continue to refer only to Revolving Loans.

c. by (i) deleting the definition of “Loan Documents” in its entirety, and (ii) replacing it with the following:

2

““Loan Documents” means this Agreement (as amended from time to time), the Agreement to Exercise Facility Increase Option and Amendment No. 2 to Amended and Restated Revolving Credit Agreement (and any Note delivered pursuant thereto), Amendment No. 3 to Amended and Restated Revolving Credit Agreement (and any Note delivered pursuant thereto), each Note, each Issuer Document, the Fee Letter, each Collateral Document, the Guaranty and the Omnibus Amendment.”

d. by (i) deleting the definition of “Outstanding Amount” in its entirety, and (ii) replacing it with the following:

““Outstanding Amount” means, (i) with respect to Revolving Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowing and prepayments or repayments of Revolving Loans or Swing Line Loans, as the case may be, occurring on such date; (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by Borrower of Unreimbursed Amounts; (iii) with respect to Term Loan A on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowing and prepayments or repayments of Term Loan A occurring on or prior to such date; and (iv) with respect to Term Loan A1 on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowing and prepayments or repayments of Term Loan A occurring on or prior to such date.”

e. by inserting in the appropriate alphabetical order the following new definitions:

“Amendment No. 3 to Amended and Restated Revolving Credit Agreement” means that certain Amendment No. 3 to Amended and Restated Revolving Credit Agreement, dated as of the          day of May, 2010, by and among Borrower, the Subsidiaries of Borrower as Guarantors, the lenders party thereto, Bank of America, N.A. as Administrative Agent, L/C Issuer and Swing Line Lender, and Banc of America Securities LLC as sole lead Arranger and sole Book Manager.

“Revolving Loans” means Committed Loans that are revolving loans made pursuant to Section 2.01 of this Agreement.

“Revolving Loan Lenders” means those lenders of Revolving Loans hereunder as set forth on Schedule A hereof, each of which shall be “Lenders” under and for all purposes of this Agreement.

3

“Term A Lenders” means those lenders of Term Loan A hereunder as set forth on Schedule A hereof, each of which shall be “Lenders” under and for all purposes of this Agreement.

“Term A1 Lenders” means those lenders of Term Loan A1 hereunder as set forth on Schedule A hereof, each of which shall be “Lenders” under and for all purposes of this Agreement.

“Term Loan A” means those certain senior secured term loans made by the Term A Lenders to Borrower, pursuant to the Agreement to Exercise Facility Increase Option and Amendment No. 2 to Amended and Restated Revolving Credit Agreement, in the original aggregate principal amount of $50,000,000.

“Term Loan A1” means those certain senior secured term loans made by Term A1 Lenders to Borrower, pursuant to Amendment No. 3 to Amended and Restated Revolving Credit Agreement, in the original aggregate principal amount of $140,000,000.

“Term Loans” means Term Loan A, Term Loan A1, and any term loans, if any, that may be made from time to time pursuant to Section 2.14.

3.    Applicable Percentage. “Applicable Percentage” as used in Article II of the Credit Agreement (other than Section 2.12(a)(ii)), shall continue to apply only to Revolving Loans, Swing Line Loans and Letters of Credit; except that, (i) with respect to any prepayments of Term Loan A under Section 2.05 of the Credit Agreement, or any repayments of Term Loan A, the term “Applicable Percentage” shall mean the Term Loan A Percentage of Term A Lenders as set forth on Schedule A hereto, and (ii) with respect to any prepayments of Term Loan A1 under Section 2.05 of the Credit Agreement, or any repayments of Term Loan A1, the term “Applicable Percentage” shall mean the Term Loan A1 Percentage of Term A1 Lenders as set forth on Schedule A hereto.

4.    Term Loan A1.

4.1    Generally. Subject to the terms and conditions of this Amendment No. 3, each Term A1 Lender severally agrees to lend to Borrower, and Borrower hereby agrees to borrow and repay to each Term A1 Lender in accordance with this Amendment No. 3 and the Credit Agreement, a Term Loan A1 in an original principal amount equal to the amount set forth on Schedule A hereto opposite such Term A1 Lender’s name, the aggregate principal amount of which is $140,000,000. Schedule A hereto reflects Term Loan A1, each Term A1 Lender’s Applicable Percentage of Term Loan A1, and each Lender’s Applicable Percentage of the Aggregate Commitments upon the effectiveness of Term Loan A1. Subject to the terms hereof, Term Loan A1 shall be disbursed immediately following the consummation of the Diedrich Acquisition, but on or before June 15, 2010 (the “Closing Date”).

4

4.2    Repayment; Prepayments. Borrower promises to repay Term Loan A1 on the Maturity Date, and on the dates and in the amounts set forth below:

DATE	AMOUNT
6/30/2010	$    3,500,000
9/30/2010	$    3,500,000
12/31/2010	$    3,500,000
3/31/2011	$    3,500,000
6/30/2011	$    3,500,000
9/30/2011	$    3,500,000
12/31/2011	$    3,500,000
3/31/2012	$    3,500,000
6/30/2012	$    3,500,000
9/30/2012	$    3,500,000
12/3/2012	$105,000,000 or the unpaid balance, whichever is more.

Amounts repaid on Term Loan A1 may not be reborrowed.

Borrower may, subject to the terms and conditions of Section 2.05(a) of the Credit Agreement, prepay Term Loan A1 at any time in whole or in part without premium or penalty upon written notice thereof in accordance with Section 2.05(a) thereof; provided, however, that simultaneously with any such prepayments, Borrower must prepay a proportional amount of the Revolving Loans and Term Loan A under the Credit Agreement. Any such prepayments shall be applied to the remaining scheduled payments of principal thereof pro rata against all remaining installments, and the amount of each Lender’s Applicable Percentage of such prepayment shall be such Lender’s Applicable Percentage with respect to each Loan as set forth on Schedule A hereto. Notwithstanding the foregoing, payments and prepayments made during the continuance of an Event of Default shall be applied in the manner specified in Section 8.03 of the Credit Agreement.

4.3     Interest Rate.

(a)    Subject to Section 2.8(b) of the Credit Agreement, (i) each Term Loan A1 that is a Eurodollar Rate Loan shall bear interest at the Eurodollar Rate plus 2.50% per annum, and Term Loan A1 shall, so long as the interest rate is based on the Eurodollar Rate, be deemed for all purposes of the Credit Agreement (other than under Section 2.08(a)(i) thereof) a Eurodollar Rate Loan, and (ii) each Term Loan A1 that is a Base Rate Loan shall bear interest at the Base Rate plus 1.50% per annum, and Term Loan A1 shall, so long as the interest rate is based on the Base Rate, be deemed for all purposes of the Credit Agreement (other than under Section 2.08(a)(ii) thereof) a Base Rate Loan.

(b)    Interest on Term Loan A1 shall be due and payable at the times and in the manner specified in the Credit Agreement for all Loans.

5

4.4    Borrowing, Conversion and Continuation of Term Loan A1. Borrower shall specify in the Committed Loan Notice for Term Loan A1, attached hereto as Exhibit A, whether Term Loan A1 shall initially be a Base Rate Committed Loan or a Eurodollar Rate Loan, and if the latter, the duration of the Interest Period relating thereto. Thereafter, Borrower may convert and continue all or any portion of Term Loan A1 as a Committed Loan of one Type or the other, in accordance with the terms of Section 2.02 of the Credit Agreement.

4.5    Security Interest. Term Loan A1, as a Loan under the Credit Agreement, shall share ratably with all other Loans and other Obligations under the Credit Agreement in respect to all Collateral existing from time to time under the Existing Credit Facilities, any treasury management and foreign exchange arrangements and any interest rate swap or similar agreements with any Lender under the Existing Credit Facilities.

4.6    Notes. If any Term A1 Lender requests a Note pursuant to Section 2.11(a) of the Credit Agreement to evidence such Term A1 Lender’s Term Loan A1, the Note to be issued with respect thereto shall be in the form of Exhibit B to this Amendment No. 3.

5.    Agreement of Term A1 Lenders. Each Term A1 Lender acknowledges that it has, independently and without reliance upon Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into the Term Loan Facility as a Term A1 Lender. Each Term A1 Lender also acknowledges that it will, independently and without reliance upon Agent or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Amendment No. 3 and any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

6.    Use of Proceeds. The proceeds of Term Loan A1 shall be used to pay a portion of the purchase price for the Diedrich Acquisition and for general corporate purposes of Borrower following the Diedrich Acquisition, and shall not be in contravention of any Law or of any Loan Document.

PART II

ADDITIONAL AMENDMENTS TO CREDIT AGREEMENT

7.    Additional Amendments.

7.1.    Section 2.14 of the Credit Agreement is hereby inserted as follows:

“2.14  Increase in Facility

(a) Request for Increase. Provided there exists no Default or Event of Default, upon notice to the Agent (who shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the Aggregate Commitments by an amount (for all such requests) not exceeding $100,000,000.00; provided that (i) any such request for an increase shall

6

be in a minimum amount of $10,000,000, (ii) the Borrower may make a maximum of three such requests, and (iii) any such increase shall be in the form of an increase to the Revolving Loans. At the time of sending such notice, the Borrower (in consultation with the Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

(b) Lender Elections to Increase. Each Lender shall notify the Agent in writing within such time period whether or not it agrees to increase its Commitment for Revolving Loans and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. No Lender shall have any obligation to increase its Commitment.

(c) Notification by Agent; Additional Lenders. The Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Agent, the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Agent and its counsel.

(d) Effective Date and Allocations. If the Aggregate Commitments are increased in accordance with this Section, the Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase. The Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such increase, the Borrower shall deliver to the Agent a certificate of each Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article 5 and the other Loan Documents are true and correct in all material respects on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and (B) no Default or Event of Default exists or will exist immediately following the effectiveness of the requested increase.

(f) Amendments. To the extent necessary to implement any increases in the Aggregate Commitments pursuant to this Section, Agent and Borrower

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shall amend Schedule A and the definition of “Applicable Percentage” to reflect such increase without the need of further consent by the Required Lenders.

(g) Conflicting Provisions. This Section shall supersede any provisions in Section 10.01 to the contrary.”

7.2    Section 7.02(j) of the Credit Agreement is amended by (i) deleting the reference to “$1,000,000”; and (ii) replacing it with the following: “$5,000,000”.

7.3    Section 7.03(e) of the Credit Agreement is amended by (i) deleting the reference to “$10,000,000”; and (ii) replacing it with the following: “$20,000,000”.

7.4    Section 7.03(h) of the Credit Agreement is amended by: (i) deleting the reference to “$1,000,000”; and (ii) replacing it with the following: “$10,000,000”.

PART III

WAIVERS

8.    Waivers.

8.1    Reference is made to Section 6.13 of the Credit Agreement, which requires Borrower to notify Agent at the time that any Person becomes a Subsidiary, and promptly thereafter (and in any event within 30 days), cause any such Domestic Subsidiary to become a Guarantor by executing and delivering to Agent a counterpart of the Guaranty or such other document as Agent shall deem appropriate for such purpose in form, content and scope reasonably satisfactory to Agent.

8.2    In connection with Borrower’s consummation of the Diedrich Acquisition, Diedrich has become a new Domestic Subsidiary of Borrower.

8.3    Agent and Lenders agree to extend the period within which Section 6.13 requires Borrower to cause Diedrich to comply with clauses (a) and (b) of Section 6.13 of the Credit Agreement from 30 days to 120 days from the date Diedrich becomes a Subsidiary. Notwithstanding the foregoing, Borrower shall pledge all of the Equity Interests it acquires in Diedrich on a rolling, as-acquired basis, as required by Section 6.16 the Credit Agreement.

8.4    Reference is further made to Section 7.03(g) of the Credit Agreement, which prohibits Indebtedness owning to sellers in Permitted Acquisitions in excess of $2,000,000 in the aggregate at any one time.

(a)    In order to consummate the Diedrich Acquisition, Borrower may be required to exercise its “Top-Up Option” (as defined in the Merger Agreement), pursuant to which Borrower would purchase a certain number of newly issued shares of common stock of Diedrich. Pursuant to the terms of the Merger Agreement, Borrower may pay for any such shares by executing and delivering to Diedrich a promissory note.

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(b)    For the sole purpose of facilitating the Borrower’s exercise of its Top-Up Option in order to consummate the Diedrich Acquisition, Agent and Lenders hereby waive Section 7.03(g) of the Credit Agreement to the extent necessary to permit Borrower to execute and deliver such a promissory note, provided that such promissory note shall not remain outstanding for more than one (1) Business Day.

8.5    The waivers granted herein are limited solely to the Diedrich Acquisition and time period and shall not extend to or affect the application of Section 6.13 or Section 7.03(g) to any other Permitted Acquisition or other formation of a new Domestic Subsidiary.

PART IV

OMNIBUS PROVISIONS

9.    Upfront Fees. Borrower shall pay to Agent, for the account of the Lenders set forth below, a fee (the “Upfront Fee”) as follows: (i) for each Term A1 Lender, an amount equal to 50 basis points on the amount of such Term A1 Lender’s Term Loan A1 Commitment; and, (ii) for all Lenders signatory hereto, whether or not participating in Term Loan A1, an amount equal to 12.5 basis points on each such Lender’s Aggregate Commitments as an amendment fee in consideration for each such Lender’s consent to this Amendment No. 3. The Upfront Fee shall be payable by Borrower to Agent in full on the Closing Date.

10.    Conditions to Effectiveness of this Amendment No. 3. The effectiveness of this Amendment No. 3, and the obligation of each Term A1 Lender to make Term Loan A1 pursuant to this Amendment No. 3, are subject to the satisfaction of each of the following conditions precedent:

10.1    Agent’s receipt of the following, each of which shall be originals or PDF versions (in each case followed promptly by originals), each properly executed by a Responsible Officer of the signing Loan Party, each dated as of the Closing Date and each in form and substance reasonably satisfactory to Agent:

(a)    executed counterparts of this Amendment No. 3 by Borrower, Agent and each Lender and the Consent of Guarantor attached hereto as Exhibit C by each Guarantor, sufficient in number for distribution to Agent, each Lender and Borrower;

(b)    with respect to each Term A1 Lender, a Note executed by Borrower in favor of each Term A1 Lender requesting a Note, which shall be in the form of Exhibit B hereto;

(c)    such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment No. 3 and the other Loan Documents provided in connection herewith to which such Loan Party is a party, and certifying and attaching the resolutions adopted by such Loan Party approving or consenting to Term Loan A1, the amendments to the Credit Agreement, and the waiver and extension of the 30-day guaranty requirement for Diedrich;

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(d)    such documents and certifications as Agent may reasonably require to evidence that each Loan Party is duly organized, validly existing, in good standing and qualified to engage in business in each jurisdiction where such qualification is required, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(e)    a favorable opinion of counsel to the Loan Parties reasonably acceptable to Agent addressed to Agent and each Lender, as to the matters set forth concerning the Loan Parties and the Loan Documents in the form and substance previously delivered to Agent pursuant to the Credit Agreement;

(f)    a certificate signed by a Responsible Officer of Borrower certifying that:

(i)    before and after giving effect to the Diedrich Acquisition, the borrowing of Term Loan A1 and this Amendment No. 3, (1) no Default or Event of Default exists or would result from the Diedrich Acquisition, the borrowing of Term Loan A1 or from the application of the proceeds thereof, and (2) the representations and warranties contained in Article V of the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date. For purposes hereof, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement;

(ii)    there has not occurred any event or state of facts that constitutes or reflects the occurrence of a Material Adverse Effect under the Credit Agreement since September 30, 2008;

(iii)    there is no action, suit, investigation or proceeding pending or, to the knowledge of Borrower, threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to (x) have a Material Adverse Effect, (y) adversely affect the ability of Borrower and the other Loan Parties to perform their obligations under any of the Diedrich Acquisition, the Credit Agreement or this Amendment No. 3 or (z) adversely affect the rights and remedies of Agent or the Lenders under the Existing Credit Facilities; and

(iv)    all consents, licenses, permits and approvals necessary for the execution, delivery and performance of this Amendment No. 3 have been obtained and are in full force and effect;

(g)    receipt by Agent of the financial statements required by Section 6.01(b) of the Credit Agreement for the fiscal quarter ended September 26, 2009, and the certificates with respect thereto required by Section 6.02 of the Credit Agreement, and such financial statements and certificates shall not reflect the occurrence of any Material Adverse Effect since September 27, 2008;

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10.2    Receipt by Agent of payment in cash of the fees in the amounts specified in the Fee Letter, dated December 18, 2009, by and between Borrower, Agent and Banc of America Securities LLC, as the Arranger;

10.3    Borrower shall have paid all reasonable expenses, including, but not limited to, reasonable fees, charges and disbursements of counsel to Agent and Arranger (directly to such counsel if requested by Agent) to the extent invoiced prior to the Closing Date, plus such additional amounts of such expenses, fees, charges and disbursements as shall constitute its reasonable estimate of such expenses, fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between Borrower and Agent), whether or not the closing occurs;

10.4    On the Closing Date, after giving effect to the Diedrich Acquisition and the borrowing of Term Loan A1, Borrower shall, on a consolidated basis, have a Leverage Ratio (as hereinafter defined) not exceeding 2.50:1.00. The “Leverage Ratio” shall mean the ratio of Funded Debt, determined on a pro forma basis as of the date of the Closing of the Diedrich Acquisition, to Adjusted EBITDA (as defined in the Credit Agreement), determined as of the most recently completed fiscal quarter of Borrower for which a pro forma Compliance Certificate has been delivered, and calculated in a pro forma basis in the manner provided for by the Credit Agreement;

10.5    Agent and Lenders shall have received from Borrower updated financial projections and business assumptions covering the period until the Maturity Date, which shall be in a form and substance reasonably satisfactory to Agent and the Arranger;

10.6    Receipt by Agent of the Upfront Fees payable to Lenders; and

10.7    On the Closing Date, contemporaneously with the effectiveness of this Amendment No. 3, Borrower will have consummated the Closing of the Diedrich Acquisition.

Without limiting the generality of the provisions of Section 9.04 of the Credit Agreement, for purposes of determining compliance with the conditions specified in this Section 10, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

11.    Representations and Warranties. Borrower represents and warrants to Agent and the Lenders as follows:

11.1    Existence, Qualification and Power. Each Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under this Agreement and the other Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each

11

jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i), or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

11.2    Authorization; No Contravention. The execution, delivery and performance by each Loan Party of this Amendment No. 3 and other Loan Documents to which such Person is a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any such Person’s Organizational Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.

11.3    Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Amendment No. 3 or any Loan Document other than customary filings with respect to Collateral.

11.4    Binding Effect. This Agreement has been, and each other Loan Document to be executed in connection herewith, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other such Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other Laws of general application affecting creditors and general principles of equity.

11.5    Credit Agreement. Before and after giving effect to Term Loan A1 and this Amendment No. 3, the representations and warranties contained in Article V of the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date. For purposes hereof, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement.

12.    Ratification, etc. Except as otherwise expressly provided hereunder, the Credit Agreement, the other Loan Documents and all documents, instruments and agreements related thereto are hereby ratified and confirmed in all respects and shall continue in full force and effect. This Amendment No. 3 and the Credit Agreement as previously amended shall hereafter be read and construed as a single document.

13.    Miscellaneous.

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13.1    Counterparts. This Amendment No. 3 may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment No. 3 by telecopy or PDF shall be as effective as delivery of an original executed counterpart of this Amendment No. 3.

13.2    Severability. If any provision of this Amendment No. 3 or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment No. 3 and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

13.3    GOVERNING LAW; JURISDICTION; ETC. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Amendment No. 3 as a sealed instrument as of the date first set forth above.

BORROWER:
GREEN MOUNTAIN COFFEE ROASTERS, INC.
By:	/s/ Frances G. Rathke
Name:	Frances G. Rathke
Title:	Chief Financial Officer and Treasurer

BANK OF AMERICA, N.A.,
as Administrative Agent
By:	/s/ Roberto Salazar
Name:	Roberto Salazar
Title:	Assistant Vice President

BANK OF AMERICA, N.A., as a Lender, Swing Line Lender and L/C Issuer		KEYBANK NATIONAL ASSOCIATION, as a Lender
By:	/s/ Christopher S. Allen	By:	/s/ Martin J. Costello
Name:	Christopher S. Allen	Name:	Martin J. Costello
Title:	Senior Vice President	Title:	Vice President
BANC OF AMERICA SECURITIES LLC, as Arranger		BMO CAPITAL MARKETS FINANCING, INC., as Co-Documentation Manager
By:	/s/ Mark Hardison	By:	/s/ Tara Cuprisin
Name:	Mark Hardison	Name:	Tara Cuprisin
Title:	Vice President	Title:	Vice President
SOVEREIGN BANK, as Syndication Agent		BMO CAPITAL MARKETS FINANCING, INC., as a Lender
By:	/s/ Karen Ng	By:	/s/ Tara Cuprisin
Name:	Karen Ng	Name:	Tara Cuprisin
Title:	Vice President	Title:	Vice President

SOVEREIGN BANK, as a Lender		COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. “RABOBANK NEDERLAND”, NEW YORK BRANCH, as a Lender
By:	/s/ Karen Ng	By:	/s/ Theodore W. Cox
Name:	Karen Ng	Name:	Theodore W. Cox
Title:	Vice President	Title:	Executive Director
		By:	/s/ Rebecca Morrow
		Name:	Rebecca Morrow
		Title:	Executive Director
TD BANK, N.A., as Documentation Agent		BROWN BROTHERS HARRIMAN & CO., as a Lender
By:	/s/ Douglas S. Graham	By:	/s/ J.E. Hall
Name:	Douglas S. Graham	Name:	J.E. Hall
Title:	Senior Vice President	Title:	Managing Director
TD BANK, N.A., as a Lender		HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Douglas S. Graham	By:	/s/ David A. Carroll
Name:	Douglas S. Graham	Name:	David A. Carroll
Title:	Senior Vice President	Title:	Vice President, Senior Relationship Manager
SUNTRUST BANK, as a Lender
By:	/s/ Gabe Bonfield
Name:	Gabe Bonfield
Title:	Vice President

SCHEDULE A

COMMITMENTS, TERM LOAN A, TERM LOAN A1 AND APPLICABLE PERCENTAGES

	REVOLVING LOANS (Committed Loans Pursuant to Section 2.01 of the Credit Agreement)					TERM LOAN A					TERM LOAN A1					ALL LOANS
Lender	Commitment Amount		Revolving Percentage			Term Loan A Amount		Term Loan A Percentage			Term Loan A1 Amount		Term Loan A1 Percentage			Amount of All Loans		Percentage of All Loans
Bank of America, N.A.	$	50,000,000		22.22222222	%	$	10,175,000		22.0	%	$	28,000,000		20.0	%	$	88,175,000		21.440729	%
Sovereign Bank	$	30,500,000		13.55555556	%	$	6,290,000		13.6	%	$	17,000,000		12.1428571	%	$	53,790,000		13.079635	%
TD Bank, N.A.	$	30,500,000		13.55555556	%	$	6,660,000		14.4	%	$	20,000,000		14.2857143	%	$	57,160,000		13.899088	%
BMO Capital Markets Financing, Inc.	$	23,000,000		10.22222222	%		N/A		N/A			N/A		N/A		$	23,000,000		5.592705	%
KeyBank National Association	$	23,000,000		10.22222222	%		N/A		N/A		$	10,000,000		7.1428571	%	$	33,000,000		8.024316	%
Rabobank Nederland, New York Branch	$	23,000,000		10.22222222	%	$	4,625,000		10.0	%	$	20,000,000		14.2857143	%	$	47,625,000		11.580547	%
Brown Brothers Harriman & Co.	$	15,000,000		6.66666667	%		N/A		N/A			N/A		N/A		$	15,000,000		3.647416	%
HSBC Bank USA, National Association	$	15,000,000		6.66666667	%	$	9,250,000		20.0	%	$	20,000,000		14.2857143	%	$	44,250,000		10.759878	%
Sun Trust Bank	$	15,000,000		6.66666667	%	$	9,250,000		20.0	%	$	25,000,000		17.8571429	%	$	49,250,000		11.975684	%
TOTAL	$	225,000,000		100.00000000	%	$	46,250,000		100.00000	%	$	140,000,000		100.00000	%	$	411,250,000		100.000	%

EXHIBIT A

Form of Committed Loan Notice for Term Loan A1

Date: [                 ] [    ], 2010

Bank of America, N.A., as Administrative Agent

100 Federal Street

Boston, MA 02110

Attention: [                                    ]

Re: Green Mountain Coffee Roasters, Inc. – Committed Loan Notice for Term Loan A1

Ladies and Gentlemen:

Green Mountain Coffee Roasters, Inc. (the “Borrower”) hereby submits this Committed Loan Notice for Term Loan A1 pursuant to Section 2.02 of the Amended and Restated Credit Agreement, dated as of December 3, 2007, as amended by that certain Amendment No. 1 to Amended and Restated Revolving Credit Agreement, dated as of July 18, 2008, as further amended by that certain Agreement to Exercise Facility Increase Option and Amendment No. 2 to Amended and Restated Revolving Credit Agreement, as further amended by that certain Amendment No. 3 to Amended and Restated Revolving Credit Facility (as further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Borrower, its Subsidiaries as Guarantors, the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent (the “Agent”), L/C Issuer and Swing Line Lender, Banc of America Securities LLC as sole Lead Arranger and sole Book Manager, Sovereign Bank as Syndication Agent, TD Bank, N.A. as Documentation Agent, and BMO Capital Markets Financing, Inc. and KeyBank National Association as Co-Documentation Managers. All capitalized terms used in this Committed Loan Notice for Term Loan A1 shall have the respective meanings provided therefore in the Credit Agreement.

Borrower hereby represents, warrants and certifies to you that (a) Borrower has performed and complied with all of the terms and conditions contained in the Credit Agreement required to be performed or complied with by Borrower prior to or at the time of the Borrowing requested hereunder, (b) the representations and warranties of Borrower contained in the Credit Agreement or otherwise made by Borrower in connection with the transactions contemplated thereby were true and correct in all material respects when made and are true and correct in all material respects on and as of the date hereof with the same effect as if made herein (except to the extent that such representations and warranties relate expressly to an earlier date) and (c) at and as of the date hereof, Borrower is not in default of any of its Obligations under the Credit Agreement, and no Default or Event of Default exists.

[Use applicable section]

Request for Term Loan A1¹. The undersigned hereby requests that the Term A1 Lenders make a Term Loan A1 on the Closing Date (as defined in Amendment No. 3) for the Interest Period commencing on the Closing Date and ending on [                    ]² in the aggregate principal amount of $140,000,000.

[or]

Request for [Conversion] [Continuation] [Type of Loan]³. The undersigned hereby requests a [conversion] [continuation] of a [Type of Loan] on [insert requested date of conversion or continuation, as applicable]⁴ [for the Interest Period commencing on [requested date of Borrowing] and ending on                     ]⁵ in the principal amount of [$                    ].⁶

[Remainder of Page Left Blank]

¹ Term Loan A1 requests must be received by Agent not later than 12:00 noon (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans.

² For Eurodollar Rate Loans, one, two, three or six months after the requested date of Borrowing (as set forth in more detail in Credit Agreement).

³ See fn.1 above.

⁴ Requested day of conversion or continuation must be a Business Day.

⁵ See fn.2 above.

⁶ Each conversion to or continuation of Eurodollar Rate Loans shall be in the principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each conversion to Base Rate Loans shall be in a principal amount of $250,000 or a whole multiple of $50,000 in excess thereof.

IN WITNESS WHEREOF, the undersigned has caused this Committed Loan Notice for Term Loan A1 to be signed as an instrument under seal by its duly authorized officer as of the day and year first above written.

BORROWER:
GREEN MOUNTAIN COFFEE ROASTERS, INC.
By:
	Name:
	Title:

EXHIBIT B

Form of Term Loan A1 Note

$ [                            ] [                                 ] [        ], 2010

FOR VALUE RECEIVED, the undersigned (“Borrower”), hereby promises to pay to                                                   or registered assigns (“Term A1 Lender”) the principal amount set forth above, in accordance with the provisions of that certain Amended and Restated Credit Agreement, dated as of December 3, 2007, as amended by that certain Amendment No. 1 to Amended and Restated Credit Agreement, dated as of July 18, 2008, as further amended by that certain Agreement to Exercise Facility Increase Option and Amendment No. 2 to Amended and Restated Revolving Credit Agreement, dated as of June 29, 2009, as further amended by that certain Amendment No. 3 to Amended and Restated Revolving Credit Agreement, dated as of January [        ], 2010, by and among Borrower, Subsidiaries of Borrower as Guarantors, the Lenders identified therein, Bank of America, N.A., as Administrative Agent (the “Agent”), L/C Issuers and Swing Line Lender, and Banc of America Securities LLC, as sole Lead Arranger (the “Arranger”) and sole Book Manager (as further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”).

Borrower promises to pay interest on the unpaid principal amount of Term Loan A1 from the date made until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to Agent for the account of Term A1 Lender in Dollars in immediately available funds at the Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This Note is also entitled to the benefits of the Guaranty (as defined in the Credit Agreement) and is secured by the Collateral (as defined in the Credit Agreement). Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by Term A1 Lender shall be evidenced by one or more loan accounts or records maintained by Term A1 Lender in the ordinary course of business. The Term A1 Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Term Loan A1 and payments with respect thereto.

Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF.

IN WITNESS WHEREOF, the undersigned has caused this Term Loan A1 Note to be signed as an instrument under seal by its duly authorized officer as of the day and year first above written.

BORROWER:
GREEN MOUNTAIN COFFEE ROASTERS, INC.
By:
	Name:
	Title:

EXHIBIT C

Consent of Guarantor

The undersigned guarantor (the “Guarantor”) has guaranteed all of the Obligations under (and as defined in) the Amended and Restated Credit Agreement, dated as of December 3, 2007, as amended by that certain Amendment No. 1 to Amended and Restated Revolving Credit Agreement, dated as of July 18, 2008, as amended further by that certain Agreement to Exercise Facility Increase Option and Amendment No. 2 to Amended and Restated Revolving Credit Agreement, dated as of June 29, 2009 (as further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Borrower, its Subsidiaries as Guarantors, the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent (the “Agent”), L/C Issuer and Swing Line Lender, Banc of America Securities LLC as sole Lead Arranger and sole Book Manager, Sovereign Bank as Syndication Agent, TD Bank, N.A. as Documentation Agent, and BMO Capital Markets Financing, Inc. and KeyBank National Association as Co-Documentation Managers. By executing this consent, the Guarantor hereby absolutely and unconditionally reaffirms to the Lenders that the Guarantor’s Guaranty remains in full force and effect and covers all Obligations under the Credit Agreement, including Term Loan A and Term Loan A1. In addition, the Guarantor hereby acknowledges and agrees to the terms and conditions of Amendment No. 3 to Amended and Restated Revolving Credit Agreement, dated as of January [        ], 2010, among Borrower, Agent and the Lenders named therein, and of the Credit Agreement and the other Loan Documents as affected hereby (including, without limitation, the making of the representations and warranties and the performance of the covenants applicable to it herein or therein).

[KEURIG, INCORPORATED

By:                                                                                                 

Name:

Title:]

[TRAIN STATION CAFÉ

By:                                                                                                 

Name:

Title:]

[PEBBLES ACQUISITION SUB, INC.

By:                                                                                                 

Name:

Title:]

EX-10.29

Exhibit 10.29

Execution Version

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made as of September 28, 2010, by and between Green Mountain Coffee Roasters, Inc., a Delaware corporation (the “Company”), and Luigi Lavazza S.p.A., an Italian corporation (“Lavazza”). Unless otherwise defined herein, capitalized terms used in this Agreement have the respective meanings ascribed to them in Section 1.

RECITALS

WHEREAS, the Company and Lavazza have entered into that certain Common Stock Purchase Agreement, dated as of August 10, 2010 (the “Purchase Agreement”), pursuant to which Lavazza has agreed to purchase a number, determined in accordance with the Purchase Agreement, of newly issued shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”); and

WHEREAS, the Company and Lavazza wish to provide for certain arrangements with respect to the registration of the Registrable Securities (as defined below) by the Company under the Securities Act.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and other consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

Definitions

Certain Definitions. In addition to the terms defined elsewhere in this Agreement, as used in this Agreement, the following terms have the respective meanings set forth below:

(a)    “Additional Shares” shall have the meaning given to such term in the Purchase Agreement.

(b)    “Board” shall mean the Board of Directors of the Company.

(c)    “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(d)    “Demand Notice” means a written request from Lavazza to the Company to file a Demand Registration Statement, stating the number of Registrable Securities to be included on such Demand Registration Statement.

(e)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(f)    “New Securities” shall have the meaning given to such term in the Purchase Agreement.

(g)    “Other Selling Stockholders” shall mean persons other than Lavazza and Lavazza’s Subsidiaries who are from time to time entitled to include their Other Shares in certain registrations hereunder.

(h)    “Other Shares” shall mean shares of Common Stock, other than Registrable Securities (as defined below), with respect to which registration rights have been granted by the Company from time to time.

(i)    “Person” shall mean any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

(j)    “Registrable Securities” shall mean the Shares, any Additional Shares and any New Securities purchased by Lavazza in accordance with the Purchase Agreement, in each case, that are held, from time to time, by Lavazza.

(k)    The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

(l)    “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses.

(m)    “Registration Trigger Event” shall mean the earlier to occur of (i) such time when Robert Stiller, members of his family and trusts for their benefit cease to have, in the aggregate, “beneficial ownership” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of at least 10% of the outstanding equity securities of the Company entitled to vote for members of the Board or equivalent governing body of the Company or (ii) January 31, 2011 if the Company and Lavazza have not executed the Distribution Agreement as contemplated by the Purchase Agreement unless such parties mutually agree that negotiations for such Distribution Agreement are continuing in good faith.

(n)    “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(o)    “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(p)    “Selling Expenses” shall mean all underwriting discounts, selling commissions, brokerage fees and stock transfer taxes applicable to the sale of Registrable Securities, the fees and expenses of any legal counsel and any other advisors Lavazza engages

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and all similar fees and commissions relating to Lavazza’s disposition of the Registrable Securities.

(q)    “Shares” shall have the meaning given to such term in the Purchase Agreement.

(r)    “Subsidiary” shall mean, with respect to any Person, any other Person (A) of which such Person or a subsidiary of such Person is a general partner or (B) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or Persons performing similar functions with respect to such entity, is directly or indirectly owned by such Person and/or one or more subsidiaries thereof.

Registration Rights

Demand Registration.

(s)    Request for Registration. Subject to the limitations set forth in Section 2.1(c) of this Agreement, if after the earlier to occur of (i) the first anniversary of the date of this Agreement or (ii) a Registration Trigger Event the Company shall receive from Lavazza a Demand Notice, the Company will, as soon as reasonably practicable, file and use its commercially reasonable efforts to effect the requested registration of Registrable Securities on Form S-3 (or any successor form thereto) and, if not then available to the Company, another applicable form (a “Demand Registration Statement”). Once a Demand Registration Statement is declared effective by the Commission, the Company shall maintain its effectiveness for at least one hundred twenty (120) days (or such shorter period as will terminate when all Registrable Securities covered by such Demand Registration Statement have been sold or withdrawn). For the avoidance of doubt, the Company may, but shall have no obligation to, maintain the effectiveness of any Demand Registration Statement in respect of any shares of Common Stock that were Registrable Securities at the time a Demand Registration Statement was declared effective but have ceased to be Registrable Securities under the terms of Section 2.10 of this Agreement. Notwithstanding anything contained herein, in the event that the Commission or applicable federal securities laws and regulations prohibit the Company from including all of the Registrable Securities requested by Lavazza to be registered pursuant to this Section 2.1, then the Company shall be obligated to include in such Demand Registration Statement only such limited portion of the Registrable Securities as is permitted by the Commission or such federal securities laws and regulations.

(t)    Demand Withdrawal. Lavazza may withdraw its Registrable Securities from a Demand Registration at any time. In such case, the Company shall cease all efforts to secure registration and such registration nonetheless shall be deemed a Demand Registration Statement for purposes of Section 2.1(c)(ii) unless (i) the withdrawal is based on the reasonable determination of Lavazza that there has been, since the date of such request, a material adverse change in the business or prospects of the Company or, based on the reasonable determination of Lavazza and the Company that there has been, since the date of such request, a material adverse change in general market conditions or (ii) Lavazza shall have paid or reimbursed the Company

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for all of the Registration Expenses incurred by the Company in connection with the withdrawn registration.

(u)    Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, a registration pursuant to any Demand Notice in accordance with this Section 2.1:

(i)    in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(ii)    after the Company has filed with the Commission three (3) Demand Registration Statements pursuant to this Section 2.1 (counting for these purposes only registrations which have been declared or ordered effective);

(iii)    if the Company has filed with the Commission a Demand Registration Statement pursuant to this Section 2.1 within the preceding six (6) months, and such Demand Registration Statement has been declared or ordered effective;

(iv)    during the period starting with the date thirty (30) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date ninety (90) days after the effective date of, a Company-initiated registration; provided that the Company is actively employing in good faith best efforts to cause such registration statement to become effective; or

(v)    if a Demand Notice request is for a number of Registrable Securities that is smaller than the greater of (i) one-third (1/3) of the Registrable Securities then held by Lavazza or (ii) one million (1,000,000) shares of Common Stock.

(v)    Deferral and Suspension. At anytime after receiving a Demand Notice or after any Demand Registration Statement has become effective, the Company may, upon giving prompt written notice of such action to Lavazza, defer the filing of or suspend the use of any such Demand Registration Statement if, in the good faith judgment of the Company, the filing or use of a registration statement covering the Registrable Securities would be detrimental to the Company or its shareholders at such time and the Company concludes, as a result, that it is in the best interests of the Company or its shareholders to defer the filing or suspend the use of such Demand Registration Statement at such time. The Company shall have the right to defer the filing of or suspend such Demand Registration Statement for a period of not more than one hundred twenty (120) days from the date the Company notifies Lavazza of such deferral or suspension. In the case of the suspension of any effective Demand Registration Statement, Lavazza, immediately upon receipt of notice thereof from the Company, will discontinue any sales of Registrable Securities pursuant to such Demand Registration Statement until advised in writing by the Company that the use of such Demand Registration Statement may be resumed. In the case of a deferred Demand Registration Statement, the Company shall provide prompt written notice to Lavazza of (i) the Company’s decision to file or seek effectiveness of the Demand Registration Statement following such deferral and (ii) the effectiveness of such

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Demand Registration Statement. Notwithstanding the foregoing, Lavazza shall be entitled, at any time after receiving notice of deferral pursuant to this Section 2.1(d) and before the Demand Registration Statement becomes effective, to withdraw such Demand Notice request and, if such request is withdrawn, such registration shall not count as one of the permitted Demand Registration Statements pursuant to Section 2.1(c)(ii) of this Agreement.

(w)    Other Shares. Subject to Section 2.3(d) below, any Demand Registration Statement filed pursuant to a Demand Notice may include Other Shares, and may include securities of the Company being sold for the account of the Company.

Company Registration.

(x)    Company Registration. After the first anniversary of the date of this Agreement, if the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Section 2.1 hereof, a registration relating solely to employee or director benefit plans or employee dividend reinvestment plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization (including, without limitation, by way of merger of the Company or any of its Subsidiaries with any other business) or acquisition of another business or a registration on any registration form that does not permit secondary sales, the Company will:

(i)    promptly give written notice of the proposed registration to Lavazza; and

(ii)    include in such registration, except as set forth in Section 2.3(d) below, and in any underwriting involved therein all of such Registrable Securities as are specified in a written request or requests made by Lavazza received by the Company within ten (10) business days after such written notice from the Company is received by Lavazza. Notwithstanding anything contained herein, in the event that the Commission or applicable federal securities laws and regulations prohibit the Company from including all of the Registrable Securities requested by Lavazza to be registered in a registration statement pursuant to this Section 2.2(a) then the Company shall be obligated to include in such registration statement only such limited portion of the Registrable Securities as is permitted by the Commission or such federal securities laws and regulations.

(y)    Right to Terminate Registration. The Company shall have the right to, in its sole discretion, defer, terminate or withdraw any registration initiated by it under this Section 2.2 whether or not Lavazza has elected to include any Registrable Securities in such registration.

Underwriting.

(z)    If, pursuant to Section 2.1, Lavazza intends to distribute the Registrable Securities covered by its request by means of an underwriting, it shall so advise the Company as part of its request made pursuant to Section 2.1(a).

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(aa)    In connection with any offering pursuant to Section 2.1 involving an underwriting of shares of Common Stock, the Company shall be entitled to select the underwriter or underwriters for such offering, subject to the consent of Lavazza, such consent not to be unreasonably withheld, conditioned or delayed. In connection with any offering pursuant to Section 2.2 involving an underwriting of shares of Common Stock, subject to the rights of any other security holder at whose demand such offering will be effected, the Company shall be entitled to select the underwriter or underwriters for such offering in its sole discretion.

(bb)    In connection with any offering pursuant to Section 2.1 or 2.2 involving an underwriting of shares of Common Stock, the Company will not be required to include any of the Registrable Securities in such underwriting unless Lavazza (i) accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company in accordance with Section 2.3(b), (ii) enters into an underwriting agreement in customary form with such underwriter or underwriters, and (iii) completes and executes all questionnaires, powers of attorney, custody agreements, lock-up agreements, indemnitees and other documents required under such underwriting terms.

(cc)    If the total amount of securities to be sold in any offering pursuant to Section 2.1 or Section 2.2 exceeds the amount that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company will be required to include in the offering only that number of such securities, including Registrable Securities and securities of Other Selling Stockholders (subject in each case to the cutback provisions set forth in this Section (d)), that the underwriters and the Company determine in their sole discretion will not jeopardize the success of the offering. If the registration has been requested pursuant to Section 2.1 hereof, the number of shares that are entitled to be included in the registration and underwriting will be allocated in the following manner: (a) first, securities of Other Selling Stockholders requested to be included in such registration will be excluded, (b) second, shares of Company equity securities that the Company desires to include in such registration will be excluded and (c) third, Registrable Securities requested to be included in such registration by Lavazza will be excluded. If the registration has been initiated pursuant to Section 2.2 hereof, the number of shares that are entitled to be included in the registration and underwriting will be allocated in the following manner: (x) first, securities of Other Selling Stockholders requested to be included in such registration and Registrable Securities requested to be included in such registration by Lavazza will be excluded (to be apportioned pro rata among Lavazza and the Other Selling Stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as mutually agreed to by Lavazza and such Other Selling Stockholders) and (y) second, shares of Company equity securities that the Company desires to include in such registration will be excluded. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any selling stockholder to the nearest 100 shares.

Expenses of Registration. All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1 and 2.2 hereof shall be borne by the Company, except as provided in Section 2.1(b)(ii). All Selling Expenses relating to securities registered on behalf of Lavazza shall be borne solely by Lavazza.

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Registration Procedures. In the case of each registration of Registrable Securities effected by the Company pursuant to Sections 2.1 and 2.2 hereof, the Company will keep Lavazza advised as to the initiation of each such registration and as to the status thereof. The Company will use its commercially reasonable efforts, within the limits set forth in this Section 2, to:

(dd)    Keep such registration statement effective for a period of at least one hundred and twenty (120) days from the date on which such registration statement became effective;

(ee)    Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be (i) reasonably requested by Lavazza or (ii) necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) of this Section 2.5;

(ff)    Furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, and such other documents to facilitate the public sale or other disposition of such securities as is customary and as Lavazza or any managing underwriter from time to time may reasonably request;

(gg)    Use its commercially reasonable efforts to cause all Registrable Securities covered by a registration statement under this Section 2 to be listed on each securities exchange on which similar securities of the Company are then listed;

(hh)    Notify Lavazza, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the issuance of any stop order by the Commission suspending the effectiveness of such registration statement or the initiation of any proceedings by any Person to such effect, and promptly use its commercially reasonable efforts to obtain the release of such suspension or (ii) the occurrence of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and promptly furnish to Lavazza copies of a supplement or amendment of such prospectus as may be necessary to correct such misstatement or omission; and

(ii)    In the case of any underwritten offering, (i) cause key executives of the Company and its Subsidiaries to participate under the direction of the managing underwriter in a “road show” scheduled by such managing underwriter in such locations and of such duration as in the reasonable judgment of such managing underwriter are customary and appropriate for such underwritten offering and (ii) obtain all customary legal opinions, auditors’ consents and comfort letters and experts’ cooperation as may be required covering substantially the same matters as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities.

Lavazza Obligations.

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(jj)    Discontinuance of Distribution. Lavazza agrees that, upon receipt of any notice from the Company of the occurrence of any event of the kind described in Section 2.5(e) hereof, Lavazza will immediately discontinue disposition of Registrable Securities pursuant to any registration statement covering such Registrable Securities until Lavazza’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.5(e) hereof or receipt of notice that no supplement or amendment is required and that Lavazza’s disposition of the Registrable Securities may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this Section 2.6(a).

(kk)    Compliance with Prospectus Delivery Requirements. Lavazza covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to any registration statement filed by the Company pursuant to Section 2.1 or Section 2.2.

Indemnification.

(ll)    In the event of any registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, to the extent permitted by law, the Company will indemnify Lavazza and each of its directors, officers and employees and each Person controlling Lavazza within the meaning of Section 15 of the Securities Act against any losses, claims, damages or liabilities to which any of the foregoing may become subject under the Securities Act, the Exchange Act or otherwise insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary or final prospectus contained in the such registration statement, or any amendment or supplement to such registration statement or (ii) any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, in the light of the circumstances under which they were made) not misleading. The Company will reimburse each of the foregoing for any legal or any other expenses reasonably incurred by such Person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable to any such Person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company by or on behalf of Lavazza in writing specifically for use in the preparation thereof (including, without limitation, the information provided by Lavazza pursuant to Section 2.8 hereof); provided, further that this indemnity will not apply to any loss, claim, damage or liability arising from an offer or sale of Registrable Securities occurring during a period in which the availability of the registration statement or any related prospectus may be suspended (a “Suspension Period”) so long as the Company theretofore provided Lavazza with notice thereof pursuant to Section 2.5(e) hereof.

(mm)    In the event of any registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, to the extent permitted by law, Lavazza will indemnify and hold harmless the Company and each of its directors, officers and employees and each Person controlling the Company within the meaning of Section 15 of the Securities Act

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against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing may become subject under the Securities Act, the Exchange Act or otherwise insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (A) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary or final prospectus contained in such registration statement, or any amendment or supplement to the registration statement or (ii) any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, in the light of the circumstances under which they were made) not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of Lavazza in writing, specifically for use in connection with the preparation of such registration statement, prospectus, amendment or supplement (as applicable) or (B) arise out of or are based upon a sale of Registrable Securities during a Suspension Period so long as the Company theretofore provided Lavazza with notice thereof pursuant to Section 2.5(e) hereof. In no event shall the liability of Lavazza be greater in amount than the dollar amount of the proceeds received by Lavazza under the sale of the Registrable Securities giving rise to such indemnification obligation, except in the case of any losses, claims, damages or liabilities (or actions in respect thereof) arising out of or based upon fraud or willful misconduct by Lavazza.

(nn)    Each party entitled to indemnification under this Section 2.7 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.7, to the extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom.

(oo)    If the indemnification provided for in this Section 2.7 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall

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be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Information. Lavazza shall furnish to the Company such information regarding Lavazza and the distribution proposed by Lavazza as the Company may reasonably request and as shall be reasonably required in connection with any registration referred to in this Section 2. Lavazza agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by Lavazza not misleading. Any sale of any Registrable Securities by Lavazza shall constitute a representation and warranty by Lavazza that the information relating to Lavazza and its plan of distribution is as set forth in the prospectus delivered by Lavazza in connection with such disposition, that such prospectus does not, as of the time of such sale, contain any untrue statement of a material fact relating to or provided by Lavazza or its plan of distribution and that such prospectus does not, as of the time of such sale, omit to state any material fact relating to or provided by Lavazza or its plan of distribution necessary in order to make the statements in such prospectus, in the light of the circumstances under which they were made, not misleading. Lavazza agrees to keep confidential the receipt of any notice received pursuant to Section 2.5(e) and the contents thereof, except as required pursuant to applicable law. Notwithstanding anything to the contrary herein, the Company shall be under no obligation to name Lavazza in any registration statement if Lavazza has not provided the information required by this Section 2.8 with respect to Lavazza as a selling securityholder in such registration statement or any related prospectus.

Rule 144 Requirements. With a view to making available to Lavazza the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the Commission that may at any time permit Lavazza to sell Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

(pp)    make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

(qq)    file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act;

(rr)    furnish to Lavazza upon written request a copy of the most recent annual or quarterly report of the Company and such other reports and other publicly available documents as may be reasonably requested by Lavazza to avail itself of any rule or regulation of the Commission which permits Lavazza to sell the Registrable Securities without registration; and

(ss)    prior to the filing of the registration statement or any amendment thereto (whether pre-effective or post-effective), and prior to the filing of any prospectus or prospectus

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supplement related thereto, to provide Lavazza with copies of all of the pages thereof (if any) that reference Lavazza.

Termination of Status as Registrable Securities. The Registrable Securities will cease to be Registrable Securities upon the earliest to occur of the following events: (i) such Registrable Securities have been sold pursuant to an effective registration statement; or (ii) such Registrable Securities have been sold by Lavazza pursuant to Rule 144 (or other similar rule); provided, further, that each Registrable Security will cease to be deemed a Registrable Security for so long as such Registrable Security may be resold by Lavazza pursuant to Rule 144(b)(1)(i).

Lock-Up. Without the prior written consent of the Company and any underwriter managing an underwritten offering of the Company’s securities, Lavazza shall not (a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer, directly or indirectly, any Common Stock or any securities convertible into or exercisable or exchangeable for such Common Stock or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common Stock, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of such Common Stock or such other securities, in cash or otherwise for any lock-up period agreed upon by the underwriters and the Company in an underwritten offering of the securities of the Company in which Registrable Securities are sold. For the avoidance of doubt, the provisions of this Section 2.11 are in addition to the limitations set forth in Section 8 of the Purchase Agreement.

Miscellaneous

Amendment. No amendment, alteration or modification of any of the provisions of this Agreement will be binding unless made in writing and signed by each of the Company and Lavazza.

Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved Person will be irreparably damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled (in addition to any other remedy to which it may be entitled in law or in equity) to injunctive relief, including, without limitation, specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

Notices. All notices required or permitted under this Agreement must be in writing and sent to the address or facsimile number identified below. Notices must be given: (a) by personal delivery, with receipt acknowledged; (b) by facsimile followed by hard copy delivered by the methods under clause (c) or (d); (c) by prepaid certified or registered mail, return receipt requested; or (d) by prepaid reputable overnight delivery service. Notices will be effective upon

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receipt. Either party may change its notice address by providing the other party written notice of such change. Notices shall be delivered as follows:

If to Lavazza:	Luigi Lavazza S.p.A.
	Attention: Simona Musso, General Counsel
	Corso Novara, 59
	10154 Torino, Italy
	Fax: +39-011-239-8635
with a copy to:	Cleary Gottlieb Steen & Hamilton LLP
	Attention: William A. Groll, Esq.
	One Liberty Plaza
	New York, NY 10006
	Fax: (212) 225-3999
If to the Company:	Green Mountain Coffee Roasters, Inc.
	Attention: Howard Malovany,
	Vice President, Corporate General Counsel, and Secretary
	33 Coffee Lane
	Waterbury, VT 05676
	Fax: (802) 882-4400
with a copy to:	Ropes & Gray LLP
	Attention: Jane D. Goldstein, Esq.
	One International Place
	Boston, MA 02110
	Fax: (617) 235-0376

Governing Law; Jurisdiction; Venue; Jury Trial.

(tt)    This Agreement shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

(uu)    Each of the Company and Lavazza irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, New York and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement and the transactions contemplated herein, or for recognition or enforcement of any judgment, and each of the Company and Lavazza irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York state court or, to the fullest extent permitted by applicable law, in such federal court. Each of the Company and Lavazza hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

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(vv)    Each of the Company and Lavazza irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement and the transactions contemplated herein in any court referred to in Section 3.4(b) hereof. Each of the Company and Lavazza hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(ww)    EACH OF THE COMPANY AND LAVAZZA HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH OF THE COMPANY AND LAVAZZA (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT EACH OF THE COMPANY AND LAVAZZA HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Successors, Assigns and Transferees. (a) Any and all rights, duties and obligations hereunder shall not be assigned, transferred, delegated or sublicensed by any party hereto without the prior written consent of the other party; provided, however, that Lavazza shall be entitled to transfer Registrable Securities to one or more of its Subsidiaries and, solely in connection therewith, may assign its rights hereunder in respect of such transferred Registrable Securities, in each case, so long as Lavazza is not relieved of any liability or obligations hereunder, without the prior consent of the Company. Any transfer or assignment made other than as provided in the first sentence of this Section 3.5 shall be null and void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and administrators of the parties hereto.

Entire Agreement. This Agreement and the Purchase Agreement, together with any exhibits hereto and thereto, constitute the entire agreement between the parties relating to the subject matter hereof and all previous agreements or arrangements between the parties, written or oral, relating to the subject matter hereof are superseded.

Waiver. No failure on the part of either party hereto to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of either party hereto in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver thereof; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

Severability. If any part of this Agreement is declared invalid or unenforceable by any court of competent jurisdiction, such declaration shall not affect the remainder of the Agreement

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and the invalidated provision shall be revised in a manner that will render such provision valid while preserving the parties’ original intent to the maximum extent possible.

Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts (including by facsimile or other electronic means), and all of which together shall constitute one instrument.

Term and Termination. Lavazza’s rights to request the registration of the Registrable Securities under this Agreement will terminate automatically once all Registrable Securities cease to be Registrable Securities pursuant to the terms of Section 2.10 of this Agreement.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement effective as of the day, month and year first above written.

GREEN MOUNTAIN COFFEE ROASTERS, INC.,
a Delaware Corporation
By:	/s/ Lawrence J. Blanford
Name:	Lawrence J. Blanford
Title:	President and Chief Executive Officer

LUIGI LAVAZZA S.P.A.,
an Italian corporation
By:	/s/ Gaetano Mele
Name:	Gaetano Mele
Title:	Chief Executive Officer

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EX-10.30

Exhibit 10.30

INDEMNIFICATION AGREEMENT

THIS AGREEMENT is made as of                     , 2009, by and among [            ], a Delaware corporation (the “Company”) and [            ] (the “Indemnitee”), a director of the Company.

RECITALS

WHEREAS, although the Certificate of Incorporation and the By-laws of the Company provide for indemnification of the officers and directors of the Company and the Indemnitee may also be entitled to indemnification pursuant to the Delaware General Corporation Law (“DGCL”), the DGCL expressly contemplates that contracts may be entered into between the Company and members of the Board of Directors of the Company (the “Board”) with respect to indemnification of directors; and

WHEREAS, the Indemnitee’s continued service to the Company substantially benefits the Company; and

WHEREAS, the Board has determined that it is in the best interest of the Company and that it is reasonably prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, the Indemnitee to the fullest extent permitted by applicable law in order to induce him to serve or continue to serve the Company free from undue concern that he will not be so indemnified or that any indemnification obligation will not be met; and

WHEREAS, this Agreement is a supplement to and in furtherance of (a) the Certificate and Bylaws of the Company, and (b) the certificate and bylaws or partnership agreement, as the case may be, of any Enterprise (as defined below) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, the Indemnitee does not regard the protection available under the Company’s or any other Enterprise’s certificate, bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as a director of the Company without adequate protection, and the Company desires the Indemnitee to serve in such capacity. The Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company and certain other Enterprises on the condition that he be so indemnified;

NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

1.    Services to the Company and Certain Other Enterprises. The Indemnitee will serve or continue to serve as a director of the Company for so long as the Indemnitee is duly elected or appointed or until the Indemnitee tenders his resignation.

2.    Definitions. As used in this Agreement:

“Corporate Status” describes the status of a person who is or was a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company or of any other Enterprise.

“Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

“Enterprise” shall mean (i) the Company and (ii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which is an affiliate or wholly or partially owned subsidiary of the Company and of which the Indemnitee is or was serving as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary; and (iii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company.

“Expenses” shall include attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses shall include such fees and expenses, and costs incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by the Indemnitee or the amount of judgments or fines against the Indemnitee.

“Fines” shall mean any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, trustee, general partner, managing member, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

“Indemnitee” is defined in the preamble to this Agreement.

“Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, including without limitation any such proceeding pending as of the date of this Agreement, in which the Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that the Indemnitee is or was a director of the Company, by reason of any action taken by him or of any action on his part while acting as director of the Company, or by reason of the fact that he is or was serving as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of any other Enterprise, in each case whether or not serving in such capacity at the time any Expense, judgment, fine or amount paid in settlement is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement.

“Independent Counsel” means, at any time, any law firm, or a member of a law firm, that (a) is experienced in matters of corporation law and (b) is not, at such time, or has not been in the five years prior to such time, retained to represent: (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnities under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto and to be jointly and severally liable therefor.

3.    Indemnity in Third-Party Proceedings. The Company shall be liable to indemnify the Indemnitee in accordance with the provisions of this Section 3 if the Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, the Indemnitee shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe that his conduct was unlawful.

4.    Indemnity in Proceedings by or in the Right of the Company. The Company shall be liable to indemnify the Indemnitee in accordance with the provisions of this Section 4 if the Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding (or any claim, issue or matter therein) if the Indemnitee acted in good faith and in a manner he reasonably

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believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which the Indemnitee shall have been finally adjudged by a court of competent jurisdiction to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnification.

5.    Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the extent that the Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall be liable to indemnify the Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall be liable to indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall be liable to indemnify the Indemnitee against all Expenses reasonably incurred in connection with any claim, issue or matter that is related to any claim, issue, or matter on which the Indemnitee was successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

6.    Indemnification For Other Fees and Expenses.

(a)    Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which the Indemnitee is not a party, the Company shall be liable to indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

(b)    Notwithstanding any other provision of this Agreement, the Company shall be liable to indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in taking any action to enforce any provision of this Agreement, including all Expenses incurred in bringing a claim, counterclaim or cross claim in a legal proceeding, arbitration or otherwise to enforce this Agreement or any provision of this Agreement.

7.    Additional Indemnification

(a)    Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall be liable to indemnify the Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnity shall be made under this Section 7(a) on account of the

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Indemnitee’s conduct which has been adjudicated to constitute a breach of the Indemnitee’s duty of loyalty to the Company or its shareholders or to constitute an act or omission not in good faith or involving intentional misconduct or a knowing violation of the law.

(b)    Notwithstanding any limitation in Sections 3, 4, 5 or 7(a), the Company shall be liable to indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(c)    For purposes of Sections 7(a) and 7(b), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

(1)    to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and

(2)    to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

8.    Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity payment in connection with any claim made against the Indemnitee:

(a)    for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount actually received under any insurance policy or other indemnity provision; or

(b)    for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934 or similar provisions of state statutory law or common law; provided however, that notwithstanding any limitation on the Company’s obligation to provide indemnification set forth in this Section 8(b) or elsewhere, Indemnitee shall be entitled to receive advancement of Expenses hereunder with respect to any such Claim unless and until a court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has violated said statute.

9.    Advancement of Expenses; Defense of Claim.

(a)    Notwithstanding any provision of this Agreement to the contrary, the Company shall be obligated to advance any and all Expenses incurred by the Indemnitee in connection with any Proceeding within 30 days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Such advances (i) shall be unsecured and interest free; (ii) shall

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be made without regard to the Indemnitee’s ability to repay the advances and without regard to the Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement; and (iii) shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advancement of Expenses solely upon the execution and delivery to the Company of an unsecured, unbonded written undertaking providing that the Indemnitee undertakes to repay the advance to the extent and only to the extent that it is ultimately determined that the Indemnitee is not entitled to be indemnified by the Company.

(b)    The Company will be entitled to participate reasonably in the Proceeding at its own expense.

10.    Procedure for Notification and Request for Indemnification.

(a)    To obtain advancement and/or indemnification under this Agreement, the Indemnitee shall, not later than sixty (60) days after receipt by the Indemnitee of notice of the commencement of any Proceeding, except for Proceedings pending as of the date of this Agreement, submit to the Company written notification of the Proceeding, together with any written undertaken required by Section 9(a) above; with regard to Proceedings as of the date of this Agreement, Indemnitee shall submit to the Company written notification not later than sixty (60) days after the date of this Agreement. The omission to notify the Company will relieve the Company of its indemnification obligations under this Agreement only to the extent the Company can establish that such omission to notify resulted in actual prejudice to it, and the omission to notify the Company will, in any event, not relieve the Company from any liability which it may have to indemnify the Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly upon receipt of notification from the Indemnitee pursuant to this Section 10(a), advise the Board in writing that the Indemnitee has provided such notification.

(b)    In order to obtain indemnification under this Agreement, the Indemnitee shall, at any time chosen by the Indemnitee in Indemnitee’s sole discretion, following notification by the Indemnitee of the commencement of any Proceeding pursuant to Section 10(a) of this Agreement and consistent with the time period for the duration of this Agreement as set forth in Section 15 of this Agreement, submit to the Company a written request for indemnification pursuant to this Section 10(b), including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. No determination of the Indemnitee’s entitlement to indemnification shall be made until such written request for a determination is submitted to the Company pursuant to this Section 10(b). The failure to submit a written request to the Company will relieve the Company of its indemnification obligations under this Agreement only to the extent the Company can establish that such failure to make a written request resulted in actual prejudice to it, and the failure to make a written request will not relieve the Company from any liability which it may have to indemnify the Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification. Upon submission of a written request for

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indemnification by the Indemnitee pursuant to this Section 10(b), the Indemnitee’s entitlement to indemnification shall be determined according to Section 11 of this Agreement.

11.    Procedure Upon Application for Indemnification.

(a)    Upon receipt of the Indemnitee’s written request for indemnification pursuant to Section 10(b), a determination with respect thereto shall be made in the specific case: (i) by the Disinterested Directors, even though less than a quorum, so long as the Indemnitee does not request that such determination be made by Independent Counsel; or (ii) if so requested by the Indemnitee, in his sole discretion, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee; and if it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten (10) days after such determination. The Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating with the Disinterested Directors or Independent Counsel, as the case may be, making such determination shall be advanced and borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company is liable to indemnify and hold the Indemnitee harmless therefrom.

(b)    In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as provided in this Section 11(b). The Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection by made by the Board, in which event the Board shall make such selection on behalf of the Company, subject to the remaining provisions of this Section 11(b)), and the Indemnitee or the Company, as the case may be, shall give written notice to the other, advising it or him of the identity of the Independent Counsel so selected. The Company or the Indemnitee, as the case may be, may, within 10 days after such written notice of selection shall have been received, deliver to the Indemnitee or the Company, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit. If, within 20 days after submission by the Indemnitee of a written request for indemnification pursuant to Section 10(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or the Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or the Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel

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under Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

12.    Presumptions and Effect of Certain Proceedings.

(a)    In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a notice and a request for indemnification in accordance with Section 10 of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by the Board) or of Independent Counsel to have made a determination prior to the commencement of any judicial proceeding or arbitration pursuant to this Agreement that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by the Board) or by Independent Counsel that the Indemnitee has not met such applicable standard of conduct, shall be admissible in evidence against the Indemnitee or otherwise referred to in any such judicial proceeding or arbitration for any purpose (including without limitation to rebut the presumption in favor of indemnification) or create a presumption that the Indemnitee has not met the applicable standard of conduct.

(b)    If the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether the Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the Indemnitee’s written request for indemnification pursuant to Section 10(b) of this Agreement, the requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Independent Counsel making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

(c)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful.

(d)    Reliance as Safe Harbor. For purposes of any determination of good faith, the Indemnitee shall be deemed to have acted in good faith if the Indemnitee’s action or failure

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to act is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to the Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

(e)    Actions of Others. The knowledge and/or actions, or failure to act, of any other director, partner, managing member, officer, agent, employee or trustee of the Enterprise shall not be imputed to the Indemnitee for purposes of determining his right to indemnification under this Agreement.

13.    Remedies of the Indemnitee.

(a)    In the event that (i) a determination is made pursuant to Section 11 of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) payment of indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (iv) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten (10) days after a determination has been made that the Indemnitee is entitled to indemnification, or (v) the Indemnitee determines in its sole discretion that such action is appropriate or desirable, the Indemnitee shall be entitled to seek an adjudication by a court of competent jurisdiction as to his entitlement to such indemnification or advancement of Expenses. Alternatively, the Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose the Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)    In the event that a determination shall have been made pursuant to Section 11(a) of this Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration, commenced pursuant to this Section 13, shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and the Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 13, the Company shall have the burden of proving the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 11(a) adverse to the Indemnitee for purposes of satisfying the Company’s burden of proof or for any other purpose. In any judicial proceeding or arbitration commenced pursuant to this Section 13, in the event that the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether the Indemnitee is entitled to indemnification has not made such a determination within the time period provided for under Section 12(b) of this Agreement, the Company shall stipulate and may not contest that the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best

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interests of the Company, and, with respect to any criminal action or Proceeding, had no reasonable cause to believe his conduct was unlawful.

(c)    If a determination shall have been made pursuant to Section 11(a) of this Agreement that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d)    In the event that the Indemnitee is a party to a judicial proceeding or arbitration pursuant to this Section 13 concerning his rights under, or to recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in said judicial adjudication or arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Indemnitee shall be entitled to recover from the Company (who shall be liable therefor), and shall be indemnified by the Company against, any and all Expenses reasonably incurred by the Indemnitee in connection with such judicial adjudication or arbitration.

(e)    The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. The Company shall be liable to indemnify the Indemnitee against any and all Expenses and, if requested by the Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance such Expenses to the Indemnitee that are incurred by Indemnitee in connection with any judicial adjudication or arbitration involving the Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

14.    Non-exclusivity; Survival of Rights; Insurance.

(a)    The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Company’s or any other Enterprise’s Articles of Incorporation, the Company’s or any other Enterprise’s Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect to any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the

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Company’s or any other Enterprise’s Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)    To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, partners, managing members, officers, employees, agents or trustees of the Company or of any other Enterprise, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, partner, managing member, officer, employee, agent or trustee under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to Section 10(a) hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c)    The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and only to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(d)    The Company’s obligation hereunder to indemnify, or advance Expenses to, the Indemnitee who was, is or will be serving as a director, partner, managing member, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount the Indemnitee has actually received as indemnification or advancement of Expenses from such other Enterprise.

15.    Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) 10 years after the date that the Indemnitee shall have ceased to serve as a director of the Company or as a director, partner, managing member, officer, employee, agent or trustee of any other Enterprise; or (b) 1 year after the final termination (i) of any Proceeding (including any rights of appeal) then pending in respect of which the Indemnitee requests indemnification or advancement of Expenses hereunder and (ii) of any judicial proceeding or arbitration pursuant to Section 13 of this Agreement (including any rights of appeal) involving the Indemnitee. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnitee and his heirs, executors and administrators.

16.    Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be

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affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

17.    Enforcement.

(a)    The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce the Indemnitee to continue to serve as a director of the Company, and the Company acknowledges that the Indemnitee is relying upon this Agreement in serving as a director of the Company.

(b)    This Agreement constitutes the entire agreement between the parties hereto with respect to the subject hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

18.    Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a wavier of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

19.    Notice by the Indemnitee. The Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of the Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

20.    Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a)    If to the Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as the Indemnitee shall provide in writing to the Company,

with a copy to:	[                                         ], Esq.
	Ropes & Gray LLP
	One International Place
	Boston, MA 02110-2624

(b)    If to the Company to:

[Address]

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or to any other address as may have been furnished to the Indemnitee in writing by the Company.

21.    Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to the Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying the Indemnitee, shall contribute to the amount incurred by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion in order to reflect (i) the relative benefits received by the Company and the Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officer, employees and agents) and the Indemnitee in connection with such event(s) and/or transaction(s).

22.    Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by the Indemnitee pursuant to Section 13(a) of this Agreement, the Company and the Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not a resident of the State of Delaware, irrevocably [RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801] as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

23.    Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

24.    Miscellaneous. Use of the masculine pronoun shall been deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

[remainder of page intentionally left blank]

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

Company:	[                                          ]
	By:
	Name:
	Title:
Indemnitee:
	Name: [                                         ]

[Signature Page to Indemnification Agreement]

EX-10.31

Exhibit 10.31

INDEMNIFICATION AGREEMENT

THIS AGREEMENT is made as of ___________, 2009, by and among [            ], a Delaware corporation (the “Company”) and [            ] (the “Indemnitee”), an executive officer of the Company.

RECITALS

WHEREAS, although the Certificate of Incorporation and the By-laws of the Company provide for indemnification of the officers and directors of the Company and the Indemnitee may also be entitled to indemnification pursuant to the Delaware General Corporation Law (“DGCL”), the DGCL expressly contemplates that contracts may be entered into between the Company and Executive Officers of the Company (the “Executive Officers”) with respect to indemnification of officers; and

WHEREAS, the Indemnitee’s continued service to the Company substantially benefits the Company; and

WHEREAS, the Board has determined that it is in the best interest of the Company and that it is reasonably prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, the Indemnitee to the fullest extent permitted by applicable law in order to induce him to serve or continue to serve the Company free from undue concern that he will not be so indemnified or that any indemnification obligation will not be met; and

WHEREAS, this Agreement is a supplement to and in furtherance of (a) the Certificate and Bylaws of the Company, and (b) the certificate and bylaws or partnership agreement, as the case may be, of any Enterprise (as defined below) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, the Indemnitee does not regard the protection available under the Company’s or any other Enterprise’s certificate, bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as a director of the Company without adequate protection, and the Company desires the Indemnitee to serve in such capacity. The Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company and certain other Enterprises on the condition that he be so indemnified;

NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

1.    Services to the Company and Certain Other Enterprises. The Indemnitee will serve or continue to serve as a director of the Company for so long as the Indemnitee is duly elected or appointed or until the Indemnitee tenders his resignation.

2.    Definitions. As used in this Agreement:

“Corporate Status” describes the status of a person who is or was a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company or of any other Enterprise.

“Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

“Disinterested Executive Officer” shall mean an Executive Officer of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

“Enterprise” shall mean (i) the Company and (ii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which is an affiliate or wholly or partially owned subsidiary of the Company and of which the Indemnitee is or was serving as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary; and (iii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company.

“Expenses” shall include attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses shall include such fees and expenses, and costs incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by the Indemnitee or the amount of judgments or fines against the Indemnitee.

“Fines” shall mean any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, trustee, general partner, managing member, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

“Indemnitee” is defined in the preamble to this Agreement.

“Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, including without limitation any such proceeding pending as of the date of this Agreement, in which the Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that the Indemnitee is or was a director of the Company, by reason of any action taken by him or of any action on his part while acting as director of the Company, or by reason of the fact that he is or was serving as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of any other Enterprise, in each case whether or not serving in such capacity at the time any Expense, judgment, fine or amount paid in settlement is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement.

“Independent Counsel” means, at any time, any law firm, or a member of a law firm, that (a) is experienced in matters of corporation law and (b) is not, at such time, or has not been in the five years prior to such time, retained to represent: (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnities under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto and to be jointly and severally liable therefor.

3.    Indemnity in Third-Party Proceedings. The Company shall be liable to indemnify the Indemnitee in accordance with the provisions of this Section 3 if the Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, the Indemnitee shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe that his conduct was unlawful.

4.    Indemnity in Proceedings by or in the Right of the Company. The Company shall be liable to indemnify the Indemnitee in accordance with the provisions of this Section 4 if the Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant

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to this Section 4, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding (or any claim, issue or matter therein) if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which the Indemnitee shall have been finally adjudged by a court of competent jurisdiction to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnification.

5.    Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the extent that the Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall be liable to indemnify the Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall be liable to indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall be liable to indemnify the Indemnitee against all Expenses reasonably incurred in connection with any claim, issue or matter that is related to any claim, issue, or matter on which the Indemnitee was successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

6.    Indemnification For Other Fees and Expenses.

(a)    Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which the Indemnitee is not a party, the Company shall be liable to indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

(b)    Notwithstanding any other provision of this Agreement, the Company shall be liable to indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in taking any action to enforce any provision of this Agreement, including all Expenses incurred in bringing a claim, counterclaim or cross claim in a legal proceeding, arbitration or otherwise to enforce this Agreement or any provision of this Agreement.

7.    Additional Indemnification

(a)    Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall be liable to indemnify the Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the

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right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnity shall be made under this Section 7(a) on account of the Indemnitee’s conduct which has been adjudicated to constitute a breach of the Indemnitee’s duty of loyalty to the Company or its shareholders or to constitute an act or omission not in good faith or involving intentional misconduct or a knowing violation of the law.

(b)    Notwithstanding any limitation in Sections 3, 4, 5 or 7(a), the Company shall be liable to indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(c)    For purposes of Sections 7(a) and 7(b), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

(1)    to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and

(2)    to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

8.    Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity payment in connection with any claim made against the Indemnitee:

(a)    for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount actually received under any insurance policy or other indemnity provision; or

(b)    for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934 or similar provisions of state statutory law or common law; provided however, that notwithstanding any limitation on the Company’s obligation to provide indemnification set forth in this Section 8(b) or elsewhere, Indemnitee shall be entitled to receive advancement of Expenses hereunder with respect to any such Claim unless and until a court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has violated said statute.

9.    Advancement of Expenses; Defense of Claim.

(a)    Notwithstanding any provision of this Agreement to the contrary, the Company shall be obligated to advance any and all Expenses incurred by the Indemnitee in

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connection with any Proceeding within 30 days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Such advances (i) shall be unsecured and interest free; (ii) shall be made without regard to the Indemnitee’s ability to repay the advances and without regard to the Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement; and (iii) shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advancement of Expenses solely upon the execution and delivery to the Company of an unsecured, unbonded written undertaking providing that the Indemnitee undertakes to repay the advance to the extent and only to the extent that it is ultimately determined that the Indemnitee is not entitled to be indemnified by the Company.

(b)    The Company will be entitled to participate reasonably in the Proceeding at its own expense.

10.    Procedure for Notification and Request for Indemnification.

(a)    To obtain advancement and/or indemnification under this Agreement, the Indemnitee shall, not later than sixty (60) days after receipt by the Indemnitee of notice of the commencement of any Proceeding, except for Proceedings pending as of the date of this Agreement, submit to the Company written notification of the Proceeding, together with any written undertaken required by Section 9(a) above; with regard to Proceedings as of the date of this Agreement, Indemnitee shall submit to the Company written notification not later than sixty (60) days after the date of this Agreement. The omission to notify the Company will relieve the Company of its indemnification obligations under this Agreement only to the extent the Company can establish that such omission to notify resulted in actual prejudice to it, and the omission to notify the Company will, in any event, not relieve the Company from any liability which it may have to indemnify the Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly upon receipt of notification from the Indemnitee pursuant to this Section 10(a), advise the Board in writing that the Indemnitee has provided such notification.

(b)    In order to obtain indemnification under this Agreement, the Indemnitee shall, at any time chosen by the Indemnitee in Indemnitee’s sole discretion, following notification by the Indemnitee of the commencement of any Proceeding pursuant to Section 10(a) of this Agreement and consistent with the time period for the duration of this Agreement as set forth in Section 15 of this Agreement, submit to the Company a written request for indemnification pursuant to this Section 10(b), including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. No determination of the Indemnitee’s entitlement to indemnification shall be made until such written request for a determination is submitted to the Company pursuant to this Section 10(b). The failure to submit a written request to the Company will relieve the Company of its indemnification obligations under this Agreement only to the extent the Company can establish that such failure to make a written request resulted in actual prejudice to it, and the failure to make a written request will not relieve the Company from any liability which it may have to

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indemnify the Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification. Upon submission of a written request for indemnification by the Indemnitee pursuant to this Section 10(b), the Indemnitee’s entitlement to indemnification shall be determined according to Section 11 of this Agreement.

11.    Procedure Upon Application for Indemnification.

(a)    Upon receipt of the Indemnitee’s written request for indemnification pursuant to Section 10(b), a determination with respect thereto shall be made in the specific case: (i) by the Disinterested Directors, even though less than a quorum, so long as the Indemnitee does not request that such determination be made by Independent Counsel; or (ii) if so requested by the Indemnitee, in his sole discretion, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee; and if it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten (10) days after such determination. The Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating with the Disinterested Directors or Independent Counsel, as the case may be, making such determination shall be advanced and borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company is liable to indemnify and hold the Indemnitee harmless therefrom.

(b)    In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as provided in this Section 11(b). The Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection by made by the Board, in which event the Board shall make such selection on behalf of the Company, subject to the remaining provisions of this Section 11(b)), and the Indemnitee or the Company, as the case may be, shall give written notice to the other, advising it or him of the identity of the Independent Counsel so selected. The Company or the Indemnitee, as the case may be, may, within 10 days after such written notice of selection shall have been received, deliver to the Indemnitee or the Company, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit. If, within 20 days after submission by the Indemnitee of a written request for indemnification pursuant to Section 10(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or the Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or the Indemnitee to the other’s selection of

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Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

12.    Presumptions and Effect of Certain Proceedings.

(a)    In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a notice and a request for indemnification in accordance with Section 10 of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by the Board) or of Independent Counsel to have made a determination prior to the commencement of any judicial proceeding or arbitration pursuant to this Agreement that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by the Board) or by Independent Counsel that the Indemnitee has not met such applicable standard of conduct, shall be admissible in evidence against the Indemnitee or otherwise referred to in any such judicial proceeding or arbitration for any purpose (including without limitation to rebut the presumption in favor of indemnification) or create a presumption that the Indemnitee has not met the applicable standard of conduct.

(b)    If the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether the Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the Indemnitee’s written request for indemnification pursuant to Section 10(b) of this Agreement, the requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Independent Counsel making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

(c)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful.

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(d)    Reliance as Safe Harbor. For purposes of any determination of good faith, the Indemnitee shall be deemed to have acted in good faith if the Indemnitee’s action or failure to act is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to the Indemnitee by the other officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

(e)    Actions of Others. The knowledge and/or actions, or failure to act, of any other director, partner, managing member, officer, agent, employee or trustee of the Enterprise shall not be imputed to the Indemnitee for purposes of determining his right to indemnification under this Agreement.

13.    Remedies of the Indemnitee.

(a)    In the event that (i) a determination is made pursuant to Section 11 of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) payment of indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (iv) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten (10) days after a determination has been made that the Indemnitee is entitled to indemnification, or (v) the Indemnitee determines in its sole discretion that such action is appropriate or desirable, the Indemnitee shall be entitled to seek an adjudication by a court of competent jurisdiction as to his entitlement to such indemnification or advancement of Expenses. Alternatively, the Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose the Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)    In the event that a determination shall have been made pursuant to Section 11(a) of this Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration, commenced pursuant to this Section 13, shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and the Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 13, the Company shall have the burden of proving the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 11(a) adverse to the Indemnitee for purposes of satisfying the Company’s burden of proof or for any other purpose. In any judicial proceeding or arbitration commenced pursuant to this Section 13, in the event that the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether the Indemnitee is entitled to indemnification has not made such a determination within the time period provided for under Section 12(b) of this Agreement, the Company shall stipulate and may not contest that the Indemnitee acted in

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good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or Proceeding, had no reasonable cause to believe his conduct was unlawful.

(c)    If a determination shall have been made pursuant to Section 11(a) of this Agreement that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d)    In the event that the Indemnitee is a party to a judicial proceeding or arbitration pursuant to this Section 13 concerning his rights under, or to recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in said judicial adjudication or arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Indemnitee shall be entitled to recover from the Company (who shall be liable therefor), and shall be indemnified by the Company against, any and all Expenses reasonably incurred by the Indemnitee in connection with such judicial adjudication or arbitration.

(e)    The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. The Company shall be liable to indemnify the Indemnitee against any and all Expenses and, if requested by the Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance such Expenses to the Indemnitee that are incurred by Indemnitee in connection with any judicial adjudication or arbitration involving the Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

14.    Non-exclusivity; Survival of Rights; Insurance.

(a)    The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Company’s or any other Enterprise’s Articles of Incorporation, the Company’s or any other Enterprise’s Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect to any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater

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indemnification or advancement of Expenses than would be afforded currently under the Company’s or any other Enterprise’s Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)    To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, partners, managing members, officers, employees, agents or trustees of the Company or of any other Enterprise, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, partner, managing member, officer, employee, agent or trustee under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to Section 10(a) hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c)    The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and only to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(d)    The Company’s obligation hereunder to indemnify, or advance Expenses to, the Indemnitee who was, is or will be serving as a director, partner, managing member, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount the Indemnitee has actually received as indemnification or advancement of Expenses from such other Enterprise.

15.    Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) 10 years after the date that the Indemnitee shall have ceased to serve as a director of the Company or as a director, partner, managing member, officer, employee, agent or trustee of any other Enterprise; or (b) 1 year after the final termination (i) of any Proceeding (including any rights of appeal) then pending in respect of which the Indemnitee requests indemnification or advancement of Expenses hereunder and (ii) of any judicial proceeding or arbitration pursuant to Section 13 of this Agreement (including any rights of appeal) involving the Indemnitee. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnitee and his heirs, executors and administrators.

16.    Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal

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or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

17.    Enforcement.

(a)    The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce the Indemnitee to continue to serve as a director of the Company, and the Company acknowledges that the Indemnitee is relying upon this Agreement in serving as a director of the Company.

(b)    This Agreement constitutes the entire agreement between the parties hereto with respect to the subject hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

18.    Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a wavier of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

19.    Notice by the Indemnitee. The Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of the Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

20.    Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a)    If to the Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as the Indemnitee shall provide in writing to the Company,

(b)    If to the Company to:

Green Mountain Coffee Roasters, Inc.

33 Coffee Lane

Waterbury, Vermont 05676

Attn: Corporate General Counsel

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or to any other address as may have been furnished to the Indemnitee in writing by the Company.

21.    Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to the Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying the Indemnitee, shall contribute to the amount incurred by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion in order to reflect (i) the relative benefits received by the Company and the Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officer, employees and agents) and the Indemnitee in connection with such event(s) and/or transaction(s).

22.    Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by the Indemnitee pursuant to Section 13(a) of this Agreement, the Company and the Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not a resident of the State of Delaware, irrevocably [RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801] as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

23.    Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

24.    Miscellaneous. Use of the masculine pronoun shall been deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

[remainder of page intentionally left blank]

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

Company:	Green Mountain Coffee Roasters, Inc.
	By:
	Name: Larry Blanford
	Title: President and Chief Executive Officer
Indemnitee:
	Name: [                    ]

[Signature Page to Indemnification Agreement]

EX-10.32

Exhibit 10.32

LJVH S.à.r.l,

FONDS DE SOLIDARITÉ DES TRAVAILLEURS DU QUÉBEC (F.T.Q.),

THE PERSONS

LISTED IN EXHIBIT 1.1

ATTACHED HERETO,

collectively as Sellers,

LJ COFFEE AGENT, LLC,

as Agent,

SSR ACQUISITION CORP.,

as Purchaser

AND

GREEN MOUNTAIN COFFEE ROASTERS, INC.,

as Parent

SHARE PURCHASE AGREEMENT

Dated as of September 14, 2010

STIKEMAN ELLIOTT LLP

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION		1
1.1	Defined Terms.	1
1.2	Other Defined Terms.	12
1.3	Headings, etc.	14
1.4	Currency.	14
1.5	Time Reference.	14
1.6	Certain Expressions, Etc.	14
1.7	Knowledge.	14
1.8	Accounting Terms.	15
1.9	Incorporation of Exhibits.	15
ARTICLE 2 PURCHASED SHARES AND PURCHASE PRICE		15
2.1	Purchase and Sale.	15
2.2	Purchase Price.	15
2.3	Payments at Closing.	15
2.4	Adjustment of Purchase Price.	16
2.5	Repayment of Indebtedness.	19
2.6	Exercise of Options by Optionholders.	19
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS		20
3.1	Representations and Warranties of FSTQ as to Itself.	20
3.2	Representations and Warranties of Luxco as to Itself.	21
3.3	Representations and Warranties of Management Sellers as to Themselves.	22
3.4	Representations and Warranties of Sellers as to the LJVH Group Members.	24
3.5	Disclaimer of Sellers.	42
3.6	Disclosure Letter.	42
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT		43
4.1	Representations and Warranties of Purchaser and Parent.	43
ARTICLE 5 PRE-CLOSING COVENANTS OF THE PARTIES		44
5.1	Seller Pre-Closing Reorganization.	44
5.2	Purchaser Pre-Closing Reorganization.	45
5.3	Conduct of Business Prior to Closing.	46
5.4	Notice of Untrue Representation or Warranty.	48
5.5	Access.	49
5.6	Confidentiality.	49
5.7	Filings and Authorizations.	49
5.8	Financing Capacity.	50
5.9	Cooperation in Securing Financing.	51
5.10	Exclusive Dealing; No Transfer or Encumbrance.	51
5.11	Financial Statements.	52
5.12	Waiver and Release.	52
5.13	Other Covenants.	53
ARTICLE 6 CONDITIONS OF CLOSING		53

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6.1	Conditions of Closing.	53
6.2	Conditions for the Benefit of Purchaser.	53
6.3	Termination by Purchaser.	55
6.4	Conditions for the Benefit of Sellers.	57
6.5	Termination by Agent.	58
6.6	Reverse Termination Fee.	60
ARTICLE 7 CLOSING		60
7.1	Date, Time and Place of Closing.	60
ARTICLE 8 POST-CLOSING COVENANTS		60
8.1	Books and Records.	60
8.2	Further Assurances.	60
8.3	Tax Matters.	61
8.4	Bump Covenants and Representation.	63
8.5	Tail Insurance.	65
8.6	Confidentiality.	66
8.7	Non-Solicitation.	66
8.8	Bonus Payments.	66
ARTICLE 9 INDEMNIFICATION		67
9.1	Survival of Representations and Warranties.	67
9.2	Indemnification in favour of Purchaser Indemnified Parties by Sellers.	67
9.3	Indemnification in favour of Sellers.	67
9.4	Time Limitations.	67
9.5	Limitation on Damages.	68
9.6	Processing claims for Damages; Tax Fund.	70
9.7	Indemnification Matters.	71
9.8	Notification.	71
9.9	Defense of Third Party Claim.	71
9.10	Payments.	72
9.11	Remedies.	73
9.12	No Circular Recovery.	74
9.13	Carriage of Tax Matters.	74
ARTICLE 10 MISCELLANEOUS		75
10.1	Notices.	75
10.2	Time of the Essence.	76
10.3	Announcements.	76
10.4	Third Party Beneficiaries.	76
10.5	Expenses.	76
10.6	Appointment of Agent.	77
10.7	Solidarity.	78
10.8	Amendments.	78
10.9	Waiver.	78
10.10	Non-Merger.	78
10.11	Entire Agreement.	78
10.12	Successors and Assigns.	79

ii

10.13	Assignment.	79
10.14	Severability.	79
10.15	Governing Law.	79
10.16	Counterparts.	80
10.17	Language.	80

EXHIBITS

Exhibit 1.1	Management Sellers
Exhibit 1.1(hh)	Escrow Agreement
Exhibit 1.1(llll)	Working Capital
Exhibit 1.7	Knowledge
Exhibit 5.8	Financing Terms

iii

SHARE PURCHASE AGREEMENT

Share Purchase Agreement dated September 14, 2010 among LJVH S.à.r.l., an entity governed by the laws of Luxembourg (“Luxco”), Fonds de solidarité des travailleurs du Québec (F.T.Q.) (“FSTQ”), the persons listed in Exhibit 1.1 hereto (such listed persons being hereinafter collectively referred to as “Management Sellers” and, together with Luxco and FSTQ, “Sellers”), LJ Coffee Agent, LLC, a limited liability company governed by the laws of the State of Delaware (“Agent”), SSR Acquisition Corp., a corporation governed by the laws of the Province of New Brunswick (“Purchaser”) and Green Mountain Coffee Roasters, Inc., a corporation governed by the laws of the State of Delaware (“Parent”).

WHEREAS, immediately prior to Closing (as defined hereafter), Sellers will own all of the issued and outstanding shares in the capital of Corporation (as defined hereafter); and

WHEREAS, Sellers wish to sell to Purchaser, and Purchaser wishes to purchase from Sellers, the Purchased Shares (as defined hereafter), upon the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, Sellers and Purchaser hereby agree as follows:

ARTICLE 1

INTERPRETATION

1.1 Defined Terms.

As used in this Agreement, the following terms have the following meanings:

(a) “Adjustment Time” means the close of business on the Business Day immediately preceding the Closing Date, as if all transactions contemplated herein to occur at or prior to Closing have occurred prior to the Adjustment Time.

(b) “Advance Ruling Certificate” means an advance ruling certificate issued by the Commissioner pursuant to Section 102 of the Competition Act.

(c) “Affiliate” has the meaning ascribed thereto in National Instrument 45-106 - Prospectus and Registration Exemptions, as in force on the date hereof.

(d) “Agent and Indemnity Agreement” means the agreement among Agent and Sellers, LJVH Investment ULC and LJVH Investment L.P. dated on or before the date hereof pursuant to which each Seller and each of LJVH Investment ULC and LJVH Investment L.P. grants Agent an irrevocable mandate to act as each such Person’s agent with respect to the Escrow Agreement and this Agreement and all matters contemplated hereby and thereby.

(e) “Agent” has the meaning set out in the initial description of the Parties.

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(f) “Agreement” means this Share Purchase Agreement and all schedules, exhibits and instruments in amendment or confirmation of it; and the expressions “Article” and “Section” followed by a number mean and refer to the specified Article or Section of this Agreement.

(g) “Allocable Portion” means, in respect of a Seller, the quotient (expressed as a percentage) obtained by dividing the portion of the Purchase Price to which such Seller is entitled by the aggregate Purchase Price for the Purchased Shares (all of which will not take into account any Optionee Withholding Amount).

(h) “Amalco Entities” has the meaning ascribed thereto in Schedule 1.1(fff) of the Disclosure Letter.

(i) “Authorization” means, with respect to any Person, any order, permit, approval, waiver, license or similar authorization of any Governmental Entity having jurisdiction over the Person.

(j) “Books and Records” means all statements, budgets, books of account, Tax and financial records, sales and purchase records, customer and supplier lists, business reports, plans and projections and all other documents, files, correspondence and other information relating to the LJVH Group Members, whether in writing or electronic form and in the possession of LJVH Group Members.

(k) “Business” means the business and operations presently conducted in the aggregate by the LJVH Group Members.

(l) “Business Day” means any day other than a Saturday, Sunday or other day on which the principal commercial banks in Montreal, Québec and New York, New York are not open for business during normal business hours.

(m) “Canadian GAAP” means, at any time, generally accepted accounting principles in Canada including those set out in the Handbook of the Canadian Institute of Chartered Accountants, in force at the relevant time.

(n) “Cash” means the sum of all cash and cash equivalents, on a consolidated basis, determined in accordance with Canadian GAAP.

(o) “Claim” means any claim, action, cause of action, suit, litigation, arbitration, investigation, audit, assessment, complaint, demand or other legal proceeding (whether sounding in contract, tort or otherwise, whether civil or criminal, and whether brought at law or in equity) that is commenced, brought, conducted, tried or heard by or before, or otherwise involving, any Governmental Entity.

(p) “Closing” means the completion, on the Closing Date at the Effective Time, of the transactions of purchase and sale contemplated in this Agreement.

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(q) “Closing Date” means two (2) Business Days following the date on which all of the conditions to closing set out in Article 6 have been met or waived or such other date as Purchaser and Agent may agree to in writing.

(r) “Closing Indebtedness and Cash Statement” means a statement to be delivered by Agent to Purchaser within three (3) Business Days prior to the Closing Date setting out (i) the Indebtedness of Corporation that is to be repaid at Closing, (ii) the Indebtedness of Corporation that is not to be repaid at Closing, and (iii) the Cash of Corporation, in each case on a consolidated basis as at the Adjustment Time (ignoring any payment on the Closing Date pursuant to Sections 2.3(d) and 2.5) which shall be based, with respect to Indebtedness owed to third party creditors that is to be repaid immediately prior to Closing, on signed pay-out letters obtained from such third party creditors.

(s) “Closing Tax Amount” means the net aggregate amount, if any, by which the Taxes (other than Taxes arising out of the Tax Audit Claims and sales Taxes to the extent recoverable by the relevant LJVH Group Member in the Ordinary Course) of each of the LJVH Group Members determined as of Closing for all Pre-Closing Tax Periods for which (A) the relevant Tax Return is not yet due and/or (B) relevant Taxes are not yet due and payable, exceeds the Taxes paid (through instalments or otherwise) by the LJVH Group Members prior to Closing in respect of such Pre-Closing Tax Periods.

(t) “Coffee Futures Contracts” means the futures and other contracts entered into by Corporation or any LJVH Group Member related to the purchase of coffee beans, listed in Schedule 1.1(t) of the Disclosure Letter, as well as any such contracts entered into during the Interim Period in compliance with Section 5.3.

(u) “Commissioner” means the Commissioner of Competition appointed pursuant to the Competition Act and includes a person authorized to exercise the powers and perform the duties of the Commissioner.

(v) “Competition Act” means the Competition Act (Canada), as amended.

(w) “Competition Act Approval” means:

(i) the issuance of an Advance Ruling Certificate in respect of the transactions contemplated by this Agreement and such Advance Ruling Certificate has not been rescinded prior to Closing; or

(ii) the waiting period under Section 123 of the Competition Act has expired, been terminated or waived in accordance with the Competition Act and Purchaser has been advised in writing by the Commissioner that the Commissioner is of the view, at that time, that sufficient grounds do not exist to initiate proceedings before the Competition Tribunal under the merger provisions of the Competition Act with respect to the transactions contemplated by this Agreement (“no-action letter”) and such advice has not been rescinded prior to Closing.

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(x) “Contingent Purchase Price Amounts” means the obligations of Corporation or any other LJVH Group Member for the purchase price of property listed in Schedule 1.1(x) of the Disclosure Letter, the payment of which is contingent upon the occurrence of certain events after the Closing Date, other than the simple passage of time.

(y) “Contracts” means, in respect of any of the LJVH Group Members, all oral or written contracts, deeds, mortgages, licenses, undertakings, agreements, leases of real or personal property, incentives, commitments and orders made by or in favour of the LJVH Group Members, including the Material Contracts.

(z) “Corporation” means LJVH Holdings Inc., a corporation governed by the laws of British Columbia, and, upon completion of the Seller Pre-Closing Reorganization, the corporation resulting from the amalgamation of LJVH Holdings Inc., LJVH Investment ULC (or any successor thereto), LJVH Investment GP ULC (or any successor thereto), Van Houtte Group Inc. and Van Houtte Coffee Filterfresh Holdings Inc. under the name of LJVH Holdings Inc., a corporation governed by the laws of New Brunswick.

(aa) “Damages” means any loss, Liability, damage, penalty, fine, Excess Third Party Expense, assessment, order, amount paid in settlement, Tax, fee, cost or expense (whether or not involving a third-party claim) including reasonable legal and expert expenses.

(bb) “Disclosure Letter” means the letter of disclosure dated the date hereof and signed by Sellers and delivered to Purchaser and Parent.

(cc) “Effective Time” means 9:00 am on the Closing Date or such other time as Purchaser and Agent may agree to in writing.

(dd) “Environmental Laws” means all applicable Laws and agreements with Governmental Entities relating to public health, occupational health and safety or the protection of the environment and all Authorizations issued pursuant to such Laws or agreements.

(ee) “Environmental Schedules” means Schedules 3.4(l)(i) and 3.4(l)(ii) of the Disclosure Letter.

(ff) “ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.

(gg) “Escrow Agent” means Computershare Trust Company of Canada or such other person as may be appointed in replacement thereof pursuant to the terms of the Escrow Agreement.

(hh) “Escrow Agreement” means the escrow agreement dated as of the Closing Date between Purchaser, Agent and the Escrow Agent substantially in the form attached in Exhibit 1.1(hh).

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(ii) “Final Decision” means a determination or decision by the relevant Governmental Entities to the effect that Competition Act Approval, ICA Approval or HSR Clearance, as the case may be, will not be obtained or given, including any determination or decision to commence proceedings opposing or challenging, in whole or in part, the transactions contemplated by this Agreement.

(jj) “Financial Statements” means (i) the audited consolidated financial statements of Corporation as of and for the years ended April 3, 2010 and March 28, 2009 (as presented in the audit dated April 3, 2010) and as of and for the 254-day period ended on March 29, 2008 and (ii) the unaudited consolidated financial statements of Corporation as of and for the quarter ended July 24, 2010, copies of which are annexed hereto as Schedule 1.1(jj) of the Disclosure Letter.

(kk) “Foreign Exchange Agreements” means the foreign exchange agreements entered into by Corporation or any LJVH Group Member listed in Schedule 1.1(kk) of the Disclosure Letter, as well as any such agreements entered into during the Interim Period in compliance with Section 5.3.

(ll) “FSTQ Controlled Portfolio Corporation” means a corporation (a) which carries on active business operations, (b) which is related (within the meaning and as used for the purposes of the ITA) to or which is an Affiliate of FSTQ, and (c) which is managed autonomously from FSTQ and over which FSTQ does not exercise any operational control.

(mm) “FSTQ Non-Controlled Portfolio Corporation” means a corporation (a) which carries on active business operations, (b) which deals not at arm’s length with FSTQ (within the meaning of the ITA) solely as a result of a right described in paragraph 251(5)(b) of the ITA, and (c) which is managed autonomously from FSTQ and over which FSTQ does not exercise any operational control.

(nn) “FSTQ Portfolio Corporation” means an FSTQ Controlled Portfolio Corporation or an FSTQ Non-Controlled Portfolio Corporation.

(oo) “Fundamental Representations” means, collectively, the representations and warranties in Sections 3.1 (other than those in Section 3.1(d) and 3.1(f)), 3.2 (other than those in Section 3.2(d)), 3.3 (other than those in Section 3.3(c) and 3.3(e)), 3.4(a) (Incorporation and Qualification), 3.4(b) (Seller Pre-Closing Reorganization), 3.4(e) (No Other Agreement to Purchase), 3.4(r) (Authorized and Issued Capital), 3.4(t) (Title to the LJVH Group Member Securities) and 3.4(x) (No Brokers).

(pp) “Governmental Entity” means any (i) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, ministry, central bank, court, tribunal, arbitral body, commission, commissioner, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision, agent or authority of any of the above or (iii) any quasi governmental or private body, including any tribunal, commission, regulatory

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agency or self-regulatory organization, exercising any regulatory, arbitral, expropriation or taxing authority under or for the account of any of the above.

(qq) “Hazardous Substances” means any substance, material or waste, chemical, pollutant, contaminant or constituent, including petroleum and any fraction thereof, asbestos or asbestos containing materials that is prohibited, listed, defined, designated or classified as, or otherwise determined to be, dangerous, hazardous, radioactive, explosive or toxic or a pollutant or a contaminant under or pursuant to any Environmental Laws.

(rr) “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, together with all rules and regulations promulgated thereunder.

(ss) “HSR Clearance” means that all applicable waiting periods and clearances pursuant to the HSR Act shall have unconditionally expired, been terminated or been obtained.

(tt) “ICA Approval” means written evidence received by Purchaser from the responsible Minister under the Investment Canada Act that the Minister is satisfied or deemed to be satisfied that the transactions contemplated by this Agreement are likely to be of net benefit to Canada pursuant to the Investment Canada Act.

(uu) “Indebtedness” means, in the aggregate and without duplication, with respect to Corporation:

(i) the sum of all indebtedness (a) for borrowed money, including any related prepayment fees or expenses (including overdraft facilities) (whether short term or long term) or any loans from shareholders, (b) for the deferred purchase price of property, (c) evidenced by notes, bonds, debentures or other similar instruments, (d) arising under capitalized leases, conditional sales contracts and other similar title retention instruments listed as such on the Financial Statements, (e) for amounts drawn in respect of letters of credit and bankers’ acceptances, other than instruments supporting or guaranteeing any obligations of Corporation, (f) arising under any interest rate or currency swap or other interest rate or currency protection agreement or other similar interest rate or currency agreement, (g) under loans due to any related party (within the meaning of the ITA), including any shareholder, (h) all indebtedness of others referred to in paragraphs (a) through (g) above guaranteed by Corporation, (i) any declared dividend not paid by Corporation as at the Closing Date, (j) all accrued interest, fees, prepayment, penalties or other similar obligations with respect to any of the foregoing, (k) the amount of any accrued and unpaid bonus for services provided to any LJVH Group Member prior to Closing determined in accordance with Canadian GAAP consistent with past practice (collectively, the “Accrued Bonuses”) and (l) relating to the Foreign Exchange Agreements (the “Terminating Foreign

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Exchange Agreements”) for which the counterparty thereto has not consented to the transactions contemplated by this Agreement, to the extent such consent is required, less

(ii) the sum of all assets or benefits (other than assets or benefits relating to Taxes) arising under any interest rate or currency swap or other interest rate or currency protection agreement or other similar interest rate or currency agreement, including any Terminating Foreign Exchange Agreement, and

(iii) specifically excluding all obligations relating to (1) the Specified Cash Expenditures which have been committed prior to Closing but not yet paid as at Closing; (2) the Contingent Purchase Price Amounts; (3) the Coffee Futures Contracts; (4) the Foreign Exchange Agreements other than a Terminating Foreign Exchange Agreement; (5) amounts due to Jean-Yves Monette pursuant to his consulting agreement and amounts due to Gérard Geoffrion and Marc Fortier under the Supplemental Executive Retirement Plan of Corporation; and (6) all retirement programs,

in each case on a consolidated basis.

(vv) “Indemnifiable Taxes” means, without duplication, (i) all Taxes of LJVH Group Members for Pre-Closing Tax Periods, (ii) any breach of the representations and warranties set forth in Section 3.4(w) (Tax Matters) (in each case, with respect to the calculation of Damages for a breach of such representation or warranty, any reference therein to qualifications as to materiality, including any reference to the defined term “Material Adverse Effect”, shall be read as if such references were deleted therefrom, but not with respect to determining whether a particular breach has occurred), (iii) any breach or violation of any covenant of any Seller relating to Taxes in this Agreement (which includes, for the avoidance of doubt, all covenants in Sections 5.13, 8.3 and 8.4), (iv) any Taxes attributable to any Subpart F Income (as described in the Code) arising from actions or events occurring on or before the Closing Date, and (v) any Taxes attributable to any foreign accrual property income (as defined in the ITA) arising from actions or events occurring before Closing, (vi) the Tax Audit Claims, (vii) any Liability of the Purchaser to pay an amount under Section 116(5) of the ITA or Section 1101 of the Taxation Act (Quebec) as a result of the acquisition of the Purchased Shares by the Purchaser, and (viii) any Taxes of any other Person imposed on any LJVH Group Members as a result of being a member of an affiliated, consolidated, unitary or similar group prior to the Closing Date, or as a transferee or successor, by contract or otherwise, but excluding (a) Taxes to the extent taken into account in calculating the Closing Tax Adjustment, (b) Taxes resulting from a Purchaser Pre-Closing Reorganization, (c) Taxes due to actions by Purchaser, Parent or LJVH Group Members after the Closing on the Closing Date, and (d) Damages resulting from any breach of the representation and warranty set forth in Section 3.4(g)(ii)(H).

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(ww) “Individual Representations, Warranties and Covenants” means, collectively, the representations, warranties, covenants and agreements of Sellers made in Article 2, Sections 3.1, 3.2 and 3.3 and 8.4.

(xx) “Intellectual Property” means, all forms of intellectual property, however denominated, throughout the world, including, without limitation, any trademarks, trade names, business names, brand names, service marks, logos, and domain names, and goodwill associated with each of the foregoing, computer software and computer programs (other than standard off-the-shelf software), copyrights, all moral rights related thereto, rights of privacy and publicity, designs, inventions and patents, trade secrets and proprietary information, recipes, formulae, processes, know-how and technology, whether domestic or foreign, registered or unregistered, as well as any applications, continuations, continuations in part, divisional applications or analogous rights therefor.

(yy) “Interim Period” means the period from the date hereof and ending on Closing.

(zz) “Investment Canada Act” means the Investment Canada Act (Canada), as amended from time to time.

(aaa) “ITA” means the Income Tax Act (Canada) and the regulations promulgated thereunder, as amended from time to time.

(bbb) “Laws” means all constitutions, treaties, laws, statutes, codes, ordinances, orders, decrees, orders-in-council, rules, regulations, by-laws, statutory rules, judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, decisions, rulings and awards, terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity or self regulatory authority and any provisions of the foregoing, including general principles of common and civil law and equity.

(ccc) “Liability” means, with respect to any Person, any liability or obligation of such Person whether known or unknown, whether asserted or unasserted, whether determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether due or to become due and whether or not required under applicable GAAP to be accrued on the financial statements of such Person.

(ddd) “Lien” means any mortgage, charge, pledge, hypothec, security interest, assignment, lien (statutory or otherwise), conditional sales contract or other title retention agreement or arrangement, trust deed, assignment by way of security, restrictive covenant or other encumbrance or similar interest or instrument of any nature whatsoever, and however arising, or any other arrangement or condition which, in substance, secures payment or performance of an obligation.

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(eee) “LJ Services Agreement” means the Amended and Restated Management Services and Fee Agreement dated April 29, 2009 between Van Houtte USA Holdings Inc. and Littlejohn & Co., L.L.C.

(fff) “LJVH Group Members” means the Persons listed in Schedule 1.1(fff) of the Disclosure Letter.

(ggg) “LJVH Group Member Securities” means all of the issued and outstanding securities in the capital of all LJVH Group Members except Corporation, as set out in Schedule 1.1(ggg) of the Disclosure Letter.

(hhh) “Management Sellers” has the meaning set out in the initial description of the Parties.

(iii) “Material Adverse Effect” means a fact, circumstance or condition that (a) has, or is reasonably likely to have, individually or in the aggregate, a material adverse effect on the business, operations, assets, liabilities or financial condition of the LJVH Group Members, taken as a whole; except to the extent that the material adverse effect results from or is caused by (i) worldwide, national or local conditions or circumstances, whether they are economic, political, regulatory (including any change in Law or Canadian GAAP) or otherwise, including war, armed hostilities, acts of terrorism, emergencies, crises and natural disasters, (ii) changes in the markets or industry in which LJVH Group Members operate, (iii) the announcement of the execution of this Agreement and the transactions contemplated hereby, (iv) the loss of any customer, vendor or distributor (other than Parent and its Affiliates) following the announcement of this Agreement and the transactions contemplated hereby, (v) any breach by Parent or one of its Affiliates of its obligations pursuant to any Contract set forth in Schedule 1.1(iii) of the Disclosure Letter, and (vi) any act or omission of Corporation prior to the Closing Date taken with the prior consent or at the request of Purchaser, except, with respect to clauses (i) and (ii), conditions, circumstances or changes that have a materially disproportionate effect on LJVH Group Members relative to comparable companies and entities operating in the coffee industry or coffee services business in the United States or Canada, as the case may be, or (b) impairs in any material and adverse respect the ability of Sellers to complete the transactions of purchase and sale of the Purchased Shares contemplated hereunder in accordance with the terms and conditions set out in this Agreement.

(jjj) “Net Indebtedness” means an amount equal to the amount of Indebtedness minus the amount of Cash as reflected on the Closing Indebtedness and Cash Statement, the Draft Statements and the Final Statements, as applicable.

(kkk) “Non-Resident Management Sellers” means the Persons listed in Schedule 3.3(e) of the Disclosure Letter.

(lll) “Notes” means the subordinated promissory notes issued by the Corporation to LJVH Investment L.P.

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(mmm) “Option Plan” means the “Omnibus Stock Incentive Plan For Employees” of Corporation, as amended and in effect.

(nnn) “Optionee Withholding Amount” means the sum of (i) the amount required to be withheld by Corporation in respect of the exercise of the Options by the Optionholders as described in Section 2.6 and (ii) the aggregate amount payable by the Optionholders to Corporation in order to repay the indebtedness (collectively, the “Option Loans”) incurred by the Optionholders in connection with the exercise of the Options.

(ooo) “Optionholders” means the Persons listed as Optionholders in Exhibit 1.1.

(ppp) “Options” means each outstanding, unexpired, unexercised option and award of the right to purchase one or more shares in the capital of Corporation held by an Optionholder, whether or not then vested or exercisable.

(qqq) “Ordinary Course” means, with respect to an action taken by a Person, that such action is consistent with the past practices of the Person and is taken in the ordinary course of the normal day-to-day operations of the Person.

(rrr) “Parent” has the meaning set out in the initial description of the Parties.

(sss) “Parties” means Sellers, Purchaser, Agent, Parent and any other Person who may become a party to this Agreement.

(ttt) “Permitted Lien” has the meaning ascribed thereto in Schedule 1.1(ttt) of the Disclosure Letter.

(uuu) “Person” means a natural person, partnership, corporation, joint stock company, trust, unincorporated association, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning.

(vvv) “Pre-Closing Tax Period” means all Tax periods ending on or before the Closing Date, and the portion through the end of the Closing Date for any Straddle Period.

(www) “Post-Closing Tax Periods” means all Tax periods other than Pre-Closing Tax Periods.

(xxx) “Prohibited Property” means: (i) any property owned by Corporation after the amalgamation contemplated in Schedule 5.1 of the Disclosure Letter and immediately prior to Closing (and any property acquired by any Person in substitution therefor); and (ii) any property, other than a property referred to in Sections 8.4(b)(i) or 8.4(b)(ii), the fair market value of which is (A) wholly or partly attributable to any property that was owned by Corporation after the amalgamation contemplated in Schedule 5.1 of the Disclosure Letter and immediately prior to Closing; or (B) determinable primarily by reference to the fair market value of, or to any proceeds of disposition of, any property that was

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owned by Corporation after the amalgamation contemplated in Schedule 5.1 of the Disclosure Letter and immediately prior to Closing.

(yyy) “Purchaser” has the meaning set out in the initial description of the Parties.

(zzz) “Purchaser Financing Group Member” means any lender or prospective lender, note purchaser or prospective note purchaser, lead arranger, arranger, agent or representative of or to Purchaser or Parent or any party to the Financing (other than Purchaser or Parent) or any of the respective former, current, or future Affiliates, stockholders, partners, members, directors, officers, employees, agents or representatives of such Persons.

(aaaa) “Purchaser Fundamental Representations” means the representations and warranties set out in Sections 4.1(a) (Formation and Qualification), 4.1(b) (Validity of Agreement), 4.1(c) (Execution and Binding Obligations) and 4.1(h) (No Brokers).

(bbbb) “Sellers” has the meaning set out in the initial description of the Parties.

(cccc) “Sellers’ Transaction Expenses” means all documented fees and expenses incurred by or on behalf of Sellers, LJVH Group Members and their respective Affiliates in connection with the auction process, this Agreement and the transactions contemplated hereby, and specified in the notice to be provided by Agent to Purchaser prior to Closing pursuant to Section 2.3(e), including, without limitation (i) any fees, costs and expenses of legal counsel, investment bankers, brokers and other representatives and consultants and (ii) any accrued and unpaid fees, costs and expenses due to Littlejohn & Co., L.L.C. and its Affiliates in connection with their management of LJVH Group Members or otherwise payable in connection with Closing (including under the LJ Services Agreement).

(dddd) “Specified Cash Expenditures” means the cash expenditures of Corporation and the LJVH Group Members during fiscal year 2011 for the equipment and fixtures related to the roasting and retail operations, listed in Schedule 1.1(dddd) of the Disclosure Letter.

(eeee) “Straddle Period” means a taxable period that includes but does not end on the Closing Date.

(ffff) “Target Working Capital” means $48,800,000.

(gggg) “Tax” or, collectively, “Taxes” means any and all Canadian federal, state, provincial, municipal, local and foreign (including foreign federal, state, provincial, municipal and local) taxes, assessments, reassessments and other governmental charges, duties, impositions and liabilities, including Canada Pension Plan and Provincial Pension Plan contributions and unemployment insurance contributions and employment insurance contributions and including taxes based upon or measured by gross receipts, income, profits, sales, use,

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capital use and occupation, good and services, and value added, ad valorem, transfer, franchise, withholding, customs duties, payroll, employment, excise and property taxes, including estimated taxes, together with all interest, penalties, fines and additions imposed with respect to such amounts.

(hhhh) “Tax Audit Claims” means any existing and unpaid Claim, or potential Claim which may be made in the future, by the Canada Revenue Agency (or any relevant provincial taxing authority in Canada) with respect to the current audits for which draft or final reassessments have been issued, including without limitation in respect of which any LJVH Group Member has recorded a tax reserve for accounting purposes as disclosed on Schedule 1.1(hhhh) of the Disclosure Letter, items 1, 2, 4 and 6 including any additional assessments, interest and penalties relating thereto.

(iiii) “Tax Return” or, collectively “Tax Returns” means all returns, declarations, reports, statements, information returns, elections, schedule, notice, form or other documents or information in respect of the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of any legal requirement relating to any Tax, and including any amendments thereto.

(jjjj) “Termination Date” means December 31, 2010, as such date may be extended pursuant to Section 6.3(b) or Section 6.5(b) or by mutual consent of Agent and Purchaser.

(kkkk) “Termination Fee” means, with respect to the termination of this Agreement pursuant to Section 6.3(b) or Section 6.5(b) (i) that is effective on or prior to December 31, 2010, $36,600,000 or (ii) that is effective after December 31, 2010, $45,750,000.

(llll) “Working Capital” means, without duplication, with respect to Corporation, an aggregate amount equal to the sum of the current assets minus the sum of the current liabilities identified in Exhibit 1.1(llll), in each case determined on a consolidated basis in accordance with Canadian GAAP, to be calculated in accordance with the methodology set out in such Exhibit.

1.2 Other Defined Terms.

In addition to the defined terms in Section 1.1, each of the following capitalized terms shall have the meaning ascribed thereto in the corresponding Sections:

Term	Section
Accrued Bonuses	1.1(uu)(i)
Agent’s Closing Certificate	6.2(a)
Alternate Financing	5.8
Amalco	8.4(a)

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Term	Section
Benefit Plan	3.4(g)(ii)
Closing Net Working Capital Adjustment	2.4(a)
Closing Tax Adjustment	2.4(b)
Code	8.3(c)
Confidentiality Agreement	5.6
Copyrights	3.4(k)(iii)
Debt Commitment Letters	9.11
Defending Party	9.9(a)
Draft Statements	2.4(b)
Escrow Amount	2.3(c)
Estimated Closing Tax Adjustment	2.4(a)
Excess Third Party Expense	10.5
Final Statements	2.4(e)
Financing	5.8
Financing Terms	5.8
Franchise Agreement Documents	3.4(gg)
General Indemnity Exceptions	9.5(c)
ICA Undertakings	3.4(hh)
Indemnified Party	9.8
Indemnifying Party	9.8
Indemnity Escrow Amount	2.3(c)
Key Shareholder	8.4(b)
Lease Documents	3.4(q)
Leased Properties	3.4(q)
Material Contracts	3.4(o)(i)
Option Loans	1.1(nnn)
Owned Real Properties	3.4(p)
Patents	3.4(k)(ii)
Preliminary Closing Date Net Working Capital Amount	2.4(a)
Preliminary Closing Date Net Working Capital Statement	2.4(a)
Products	3.4(cc)
Prohibited Period	8.4(b)
Properties	3.4(p)
Purchase Price	2.2
Purchased Shares	2.1
Purchaser Indemnified Parties	9.2
Purchaser’s Closing Certificate	6.4(a)
Purchaser Pre-Closing Breach	9.11
Purchaser Pre-Closing Reorganization	5.2(a)(i)
Related Person	8.4(b)
Restricted Person	8.4(c)
Reverse Termination Fee	6.6
Seller Group Member	9.11
Seller Pre-Closing Reorganization	5.1
Taxable Year	3.4(w)(xxii)
Tax Fund	9.5(g)

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Term	Section
Terminating Foreign Exchange Agreements	1.1(uu)(i)
Third Party Auditors	2.4(d)
Third Party Claim	9.9(a)
Third Party Expense	10.5
Trademarks	3.4(k)(i)
Working Capital Escrow Amount	2.3(c)

1.3 Headings, etc.

The provision of a Table of Contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and are not to affect its interpretation.

1.4 Currency.

All references in this Agreement to dollars, unless otherwise specifically indicated, are expressed in Canadian currency.

1.5 Time Reference.

All references in this Agreement to times of the day are to local time in the relevant jurisdiction, unless otherwise indicated.

1.6 Certain Expressions, Etc.

In this Agreement, (i) the words “includes”, “including” and similar expressions mean “include (or including) without limitation”, (ii) the phrases the “aggregate of”, the “total of”, the “sum of” and similar expressions mean the “aggregate (or total or sum), without duplication, of”, (iii) the phrase “made available”, when used in reference to a document, means that the document was (A) delivered or provided to Purchaser or Parent or (B) made available for viewing in the “Project Amsterdam” electronic data room hosted by Intralinks, as that site existed as of 6:00 p.m. Eastern Daylight Time on the date prior to the date of this Agreement, (iv) pronouns in one gender include the other gender, unless the context clearly indicates otherwise, (v) definitions in the singular include the plural, and vice versa, (vi) the words “hereof”, “herein”, “hereunder”, “hereto” and similar expressions refer to this Agreement as a whole and the words “Article”, “Section” or “Exhibit” refer to an Article of, Section of, or Exhibit to this Agreement, unless specified otherwise.

1.7 Knowledge.

Where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge of Sellers, it shall be deemed to refer to the actual knowledge of the Persons listed in Exhibit 1.7, after reasonable investigation.

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1.8 Accounting Terms.

All accounting terms not specifically defined in this Agreement shall be interpreted in accordance with Canadian GAAP, unless otherwise provided.

1.9 Incorporation of Exhibits.

The exhibits attached to this Agreement shall, for all purposes of this Agreement, form an integral part of it.

ARTICLE 2

PURCHASED SHARES AND PURCHASE PRICE

2.1 Purchase and Sale.

Subject to the terms and conditions of this Agreement, on the Closing Date, each Seller shall sell to Purchaser, and Purchaser shall purchase from each Seller, all (but not less than all) of their respective shares in the capital of Corporation as set forth in Part B of Schedule 2.1 of the Disclosure Letter, which shares will constitute at Closing, in the aggregate, all (but not less than all) of the issued and outstanding shares in the capital of Corporation (collectively, the “Purchased Shares”).

2.2 Purchase Price.

Subject to adjustment, if any, in accordance with Section 2.4, the aggregate purchase price hereby payable by Purchaser for the Purchased Shares shall be an amount equal to (a) $915,000,000, minus (b) the Net Indebtedness set forth on the Closing Indebtedness and Cash Statement delivered by Agent, plus or minus, as the case may be, (c) the Closing Net Working Capital Adjustment, minus (d) the Sellers’ Transaction Expenses, minus (e) the Estimated Closing Tax Adjustment (the “Purchase Price”).

2.3 Payments at Closing.

The following payments shall be made by Purchaser at Closing (or, in the case of the payments referenced in (d) below, immediately prior to Closing):

(a) to Agent an amount equal to the Purchase Price minus the Escrow Amount and minus the Optionee Withholding Amount, by way of wire transfer of immediately available funds to an account designated in writing by Agent at least two (2) days prior to the Closing Date;

(b) to the Corporation, on behalf of the Optionholders, the Optionee Withholding Amount;

(c) to the Escrow Agent an amount of $29,450,000 equal to the Indemnity Escrow Amount plus the Working Capital Escrow Amount (collectively, the “Escrow Amount”) by way of wire transfer of immediately available funds to an account designated in writing by the Escrow Agent at least two (2) days prior to the Closing Date, which is comprised of (i) an amount of $27,450,000, to be held by

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the Escrow Agent in accordance with the terms and conditions of the Escrow Agreement, to guarantee the payments of any claims for Damages made by Purchaser pursuant to Article 9 of this Agreement (the “Indemnity Escrow Amount”), and (ii) an amount of $2,000,000 to be held by the Escrow Agent until the final determination of Working Capital, Net Indebtedness and Closing Tax Adjustment pursuant to Section 2.4(e) of this Agreement (the “Working Capital Escrow Amount”), in accordance with the terms and conditions of the Escrow Agreement;

(d) to the Persons indicated in Part A of Schedule 2.5 of the Disclosure Letter, the amounts set out therein, by way of transfer of immediately available funds to accounts designated in writing by Agent at least two (2) days prior to the Closing Date; and

(e) to the Persons indicated by Agent in a written notice to be provided to Purchaser at least three (3) Business Days prior to Closing, the Sellers’ Transaction Expenses, by way of transfer of immediately available funds to accounts designated in writing by Agent in such notice.

Each of Purchaser and Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any Seller, Optionholder or any other Person such amounts as it is required to deduct and withhold with respect to the making of such payment under the ITA, the Code, or any other applicable state, local or foreign Tax Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Based on the representation provided by Sellers in Section 3.4(w)(xix), Purchaser agrees that no amounts shall be withheld from the payment of the Purchase Price pursuant to Section 116 of the ITA or Section 1101 of the Taxation Act (Quebec).

2.4 Adjustment of Purchase Price.

(a) Preliminary Statements. Within three (3) Business Days prior to the Closing Date, Agent shall prepare or cause Corporation’s auditors to prepare and shall deliver to Purchaser (i) a statement (the “Preliminary Closing Date Net Working Capital Statement”) setting forth Corporation’s good faith estimate of the Working Capital, along with a reasonably detailed explanation of the calculation thereof, as of the Adjustment Time (the “Preliminary Closing Date Net Working Capital Amount”), (ii) the Closing Indebtedness and Cash Statement, which shall set forth Corporation’s good faith estimate of the Net Indebtedness of Corporation, along with a reasonably detailed explanation of the calculation thereof, as of the Adjustment Time (ignoring any payments on the Closing Date pursuant to Sections 2.3(d) and 2.5) and (iii) a statement setting forth the Corporation’s good faith estimate of the Closing Tax Amount (the “Estimated Closing Tax Adjustment”). If the Preliminary Closing Date Net Working Capital Amount is greater than the Target Working Capital, the Purchase Price payable at Closing will be increased dollar-for-dollar by the amount of such excess, and if the Preliminary Closing Date Net Working Capital Amount is less than the Target Working Capital, the Purchase Price payable at Closing will be decreased

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dollar-for-dollar by the amount of such shortfall (the “Closing Net Working Capital Adjustment”).

(b) Draft Statements. Within sixty (60) days following the Closing Date, Purchaser shall prepare or cause Corporation’s auditors to prepare and shall deliver to Agent (i) a statement with the determination of the Working Capital, prepared, as of the Adjustment Time, (ii) a statement of Net Indebtedness, prepared as of the Adjustment Time (ignoring any payments on the Closing Date pursuant to Sections 2.3(d) and 2.5) and (iii) a statement with the determination of the Closing Tax Amount (the “Closing Tax Adjustment”) (collectively, the “Draft Statements”).

(c) Objection Period. Within thirty (30) days following delivery of the Draft Statements, Agent shall notify Purchaser in writing if it has any objections to the Draft Statements. The notice of objection must state in reasonable detail the basis of each objection and the approximate amounts in dispute. Sellers shall be deemed to have accepted the Draft Statements if Agent does not notify Purchaser of any objection within such period of thirty (30) days.

(d) Settlement of Dispute. If Agent disputes the Draft Statements in accordance with Section 2.4(c), then Purchaser and Agent will work expeditiously and in good faith in an attempt to resolve such dispute within a further period of thirty (30) days after the date of the notification of such dispute, failing which the dispute may be submitted by Agent or Purchaser for final determination to Deloitte & Touche (New York), or if such firm is unwilling or unable to act, Ernst & Young (New York) (in any such case, the “Third Party Auditors”). Purchaser and Agent shall use commercially reasonable efforts to cause the Third Party Auditors to complete their work within thirty (30) days of their engagement. The Third Party Auditors shall allow each of Purchaser and Agent to present their respective positions regarding the Draft Statements and the determination of Working Capital and Net Indebtedness as of the Adjustment Time and the Closing Tax Adjustment, and each of Purchaser and Agent shall have the right to present additional documents, materials and other information, and make an oral presentation to the Third Party Auditors regarding the dispute. The Third Party Auditors shall consider such additional documents, materials and other information and such oral presentations. Any such other documents, materials or other information shall be copied to each of Purchaser and Agent and each of Purchaser and Agent shall be entitled to attend any such oral presentation, and to reply thereto. The Third Party Auditors may not assign a value to any item greater than the greatest value for such item claimed by Purchaser or Agent, as the case may be, or less than the least value for such item claimed by Purchaser or Agent, as the case may be.

(e) Final Determination. Promptly following the thirty (30) day period referred to in Section 2.4(c) during which no notice of objection was given or the resolution of any dispute in accordance with Section 2.4(d), as the case may be, Purchaser shall deliver to Agent the final closing date balance sheet, a final statement of Working

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Capital, a final statement of Net Indebtedness and a final statement of the Closing Tax Adjustment (collectively, the “Final Statements”) together with Corporation’s auditors’ report thereon. The Final Statements shall reflect the resolution of any dispute in accordance with Section 2.4(d) or, if Corporation’s auditors are unable or unwilling to reflect such resolution, then the Final Statements shall be deemed to be amended to reflect such resolution. The Final Statements shall be final and binding upon the Parties upon delivery thereof and shall not be subject to appeal, absent manifest error.

(f) Payment of Adjustment to Purchase Price.

(i) If (A) the Working Capital set forth in the Final Statements is equal to the Preliminary Closing Date Net Working Capital Amount set forth in the Preliminary Closing Date Net Working Capital Statement, (B) the Net Indebtedness set forth in the Final Statements is equal to the Net Indebtedness set forth in the Closing Indebtedness and Cash Statement and (C) the Closing Tax Adjustment set forth in the Final Statements is equal to the Estimated Closing Tax Adjustment, then no further adjustment will be made to the Purchase Price.

(ii) If the Working Capital set forth in the Final Statements is greater than the Preliminary Closing Date Net Working Capital Amount set forth in the Preliminary Closing Date Net Working Capital Statement, then Purchaser shall owe an amount equal to such excess to Sellers. If the Working Capital set forth in the Final Statements is less than the Preliminary Closing Date Net Working Capital Amount set forth on the Preliminary Closing Date Net Working Capital Statement, then Sellers shall owe an amount equal to such shortfall to Purchaser.

(iii) If the Net Indebtedness set forth in the Closing Indebtedness and Cash Statement is greater than the Net Indebtedness set forth in the Final Statements, then Purchaser shall owe an amount equal to such excess to Sellers. If the Net Indebtedness set forth in the Final Statements is greater than the Net Indebtedness set forth in the Closing Indebtedness and Cash Statement, then Sellers shall owe an amount equal to such excess to Purchaser.

(iv) If the Closing Tax Adjustment set forth in the Final Statements is greater than the Estimated Closing Tax Adjustment, then Sellers shall owe an amount equal to such excess to Purchaser. If the Closing Tax Adjustment set forth in the Final Statements is less than the Estimated Closing Tax Adjustment, then Purchaser shall owe an amount equal to such shortfall to Sellers.

(v) If the sum of the amounts calculated pursuant to Sections 2.4(f)(ii), 2.4(f)(iii) and 2.4(f)(iv) is owed by Purchaser to Sellers, then Purchaser shall, within ten (10) Business Days of the final determination of the Final Statements, pay such net amount to Agent, by way of wire transfer of

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immediately available funds to an account designated by Agent pursuant to Section 2.3(a), and the Purchase Price shall be increased by that amount. If the sum of the amounts calculated pursuant to Sections 2.4(f)(ii), 2.4(f)(iii) and 2.4(f)(iv) is owed by Sellers to Purchaser, then Agent and Purchaser, shall, within ten (10) Business Days of the final determination of the Final Statements, give written instructions to the Escrow Agent to (a) release from the Working Capital Escrow Amount such net amount to Purchaser by wire transfer of immediately available funds to an account specified by Purchaser, and the Purchase Price shall be decreased by that amount; (b) release any remaining Working Capital Escrow Amount to Agent in accordance with the Escrow Agreement; and (c) if such net amount exceeds the Working Capital Escrow Amount, then Agent and Purchaser shall promptly give written instructions to the Escrow Agent to release an amount equal to such excess from the Indemnity Escrow Amount. In the circumstances contemplated in Section 2.4(f)(i), Agent and Purchaser, shall, within ten (10) Business Days of the final determination of the Final Statements, give written instructions to the Escrow Agent to release the entire Working Capital Escrow Amount to Agent in accordance with the Escrow Agreement.

(g) Fees and Expenses. Sellers and Purchaser shall bear the fees and expenses of their respective accountants, auditors and other professional advisors in preparing, reviewing or settling the Draft Statements and the Final Statements, as the case may be. In the case of a dispute and the retention of Third Party Auditors to determine such dispute, the fees and expenses of the Third Party Auditors will be divided between Sellers and Purchaser based on the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party. However, Sellers and Purchaser shall each bear their own fees and expenses in presenting their respective cases to the Third Party Auditors.

2.5 Repayment of Indebtedness.

Immediately prior to Closing, in accordance with Section 2.3(d), Purchaser shall, on behalf of and at the direction of Corporation, pay, or cause to be paid, to the Persons listed in Part A of Schedule 2.5 of the Disclosure Letter, the Indebtedness of Corporation owed to such Persons. The Indebtedness of Corporation, on a consolidated basis, set forth in Part B of Schedule 2.5 of the Disclosure Letter shall remain outstanding.

2.6 Exercise of Options by Optionholders.

Immediately prior to Closing, (1) Sellers shall cause Corporation to (a) take all appropriate actions to ensure that all unvested Options become fully vested immediately prior to Closing and that all restricted shares issued pursuant to the Option Plan are no longer subject to any restrictions and (b) cash-out any Option of any Optionholder that breaches his/her obligation to exercise in accordance with (2) below (it being understood that such cash-out shall not increase the Purchase Price to be paid by Purchaser pursuant to 2.3(a)); and (2) all Optionholders hereby agree to exercise all (but not less then all) of their Options, including the

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unvested Options which have become fully vested pursuant to (1) above, provided that if Closing does not occur for any reason whatsoever, the Optionholders agree to surrender to Corporation any shares of the Corporation issued to such Optionholders pursuant to the said exercise of Options against reinstatement of such Options upon their existing terms immediately prior to the execution of this Agreement, including with respect to the vested or unvested nature of such Options.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLERS

3.1 Representations and Warranties of FSTQ as to Itself.

FSTQ represents and warrants to Purchaser as follows, and acknowledges and confirms that Purchaser is relying upon such representations and warranties in connection with the entering into of this Agreement:

(a) Formation and Status of FSTQ. FSTQ is a special purpose entity duly formed and validly existing and in good standing under the Act to establish the Fonds de Solidarité des Travailleurs du Québec (Québec) and has all requisite power and authority to enter into and perform its obligations under this Agreement.

(b) Validity of Agreement. The execution, delivery and performance by FSTQ of this Agreement, and the consummation of the transactions contemplated hereby:

(i) have been duly authorized by all necessary action on the part of FSTQ;

(ii) do not (or would not with the giving of notice, the lapse of time, or both, or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any terms or provisions of the constating documents, by-laws or other similar documents of FSTQ; and

(iii) will not result in the violation of any applicable Law.

(c) Execution and Binding Obligation. This Agreement has been duly executed and delivered by, and, subject to execution by the other Parties hereto, constitutes a legal, valid and binding obligation of FSTQ, enforceable against FSTQ in accordance with its terms subject only to any limitation on enforcement under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar Laws of general application affecting the enforcement of creditors’ rights; and (ii) the discretion that a court may exercise in the granting of extraordinary remedies such as specific performance and injunction.

(d) Required Authorizations. Except for (i) Competition Act Approval, (ii) HSR Clearance, and (iii) any additional consents, approvals, authorizations, filings and notifications required under any other applicable antitrust, competition or trade regulation Law, no filing with, notice to or Authorization of, any Governmental Entity is required on the part of FSTQ as a condition to the lawful

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completion of the transactions contemplated by this Agreement where the failure to make the filing, give the notice or obtain the Authorization would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole.

(e) Title to Purchased Shares. As of the date hereof, FSTQ is the registered and beneficial owner of the number and class of shares in the capital of Corporation set out beside FSTQ’s name in Part A of Schedule 2.1 of the Disclosure Letter, with a good and valid title thereto, free and clear of all Liens. At Closing, FSTQ (i) will be the registered and beneficial owner of the number and class of Purchased Shares set out beside FSTQ’s name in Part B of Schedule 2.1 of the Disclosure Letter, with a good and valid title thereto, free and clear of all Liens and (ii) will transfer to Purchaser good and valid title to all Purchased Shares owned by FSTQ, free and clear of all Liens.

(f) Residence of FSTQ. FSTQ is not a non-resident of Canada within the meaning of the ITA.

(g) No Brokers. FSTQ has not hired any broker, finder or investment banker or other person who is directly or indirectly entitled to any brokerage, finder’s or other contingent fee or commission or any similar charge in connection with the transactions contemplated by this Agreement.

3.2 Representations and Warranties of Luxco as to Itself.

Luxco represents and warrants to Purchaser as follows, and acknowledges and confirms that Purchaser is relying upon such representations and warranties in connection with the entering into of this Agreement:

(a) Formation and Status of Luxco. Luxco is a corporation duly incorporated, validly existing and in good standing under the Laws of Luxembourg and has all requisite corporate power and authority to enter into and perform its obligations under this Agreement.

(b) Validity of Agreement. The execution, delivery and performance by Luxco of this Agreement, and the consummation of the transactions contemplated hereby:

(i) have been duly authorized by all necessary action on the part of Luxco;

(ii) do not (or would not with the giving of notice, the lapse of time, or both, or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any terms or provisions of the constating documents, by-laws or other similar documents of Luxco; and

(iii) will not result in the violation of any applicable Law.

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(c) Execution and Binding Obligation. This Agreement has been duly executed and delivered by, and, subject to execution by the other Parties hereto, constitutes a legal, valid and binding obligation of Luxco, enforceable against Luxco in accordance with its terms subject only to any limitation on enforcement under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar Laws of general application affecting the enforcement of creditors’ rights; and (ii) the discretion that a court may exercise in the granting of extraordinary remedies such as specific performance and injunction.

(d) Required Authorizations. Except for (i) Competition Act Approval, (ii) HSR Clearance, and (iii) any additional consents, approvals, authorizations, filings and notifications required under any other applicable antitrust, competition or trade regulation Law, no filing with, notice to or Authorization of, any Governmental Entity is required on the part of Luxco as a condition to the lawful completion of the transactions contemplated by this Agreement where the failure to make the filing, give the notice or obtain the Authorization would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole.

(e) Title to Purchased Shares. As of the date hereof, LJVH Investment ULC and LJVH Investment L.P. are the registered and beneficial owners of the number and class of shares in the capital of Corporation set out beside their respective names in Part A of Schedule 2.1 of the Disclosure Letter, with a good and valid title thereto, free and clear of all Liens. At Closing, Luxco (i) will be the registered and beneficial owner of the number and class of Purchased Shares set out beside Luxco’s name in Part B of Schedule 2.1 of the Disclosure Letter, with a good and valid title thereto, free and clear of all Liens and (ii) will transfer to Purchaser good and valid title to all Purchased Shares owned by Luxco, free and clear of all Liens.

(f) No Brokers. Luxco has not hired any broker, finder or investment banker or other person who is directly or indirectly entitled to any brokerage, finder’s or other contingent fee or commission or any similar charge in connection with the transactions contemplated by this Agreement.

3.3 Representations and Warranties of Management Sellers as to Themselves.

Each Management Seller jointly (within the meaning of the Civil Code of Quebec) represents and warrants, as to himself, but not as to any other Management Seller, to Purchaser as follows, and acknowledges and confirms that Purchaser is relying upon such representations and warranties in connection with the entering into of this Agreement:

(a) Validity of Agreement. Such Management Seller is an individual who has attained the age of majority and is legally competent to execute this Agreement and take all actions, consummate all transactions and enter into all other agreements required or contemplated pursuant to this Agreement and, the execution, delivery and performance by such Management Seller of this

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Agreement, and the consummation of the transactions contemplated hereby, (i) do not (or would not with the giving of notice, the lapse of time, or both, or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any terms or provisions of any contracts or instruments to which such Management Seller is a party and (ii) will not result in the violation of any Law.

(b) Execution and Binding Obligation. This Agreement has been duly executed and delivered by, and, subject to execution by the other Parties hereto, constitutes a legal, valid and binding obligation of such Management Seller, enforceable against such Management Seller in accordance with its terms subject only to any limitation on enforcement under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar Laws of general application affecting the enforcement of creditors’ rights; and (ii) the discretion that a court may exercise in the granting of extraordinary remedies such as specific performance and injunction.

(c) Required Authorizations. Except for (i) Competition Act Approval, (ii) HSR Clearance, and (iii) any additional consents, approvals, authorizations, filings and notifications required under any other applicable antitrust, competition or trade regulation Law, no filing with, notice to or Authorization of, any Governmental Entity is required on the part of any such Management Seller as a condition to the lawful completion of the transactions contemplated by this Agreement where the failure to make the filing, give the notice or obtain the Authorization would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole.

(d) Title to Purchased Shares. As of the date hereof, each Management Seller is the registered and beneficial owner of the number and class of shares in the capital of Corporation and the number of Options set out beside such Management Seller’s name in Part A of Schedule 2.1 of the Disclosure Letter, with a good and valid title thereto, free and clear of all Liens. At Closing, each Management Seller (i) will be the registered and beneficial owner of the number and class of Purchased Shares set out beside such Management Seller’s name in Part B of Schedule 2.1 of the Disclosure Letter, with a good and valid title thereto, free and clear of all Liens; and (ii) will transfer to Purchaser good and valid title to all Purchased Shares owned by such Management Seller, free and clear of all Liens.

(e) Residence of Management Seller. Except for any Non-Resident Management Seller listed in Schedule 3.3(e) of the Disclosure Letter, such Management Seller is not a non-resident of Canada within the meaning of the ITA.

(f) No Brokers. Such Management Seller has not hired any broker, finder or investment banker or other person who is directly or indirectly entitled to any brokerage, finder’s or other contingent fee or commission or any similar charge in connection with the transactions contemplated by this Agreement.

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3.4 Representations and Warranties of Sellers as to the LJVH Group Members.

Sellers jointly (within the meaning of the Civil Code of Quebec) represent and warrant to and in favour of Purchaser as follows and acknowledge that Purchaser is relying upon such representations and warranties in connection with the entering into of this Agreement:

(a) Incorporation and Qualification. Each LJVH Group Member is a entity duly constituted, validly subsisting and in good standing under the Laws of its jurisdiction of organization, and has requisite corporate or other company power and authority to own, lease and operate its properties and to carry on its business as currently being conducted, except where any such failure has not been, and would not reasonably be expected to be, material. Each LJVH Group Member is duly registered, licensed or qualified to carry on its business in, and is in good standing in, each jurisdiction in which the business as now being conducted by it makes such registration, licensing or qualification necessary, except for any failure to be so registered or qualified which has not been, and would not reasonably be expected to be, material.

(b) Seller Pre-Closing Reorganization. The Seller Pre-Closing Reorganization will be completed as described in Schedule 5.1 of the Disclosure Letter prior to the Closing Date. The Seller Pre-Closing Reorganization will (i) be duly authorized by all necessary action in compliance with the terms or provisions of the constating documents, by-laws and other similar documents of the applicable entities, (ii) be effected in compliance with all agreements binding upon the LJVH Group Members and (iii) be effected in compliance with all applicable Laws including, without limitation, applicable corporate laws.

(c) Validity of Agreement. The execution, delivery and performance by Sellers of this Agreement, and the consummation of the transactions contemplated hereby do not (or would not with the giving of notice, the lapse of time, or both, or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any terms or provisions of the constating documents, by-laws or other similar documents of any LJVH Group Member.

(d) Required Authorizations. Except for (i) Competition Act Approval, (ii) HSR Clearance, and (iii) any additional consents, approvals, authorizations, filings and notifications required under any other applicable antitrust, competition or trade regulation Law, no filing with, notice to or Authorization of, any Governmental Entity is required on the part of a LJVH Group Member as a condition to the lawful completion of the transactions contemplated by this Agreement where the failure to make the filing, give the notice or obtain the Authorization would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole.

(e) No Other Agreement to Purchase. Except as set forth in Schedule 3.4(e) of the Disclosure Letter and except for certain LJVH Group Members’ rights in accordance with the disclosed terms of the Seller Pre-Closing Reorganization and

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except for Purchaser’s rights under this Agreement, no Person has any written or oral agreement, option or warrant or any right or privilege (whether by Law, pre-emptive or contractual) capable of becoming such for (i) the purchase of any of the Purchased Shares, (ii) the purchase, subscription, allotment or issuance of any of the LJVH Group Member Securities, or (iii) the purchase or acquisition of any property or assets of the LJVH Group Members, other than in the Ordinary Course.

(f) Corporate Records. Except as will be altered by the Seller Pre-Closing Reorganization, the corporate records of the LJVH Group Members, all of which have been made available to Purchaser, are complete and accurate, in all material respects, and in full force and effect, and include the organizational documents and by-laws, minutes of meetings and resolutions of shareholders and directors, and the share certificate books, securities register, register of transfers and register of directors of the LJVH Group Members. No LJVH Group Member is, or since July 19, 2007 has been, in violation of any provisions of its organizational documents or by-laws in any material respect.

(g) Employee Matters.

(i) Except as set forth in Schedule 3.4(g)(i) of the Disclosure Letter, no LJVH Group Member is a party to any written agreement pursuant to which either: (A) incentive, severance or termination payments to any director, officer or employee may be required to be paid, waived or renounced solely as a result of the completion of the transactions contemplated by this Agreement; or (B) any employee or consultant who is bound by confidentiality, non-competition or non-solicitation covenants with such LJVH Group Member is relieved thereof as a result of the completion of the transactions contemplated by this Agreement. Except as set forth in Schedule 3.4(g)(i) of the Disclosure Letter, no LJVH Group Members are bound by any collective bargaining agreements or any other Contracts with any labour union;

(ii) Except as set forth in Schedule 3.4(g)(ii) of the Disclosure Letter: (A) there are no pension, retirement, termination, profit sharing, bonus, incentive, savings, deferred compensation, stock option, purchase or appreciation, change of control, health, welfare, medical, dental, life insurance, disability, sick pay, severance pay (only with respect to key executives), group insurance or other employee benefit, supplemental unemployment benefit plans, programs or arrangements (other than statutory plans which any LJVH Group Member is required to comply with, including the Canada or Quebec Pension Plan, and plans administered pursuant to applicable health tax, workplace safety insurance and employment insurance legislation) or material fringe benefit maintained, sponsored, contributed to or required to be contributed to by LJVH Group Members, or to which LJVH Group Members have or could be reasonably expected to have any Liability (each such plan, program, practice or arrangement

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being referred to herein as a “Benefit Plan”), and no Benefit Plan is subject to Title IV of ERISA; (B) each Benefit Plan has been administered in all material respects according to its terms and applicable Laws and there are no outstanding violations or defaults under or any actions, claims or other proceedings pending or, to the knowledge of Sellers, threatened with respect to any Benefit Plan; (C) no Benefit Plan is currently under a governmental investigation or audit and, to the knowledge of Sellers, no such investigation or audit has been threatened; (D) each Benefit Plan covers only current or former employees of the LJVH Group Members and their dependants and beneficiaries; (E) no promise or commitment to increase benefits under any Benefit Plan or to adopt any additional Benefit Plan has been made, other than any such promise or commitment that is included in a Benefit Plan or amendment thereof or that may be required under applicable Laws to the extent so required; (F) each Benefit Plan that requires funding is funded to the extent required by its terms and applicable Laws, and all required contributions to, and premium payments on account of, each Benefit Plan have been made on a timely basis; (G) no Benefit Plan provides for the payment of post-employment or post-retirement welfare benefits, except to the extent required by applicable Laws, or for the payment of retirement or deferred compensation benefits the present value of which exceeds the fair market value of assets that have been irrevocably set aside in trust solely for the purpose of paying such benefits; (H) the transactions contemplated herein will not increase or accelerate any entitlement under any Benefit Plan or by themselves, or together with any other event, result in an “excess parachute payment” under Code Section 280G; (I) there have been no withdrawals of surplus or contribution holiday, except as permitted by law and the terms of the Benefit Plans; and (J) no Benefit Plan is a “registered pension plan” as such term is defined in the ITA, and since July 19, 2007, no LJVH Group Members has ever sponsored, maintained or participated in such a registered pension plan. Each Benefit Plan that is intended to be qualified under Code Section 401(a) is so qualified. With respect to each Benefit Plan, Sellers have made available to Purchaser true, accurate and complete copies of (A) the plan document and all related amendments, employee summaries, trust agreements and administrative or service agreements, (B) the two most recent Forms 5500 (if any) and (C) in the case of any Benefit Plan that is intended to be qualified under Code Section 401(a), a copy of the most recent determination letter from the U.S. Internal Revenue Service;

(iii) Except as set forth in Schedule 3.4(g)(iii) of the Disclosure Letter, the LJVH Group Members are in compliance with and are in good standing under all applicable Laws, rules, regulations, codes and policies relating to their employees and their employment, including provisions thereof relating to employment standards, wages, hours of work, vacation pay, overtime, termination notice, pay in lieu of termination notice,

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termination and severance pay, human rights, workers’ compensation, occupational health and safety, manpower training, pay equity, unfair labour practices, collective bargaining, equal opportunity or similar laws, rules, regulations, codes and policies related to employment obligations and has properly completed and filed all material reports and filings required by such Laws, rules, regulations, codes and policies, except where such non-compliance has not been, and would not reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole;

(iv) Except as set forth in Schedule 3.4(g)(iv) of the Disclosure Letter, there has not been since January 1, 2009, nor is there existent or, to the knowledge of Sellers, threatened any strike, lockout, slowdown, picketing or work stoppage with respect to the employees of any LJVH Group Member. Except as set forth in Schedule 3.4(g)(iv) of the Disclosure Letter, to the knowledge of Sellers, there is no effort by or on behalf of any labour union to organize any employees, and there have been no such efforts for the past three years. No petition or other proceeding instituted by an employee or group of employees seeking recognition of a bargaining representative is pending before any labour relations board; and

(v) Subject to any information which may not legally be disclosed pursuant to any applicable privacy legislation, true and complete information as to the name, current job title and compensation for each of the last three years of all current executive officers of Corporation has been made available to Purchaser. To the knowledge of Sellers, no current executive, key employee or group of employees has given notice of termination of employment or otherwise disclosed plans to terminate employment with any LJVH Group Member.

(h) Title to Assets. Except as otherwise disclosed in Schedule 3.4(h) of the Disclosure Letter, and except for any Authorizations, Leased Properties and assets otherwise used by the LJVH Group Members pursuant to leases, each LJVH Group Member owns all of the properties and assets (including Intellectual Property) that it purports to own, with good and valid title thereto, free and clear of any Liens or any license agreements with respect to Intellectual Property pursuant to which a LJVH Group Member grants rights in Intellectual Property to a third party or an Affiliate.

(i) Compliance with Laws. The LJVH Group Members, taken as a whole, have been and are conducting the Business in compliance in all material respects with all applicable Laws (except Environmental Laws, which are dealt with in Section 3.4(l)) in each jurisdiction in which it carries on business.

(j) Authorizations. Schedule 3.4(j) of the Disclosure Letter sets out a list of all material Authorizations (including all environmental Authorizations) held in connection with the Business, and all environmental remedial orders to which

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LJVH Group Members, their property and their assets are subject, and copies of same have been made available to Purchaser. Except as set forth in the Environmental Schedules, such Authorizations are all in full force and effect and represent all Authorizations required to own, lease and operate LJVH Group Members’ properties and assets and carry on the Business as now conducted by the LJVH Group Members, other than such Authorizations, the absence of which has not been, and could not reasonably be expected to be, material to the business and operations of LJVH Group Members, taken as a whole. Except as set forth in the Environmental Schedules, no LJVH Group Member has received notification from any Governmental Entity threatening to revoke a material Authorization. Except as set forth in the Environmental Schedules, no LJVH Group Member has failed to comply with any Authorization or any environmental remedial order, except where the failure has been remedied or has not been, and would not reasonably be expected to be, material to the business and operations of LJVH Group Members, taken as a whole.

(k) Intellectual Property.

(i) Schedule 3.4(k)(i) of the Disclosure Letter contains an accurate listing of all material trademarks and trade names, and all domain names, owned by or licensed to LJVH Group Members in the conduct of their Business (the “Trademarks”);

(ii) Schedule 3.4(k)(ii) of the Disclosure Letter contains an accurate listing of all patent applications and patents owned by or licensed to LJVH Group Members in the conduct of their Business (the “Patents”);

(iii) Schedule 3.4(k)(iii) of the Disclosure Letter contains an accurate listing of all registered copyright works owned by or licensed to LJVH Group Members in the conduct of the Business with the exception of any copyright in licensed computer software (the “Copyrights”);

(iv) Schedule 3.4(k)(iv) of the Disclosure Letter contains an accurate listing of all material certification marks, marks of accreditation and similar certifications that are used by LJVH Group Members, including, without limitation, organic, fair-trade and national or regional origin designations. LJVH Group Members’ rights to use all such marks are valid, subsisting and enforceable. The ability of each LJVH Group Member to use each such mark or certification will remain in full force and effect following the completion of the transactions contemplated by this Agreement without any requirement for reaccreditation, audit, payment of fees, or consent from the granting authority or organization;

(v) There is no Claim pending or, to the knowledge of Sellers, threatened by others, against any LJVH Group Member challenging the validity or scope of any Intellectual Property owned or used by any LJVH Group Member, including any Trademarks, Copyrights or Patents or such LJVH Group Member’s rights thereto;

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(vi) There is no Claim pending or, to the knowledge of Sellers, threatened by others, against any LJVH Group Member to the effect that such LJVH Group Member infringes or misappropriates any Intellectual Property of any third party;

(vii) To the knowledge of Sellers, there is no infringement by third parties of any Intellectual Property owned by or licensed to any LJVH Group Member;

(viii) To the knowledge of Sellers, no LJVH Group Member, is or has been infringing or misappropriating any Intellectual Property owned by third parties;

(ix) To the knowledge of Sellers, each LJVH Group Member either exclusively owns or has valid, effective licenses authorizing the use made of all the Intellectual Property used in the conduct of the Business;

(x) LJVH Group Members have used commercially reasonable efforts to maintain the secrecy of trade secrets and confidential information owned and licensed by LJVH Group Members. Each employee and contractor to the LJVH Group Members having access to trade secrets (including recipes, formulas and patentable inventions) of a LJVH Group Member has signed a confidentiality and non-disclosure agreement and to the knowledge of Sellers, there have not been any breaches of such agreements. To the knowledge of Sellers, the employment of any employees or retainer of any consultant by LJVH Group Members does not violate any non-disclosure or non-competition agreement between any employee or consultant and a third party; and

(xi) The Intellectual Property owned or licensed by LJVH Group Members includes all of the material Intellectual Property used by LJVH Group Members in the Ordinary Course of operating the Business.

(l) Compliance with Environmental Laws.

(i) Except as set forth in the Environmental Schedules, and except for any matter or event which has been remedied or which would not reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole: (A) none of the LJVH Group Members has received any written notice from any Governmental Entity that any operations of the LJVH Group Members are not in compliance with or give rise to liability under applicable Environmental Laws; (B) there are no proceedings in progress or, to the knowledge of Sellers, threatened which are expected to result in the cancellation, revocation, suspension, or modification of any environmental Authorization; (C) no LJVH Group Member has been charged with or convicted of an offence, been fined or otherwise sentenced, or settled any prosecution short of conviction, for non-compliance with or breach of any Environmental Law; and (D) there

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are no pending claims, or to the knowledge of Sellers, threatened claims, against the LJVH Group Members arising out of any Environmental Laws; (E) there are no Hazardous Substances present on, at, in, under, or emanating from any Owned Real Properties or Leased Properties, or, to the knowledge of Sellers, any of LJVH Group Members’ previously owned or leased properties, in either case, where such Hazardous Substance could reasonably be expected to give rise to liability under Environmental Laws and (F) the LJVH Group Members have, since July 19, 2007, been and are in compliance with applicable Environmental Laws in each jurisdiction where they carry on business.

(ii) Copies of all environmental reports and documents in the possession or control of LJVH Group Members are listed in Schedule 3.4(l)(ii) of the Disclosure Letter and have been made available to Purchaser prior to the date hereof.

(m) Financial Statements. The Financial Statements (i) have been prepared in accordance with Canadian GAAP applied on a basis consistent with that of previous fiscal years or fiscal quarters, as the case may be (including the absence of notes to the financial statements and audit adjustments required by Canadian GAAP, as the case may be), and (ii) each fairly, accurately and completely discloses in all material respects (A) the assets, liabilities and obligations (whether accrued, contingent, absolute or otherwise), income, losses, retained earnings, reserves and financial position of Corporation, (B) the results of operations of Corporation and (C) the changes in the financial position of Corporation, all as at the dates and for the periods therein specified, in each case on a consolidated basis. No LJVH Group Member has any Liabilities required by Canadian GAAP to be set forth on the consolidated balance sheet of the LJVH Group Members, except for (i) any Liabilities incurred since April 3, 2010 in the Ordinary Course, (ii) any Liabilities set forth in the Financial Statements, (iii) any Liabilities set forth in the Final Statements, or (iv) any Liabilities reflected in the Disclosure Letter that are reasonably apparent by the disclosure thereof.

True, correct and complete copies of the Financial Statements are attached as Schedule 1.1(jj) of the Disclosure Letter.

(n) Litigation. Except as disclosed in Schedule 3.4(n) of the Disclosure Letter and other than litigation in which the Claim or counterclaim, or the Liability or expense that is reasonably expected in connection therewith, does not exceed $1,000,000, there are no claims, actions, proceedings, suits, investigations, inquiries, reviews, judgments or decrees pending or, to the knowledge of Sellers, threatened against or involving any LJVH Group Member or its property or assets, or, without reference to any claim amount, seeking to enjoin the transactions contemplated by this Agreement. None of the LJVH Group Members, or their properties or assets, are subject to a judgment, order, writ, injunction or decree which has been, or would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a

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whole. To the knowledge of Sellers, no officer or director of any LJVH Group Member is a defendant in any material claim, action, proceeding, suit, investigation or internal investigation, inquiry or review in connection with his or her status as an officer or director of any LJVH Group Member.

(o) Contracts.

(i) Schedule 3.4(o)(i) of the Disclosure Letter contains a complete list of the following Contracts as of the date hereof (the Contracts described in this Section 3.4(o)(i), together with all exhibits and schedules thereto being, the “Material Contracts”):

(A) any Contract under which any LJVH Group Member is obliged to make payments on an annual basis in excess of $250,000 in the aggregate;

(B) any partnership, limited liability company, joint venture, alliance, franchise agreement, or other similar agreement or arrangement, relating to the Business or to the formation, creation, operation, management, business or control of any partnership or joint venture that is not, directly or indirectly, a wholly-owned subsidiary of Corporation;

(C) any Contract (other than among LJVH Group Members that are, directly or indirectly, wholly-owned subsidiaries of Corporation) under which Indebtedness for borrowed money in excess of $250,000 is outstanding or pursuant to which any property or asset of an LJVH Group Member is mortgaged, pledged or otherwise subject to a Lien (other than a Permitted Lien) for an amount in excess of $250,000, or any Contract restricting the incurrence of Indebtedness by a LJVH Group Member or the incurrence of Liens (other than Permitted Liens) on any properties or securities of LJVH Group Members or restricting the payment of dividends or the transfer of any Owned Real Property;

(D) any Contract that purports to limit in any material respect the right of any LJVH Group Member to engage in any line of business or to compete with any person or operate in any location;

(E) any Contract providing for the sale or exchange of, or option to sell or exchange, any Property with a fair market value in excess of $250,000, or for the purchase or exchange of, or option to purchase or exchange, any Property with a fair market value in excess of $250,000, entered into in the past twelve months or in respect of which the applicable transaction has not been consummated;

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(F) any Contract for the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets (other than Contracts referenced in the foregoing clause (E)) or equity interests, of another Person, entered into in the past twelve months or in respect of which the applicable transaction has not been consummated, in each case other than any such Contract entered into in the Ordinary Course; and

(G) any Contract currently requiring any LJVH Group Member to offer to purchase or purchase the assets with a fair market value in excess of $250,000 or equity interests of another Person (other than equity interests in another LJVH Group Member, which are set forth as of the date hereof in Schedule 1.1(ggg) of the Disclosure Letter).

(ii) Except as would not reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole, no LJVH Group Member or, to the of knowledge of Sellers, the other parties thereto, is in breach or violation of, or default (in each case, with or without notice or lapse of time or both) under, any Material Contract and no LJVH Group Member has received or given any notice of default under any such Material Contract which remains uncured, and, to the knowledge of Sellers, there exists no state of facts which after notice or lapse of time or both would constitute a default or breach of such Material Contract where such breach would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole.

(p) Real Property. Schedule 3.4(p) of the Disclosure Letter contains a list of each real property, and all other parcels of real property currently owned by the LJVH Group Members, and sets forth the name of the entity owning such property as well as the municipal address and legal descriptions of each parcel of real property currently owned by the LJVH Group Members (collectively, the “Owned Real Properties” and together with the Leased Properties, collectively, the “Properties”). The LJVH Group Member set forth in Schedule 3.4(p) of the Disclosure Letter owns absolute ownership or fee simple title, as the case may be, to the Owned Real Properties, set forth beside such LJVH Group Member’s name in Schedule 3.4(p) of the Disclosure Letter, free and clear of all Liens, other than Permitted Liens. None of the Owned Real Properties or Leased Properties is subject to any decree of or order by a Governmental Entity to be sold or is being condemned, expropriated or otherwise taken by any public authority with or without payment of compensation therefore, nor, to the knowledge of Sellers, has any such condemnation, expropriation or taking been proposed. To the knowledge of Sellers, the current uses of the Owned Real Properties, the occupancy thereof and the business operations therein comply with all applicable building, zoning and land use requirements, and do not violate or conflict with any contractual obligations (including the requirements of any

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applicable Permitted Liens) where such breach would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole.

(q) Leased Property. Schedule 3.4(q) of the Disclosure Letter lists each property or premises currently leased (including properties subject to ground or emphyteutic leases) or subleased by the LJVH Group Members from a third party other than one of the other LJVH Group Members (collectively, the “Leased Properties”) and sets forth the current name of the entity holding such leasehold interest, the current name of the landlord or sublandlord thereunder, the date of the lease and each material amendment, guaranty or other agreement relating thereto, as well as a notification of all locations in respect of which landlord and tenant are not dealing at arms’ length (collectively, the “Lease Documents”). Each of the Lease Documents remains unamended and in full force and effect in accordance with its terms. Each LJVH Group Member set forth in Schedule 3.4(q) of the Disclosure Letter has a good and valid leasehold estate in the Leased Properties, free and clear of all Liens, other than Permitted Liens. True, correct and complete copies of all Lease Documents have been made available to Purchaser. To the knowledge of Sellers, the LJVH Group Members, as well as the relevant landlords and sublandlords, are not in breach or violation of, or default (in each case, with or without notice or lapse of time or both) under any of the Lease Documents and none of the LJVH Group Members have received or given any notice of default under any such agreement which remains uncured.

(r) Authorized and Issued Capital. The authorized capital of the LJVH Group Members is as set out in Schedule 3.4(r) of the Disclosure Letter. The Purchased Shares will, at Closing, constitute all of the issued and outstanding shares in the capital of Corporation. The LJVH Group Member Securities (i) constitute all of the issued and outstanding securities in the capital of the LJVH Group Members (other than the Corporation), (ii) are duly authorized, validly issued, fully paid, non-assessable and free of all pre-emptive rights, (iii) have been offered and issued in compliance with all applicable securities and other Laws and any pre-emptive or similar rights of any Person and (iv) are not subject to any declared or accrued dividends excluding accrued dividends on the preferred shares of Corporation described in Schedule 3.4(r) of the Disclosure Letter. Each of the LJVH Group Member Securities that may be issued pursuant to the Benefit Plans, when issued upon the receipt of the consideration set forth in the applicable Benefit Plan and related agreements, if applicable, will be duly authorized, validly issued, fully paid, non-assessable and free of all pre-emptive rights.

Except for the Options, the Notes and as contemplated by the Seller Pre-Closing Reorganization, there are no outstanding options, notes or other rights held by any Person (i) exercisable, convertible or exchangeable for any shares or other securities of any LJVH Group Member or (ii) having the right to vote on any matter on which the holders of LJVH Group Member Securities may vote, nor is any LJVH Group Member obligated to issue or deliver any such options, notes or other rights.

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Except as set out in Schedule 3.4(r) of the Disclosure Letter, as pursuant to this Agreement and as contemplated by the Seller Pre-Closing Reorganization, there are no outstanding contractual obligations or rights of LJVH Group Members to register or repurchase, redeem or otherwise acquire, vote, dispose of or otherwise transfer or declare dividends or make other distributions on any LJVH Group Member Securities. Except as set out in Schedule 3.4(r) of the Disclosure Letter, no LJVH Group Member is party to any stockholder agreement, voting trust, proxy or other agreement, instrument or undertaking with respect to the LJVH Group Member Securities.

(s) Subsidiaries. Corporation does not, directly or indirectly, own or hold any shares or other ownership, equity or proprietary interest, or any interest convertible into or exchangeable or exercisable for same in any Person, other than the LJVH Group Member Securities.

(t) Title to the LJVH Group Member Securities. Each LJVH Group Member set forth in Schedule 3.4(t) of the Disclosure Letter is the registered and beneficial owner of the applicable LJVH Group Member Securities set forth beside such LJVH Group Member’s name in Schedule 3.4(t) of the Disclosure Letter, with a good title thereto, free and clear of all Liens.

(u) Conduct of Business. Except in connection with the Seller Pre-Closing Reorganization, and except as disclosed in Schedule 3.4(u) of the Disclosure Letter, since April 3, 2010, the LJVH Group Members have:

(i) not amended their respective articles, by-laws or other governing documents;

(ii) conducted the Business in the Ordinary Course;

(iii) not suffered any change that has had, or would have a Material Adverse Effect;

(iv) not made any change in their respective accounting principles and practices which are not required by generally accepted accounting principles as theretofore applied including, without limitation, the basis upon which their assets and liabilities are recorded on their books and their earnings and profits and losses are ascertained;

(v) not settled any litigation, other than litigation which is not material to the business and operations of the LJVH Group Members, taken as a whole;

(vi) not sold, leased, licensed, transferred or assigned, in one or more transactions, any assets, tangible or intangible, other than in the Ordinary Course of the Business or in transactions which are not material to the business and operations of the LJVH Group Members, taken as a whole, and other than transactions among one or more LJVH Group Members

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that are, directly or indirectly, wholly-owned by Corporation in the Ordinary Course;

(vii) not made any loan to, or any other investment in, any other person other than LJVH Group Members in the Ordinary Course;

(viii) not issued, sold or otherwise disposed of any of its share capital, or granted any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its share capital other than pursuant to the terms of the Option Plan;

(ix) not declared, set aside or paid any dividend or made any distribution with respect to its share capital (whether in cash or in kind) or redeemed, purchased or otherwise acquired any of its capital; and

(x) not adopted, amended, modified or terminated any bonus, profit-sharing, incentive, severance, pension or other plan, contract or commitment (or taken any such action with respect to any other such plan) for the benefit of: (A) any of its or its subsidiaries’ officers or directors; or (B) any of its or its subsidiaries’ other employees, other than such adoptions, amendments, modifications or terminations which are not material to the business and operations of the LJVH Group Members, taken as a whole.

(v) Insurance. Schedule 3.4(v) of the Disclosure Letter sets out a list of all insurance policies which are maintained by the LJVH Group Members, all of which are in full force and effect. No LJVH Group Member is in material default with respect to any of the provisions contained in the insurance policies or the payment of any premiums under any insurance policy, nor has any LJVH Group Member failed to give any notice or to present any claim under any insurance policy in a due and timely fashion.

(w) Tax Matters. Except as disclosed in Schedule 3.4(w) of the Disclosure Letter:

(i) Each of the LJVH Group Members has filed or caused to be filed with the appropriate Governmental Entity, in the manner prescribed by applicable Law, all federal, state, provincial, municipal, local and foreign Tax Returns which are required to be filed by or with respect to it. The information contained in each such Tax Returns is correct and complete in all material respects;

(ii) Each of the LJVH Group Members has timely paid all Taxes which are due and payable as required by applicable Law (including all installments on account of Taxes), and has paid all assessments and reassessments it has received in respect of Taxes;

(iii) There are no outstanding agreements, arrangements, waivers or objections extending the statutory period or providing for an extension of

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time with respect to the assessment, reassessment, payment or remittance of Taxes or the filing of Tax Returns of any of the LJVH Group Members;

(iv) There are no claims, disputes, investigations, assessments, reassessments, deficiencies, actions, suits or audits pending or, to the knowledge of Sellers, threatened against any of the LJVH Group Members in respect of Taxes that have been raised in writing by a Governmental Entity;

(v) Each of the LJVH Group Members has withheld from each payment made to other persons, including any of its past and present shareholders, directors, officers, employees and agents and any non-residents the amount of all Taxes and other deductions required to be withheld and has paid such amounts when due, in the form required under appropriate laws, or made adequate provision for the payment of such amounts to the proper receiving authorities (and has materially complied with all reporting and recordkeeping requirements). The amount of Tax withheld but not remitted by each of the LJVH Group Members has been retained in the appropriate accounts;

(vi) Each of the LJVH Group Members has collected from each receipt from any of its past and present customers (or other Persons paying amounts to the LJVH Group Members) the amount of all Taxes required to be collected and has paid and remitted such Taxes when due, in the form required under appropriate laws or made adequate provision for the payment of such amounts to the proper receiving authorities. The amount of Tax collected but not remitted by each of the LJVH Group Members has been retained in the appropriate accounts;

(vii) Sellers have made available to Purchaser correct and complete copies of all material Tax Returns and all material correspondence with any Governmental Entity with respect to Taxes, including all material assessments, reassessments, examination reports, statements of deficiency and related documents and other information requested by PriceWaterhouseCoopers, filed, assessed against, agreed to, issued to or by or received or sent by LJVH Group Members on or after January 1, 2007. To the knowledge of Sellers, no closing agreements, advance Tax rulings, private letter rulings, technical advice memoranda or similar agreements or rulings relating to Taxes have been entered into or issued by any Governmental Entity with or in respect of any LJVH Group Member that have an effect on any Post-Closing Tax Period. The unpaid taxes of LJVH Group Members (other than unpaid Taxes arising out of any Tax Audit Claims, or any portion thereof, that any LJVH Group Member claims is statute-barred, to the extent related to item 2 as disclosed on Schedule 1.1(hhhh) of the Disclosure Letter) (A) did not, as of the date of Corporation’s audited consolidated financial statements as of and for the year ended April 3, 2010, exceed the reserve for Taxes (excluding any reserve for deferred Taxes established to reflect timing

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differences between book and Tax income) set forth on the face thereof (rather than in any notes thereto) and (B) will not exceed such reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of LJVH Group Members in filing their Tax Returns and taken into account in the adjustment to Purchase Price;

(viii) No LJVH Group Member has executed any power of attorney, or authorized any representative, with respect to any Tax, other than powers of attorney, and authorizations of representation, that are no longer in force. No written claim has ever been made by a Governmental Entity in a jurisdiction in which an LJVH Group Member does not file Tax Returns that such LJVH Group Member is subject to taxation in that jurisdiction. There are no Liens with respect to Taxes upon any of the assets of any LJVH Group Member, other than for current Taxes not yet due and payable;

(ix) Since April 3, 2010, except as required under applicable Laws, no LJVH Group Member has made, changed or revoked any Tax election, except in the ordinary course of business and consistent with past practice; changed in any material respect any method of Tax accounting or Tax accounting period; entered in writing into any settlement of (or compromise with respect to) any audit, claim, assessment or reassessment or liability for Taxes; or entered in writing into any closing agreement or surrendered in writing any right to claim a Tax refund;

(x) No LJVH Group Member has, prior to the Closing Date, claimed any reserve or deduction, accelerated any deduction or made any election under any provision of the ITA or the Code (or any other provincial, state, local or foreign Tax Law) that would have the effect of deferring income that has been economically accrued in a Pre-Closing Tax Period to a Post-Closing Tax Period or accelerating a deduction from a Post-Closing Tax Period to a Pre-Closing Tax Period;

(xi) The amount of any limitation under Code Section 382, 383 or 384 is as set forth on Schedule 3.4(w) of the Disclosure Letter. Since July 19, 2007 (and disregarding the transactions contemplated under this Agreement), there has been no ownership change as defined in Section 382 of the Code with respect to any U.S. LJVH Group Member;

(xii) There are no circumstances which exist and would result in, or which have existed and resulted in, the application of any of section 17, subsection 18(4) or sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the ITA or any equivalent provision of the taxation legislation of any province or any other jurisdiction, to any LJVH Group Member at any time up to and including the Closing Date in respect of any transaction entered into;

(xiii) There has been no acquisition of control, for purposes of the ITA, of any LJVH Group Member since July 19, 2007;

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(xiv) No LJVH Group Member is a “public corporation” for purposes of the ITA;

(xv) No LJVH Group Member is a party to, bound by or obligated under any Tax sharing agreement, Tax indemnification agreement or other contractual agreement relating to Tax sharing or allocation, other than this Agreement. No LJVH Group Member will be required to include any amount in taxable income or exclude any item of deduction or loss from taxable income for any taxable period, or portion thereof, ending after the Closing Date as a result of any agreement with a Governmental Entity entered into on or prior to the Closing Date. No LJVH Group Member has entered into any advance pricing agreement with any Governmental Entity;

(xvi) No LJVH Group Member has ever been a member of an “affiliated group” (within the meaning of section 1504(a) of the Code) filing a consolidated U.S. federal income Tax Return (other than a group the parent of which is a LJVH Group Member), or has ever been a member of any other consolidated, combined, affiliated, unitary or similar group for Tax purposes (other than a group the parent of which is a LJVH Group Member). No LJVH Group Member has any liability for the Taxes of any other Person (other than the LJVH Group Members), including any liability under Section 160 of the ITA or under section 1.1502-6 of the U.S. Treasury Regulations, or any similar provision of provincial, state, local or foreign law, as a transferee or successor, by contract or otherwise;

(xvii) No LJVH Group Member is a “passive foreign investment company” as defined in the Code;

(xviii) No non-U.S. LJVH Group Member is subject to Tax in the United States (or any of its political subdivisions) by virtue of having a permanent establishment, fixed place of business or otherwise in the United States. All payments by, to or among LJVH Group Members materially comply with applicable transfer pricing requirements imposed by any Governmental Entity;

(xix) The Purchased Shares do not, and have not at any particular time during the sixty (60) months prior to Closing, derived, directly or indirectly, more than 50% of their fair market value from one or any combination of (A) real or immovable property situated in Canada, (B) Canadian resource properties, (C) timber resource properties or (D) options in respect of, interests in or civil law rights in any of the foregoing, whether or not the property exists, as such terms are defined for purposes of the definition of “taxable Canadian property” in subsection 248(1) of the ITA;

(xx) No LJVH Group Member has ever participated in a “listed transaction” within the meaning of section 6707A(c)(2) of the Code (or any comparable

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provision of any provincial, state, local, Canadian federal or other foreign Tax Law);

(xxi) All Taxes assessed or reassessed in connection with the implementation, operation, and unwinding of the VH Financing Trust structure have been fully paid and Van Houtte Group Inc. and VH Financing Trust have agreed to a settlement with the Canada Revenue Agency, Alberta Finance and Enterprise, Ontario Ministry of Revenue and Revenu Quebec that no additional Taxes will be assessed or reassessed in respect of such matters. VH Financing Trust, Van Houtte Group Inc. and all other LJVH Group Members have acted in accordance with, and have not violated, the terms of such settlement; and

(xxii) To the knowledge of Sellers, the taxable year of Corporation for United States federal income tax purposes ends on the Saturday closest to March 31st (the “Taxable Year”).

(x) No Brokers. Other than any fees payable by Corporation to UBS Securities LLC, to Deutsche Bank Securities Inc. and to Moelis & Company LLC, no broker, finder or investment banker or other person is directly or indirectly entitled to any brokerage, finder’s or other contingent fee or commission or any similar charge in connection with the transactions contemplated by this Agreement.

(y) Noncontravention. Except as set forth in Schedule 3.4(y) of the Disclosure Letter, the execution, delivery and performance of this Agreement by Sellers, and the consummation of the transactions contemplated hereby, (i) do not (or would not with the giving of notice, the lapse of time, or both, or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any terms or provisions of any Material Contract and (ii) will not result in the violation of any applicable Law by any LJVH Group Member.

(z) Affiliate Transactions. Except for the Contracts set forth in Schedule 3.4(z) of the Disclosure Letter, Contracts related to Options or the employment of any Management Seller or the LJ Services Agreement, no officer, director or Affiliate of the LJVH Group Members, nor any officer or director of any such Affiliate, nor any immediate family members of any of the foregoing, is a party to any Contract or has any interest in any material asset or property used by any LJVH Group Member.

(aa) Indebtedness and Guarantees. The LJVH Group Members have no Liabilities in respect of Indebtedness except as set forth on Schedule 2.5 of the Disclosure Letter and except for the retention and other bonuses or payments as a result of the transactions contemplated hereby (including any stay-pay, retention and other bonuses or severance pay identified in Schedule 3.4(g)(ii) of the Disclosure Letter.)

(bb) [Intentionally omitted.]

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(cc) Product Warranties. Except as set forth in Schedule 3.4(cc) of the Disclosure Letter (and except for other liabilities for which there is a reserve reflected in the Financial Statements), there are no material claims outstanding, pending or, to the knowledge of Sellers, threatened for breach of any express written warranty relating to any products manufactured, sold or delivered by the LJVH Group Members (the “Products”). To the knowledge of Sellers, there is no material design defect with respect to any such Products.

(dd) Product Quality and Safety. The LJVH Group Members’ manufacturing and storage practices, and the ingredients, composition, and labeling for each of the Products, (i) are in material compliance with all applicable Laws, including Laws relating to food and beverages, and the carrying out of the transactions contemplated by this Agreement will not result in the violation of any such Laws or require the audit, recall, relabeling or repackaging of any Product prior to continued distribution of such Product; and (ii) are in material compliance with all internal quality management policies and procedures of the LJVH Group Members. All labeling used on the Products has been filed or registered with and/or approved by each applicable Governmental Entity that requires such filing, registration and/or approval. Except as set forth in Schedule 3.4(dd) of the Disclosure Letter, since July 19, 2007 (a) there have been no Governmental Entity ordered recalls of any of the Products and (b) to the knowledge of Sellers, none of the Products have been adulterated, misbranded, mispackaged, or mislabeled in violation of applicable Laws. The LJVH Group Members have made available to Purchaser complete and accurate copies of all reports resulting from any audits and inspections of the LJVH Group Members’ quality management practices conducted by any LJVH Group Member or by any other Person since July 19, 2007 in any LJVH Group Member’s custody and control.

(ee) Advertising Claims. All claims made in advertising are substantiated to the degree required by applicable Law by information in the possession of a LJVH Group Member at the time the advertising was released to media for publication. The LJVH Group Members have not received any letters, notices or inquiries from, and no investigation is pending by, the Federal Trade Commission or other applicable Governmental Entity with respect to Product Claims, statements or assertions. The LJVH Group Members have used and shall, at all times prior to Closing continue to use, commercially reasonable efforts to review all material Product claims, statements or assertions for veracity and compliance with applicable Laws.

(ff) Data Privacy. LJVH Group Members’ use and dissemination of any personally identifiable information concerning individuals is in material compliance with all applicable privacy policies, terms of use, contractual obligations and, to the knowledge of Sellers, Laws applicable to any LJVH Group Member or to which any LJVH Group Member is bound. To the knowledge of Sellers, LJVH Group Members maintain policies and procedures regarding data security and privacy, and maintain administrative, technical and physical safeguards, that are commercially reasonable and, in any event, in material compliance with all

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applicable contractual obligations and Laws applicable to any LJVH Group Member or to which any LJVH Group Member is bound. Since July 19, 2007, there have been, to the knowledge of Sellers, no material security breaches relating to, or violations of any material security policy regarding, or any unauthorized access of, any data or information used by any LJVH Group Member in connection with the Business.

(gg) Franchise Operations. There are no management, franchise, license or other agreements providing for the management of any of the Owned Real Properties by any party other than a LJVH Group Member. Schedule 3.4(gg) of the Disclosure Letter lists (i) all agreements pursuant to which any LJVH Group Member grants any rights to any third party (other than another LJVH Group Member that is, directly or indirectly, wholly-owned by Corporation) to operate any store, outlet or property that is subject to any such agreement, (ii) the LJVH Group Member that is party to each such agreement, (iii) the date of each such agreement and (iv) each material amendment, guaranty or other instrument or agreement that is related to each such agreement and binding on any LJVH Group Member (collectively, the “Franchise Agreement Documents”) (true, correct and complete copies of all Franchise Agreement Documents having been made available to Purchaser), each of which is valid, binding and in full force and effect as against LJVH Group Members and, to the knowledge of Sellers, as against the other party or parties thereto.

(hh) Investment Canada Act. None of the LJVH Group Members carries on a “cultural business” as such term is defined in the Investment Canada Act. The undertakings (the “ICA Undertakings”) set out in the letter of the Corporation to The Minister Responsible for the Investment Canada Act dated July 9, 2007 that was made available to Purchaser constitute all of the undertakings, obligations or commitments of any nature whatsoever under the Investment Canada Act of any of the LJVH Group Members. Each LJVH Group Member was in compliance with the Undertakings for the duration of the term of the Undertakings.

(ii) Non-Termination of Relationships. No LJVH Group Member has received any written notice that any licensee, franchisee, customer, supplier or distributor, key employee or key sales representative (excluding Purchaser, Parent or any of their Affiliates) intends to cancel, terminate or not renew its relationship with any LJVH Group Member and, to the knowledge of Sellers, no such action has been threatened that, in each case, either individually or in the aggregate, could reasonably be expected to be material to the business and operations of LJVH Group Members, taken as a whole.

(jj) Non-Reliance. Sellers acknowledge that, except for the specific representations and warranties made in Section 4.1 hereof, they are not relying upon any representation or warranty of Purchaser or Parent.

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3.5 Disclaimer of Sellers.

(a) Except as set forth in this Article 3, none of the Sellers, their Affiliates or any of their respective officers, directors, employees or representatives makes or has made any other representation or warranty, express or implied, with respect to the Purchased Shares, the LJVH Group Members or the Business, including with respect to (i) the operation of the LJVH Group Members by Purchaser after Closing, and (ii) the success or profitability of the LJVH Group Members after Closing; and

(b) none of Sellers, their Affiliates or any of their respective officers, directors, employees or representatives will have or be subject to any liability or indemnification obligation to Purchaser or to any other Person resulting from the distribution to Purchaser, its Affiliates or representatives of, or Purchaser’s use of, any information relating to the Business, including the confidential information memorandum and any information, documents or material made available to Purchaser, whether orally or in writing, in certain “Datarooms”, management presentations, responses to questions submitted on behalf of Purchaser or in any other form in expectation of the transactions contemplated by this Agreement. Any such other representation or warranty is hereby expressly disclaimed.

3.6 Disclosure Letter.

Contemporaneously with the execution and delivery of this Agreement, Sellers are delivering to Purchaser the Disclosure Letter required to be delivered pursuant to this Agreement, which is deemed to constitute an integral part of this Agreement. Disclosures in the Disclosure Letter will be deemed to be made for purposes of the section or subsection of this Agreement to which they correspond in number, and for each other section or subsection of this Agreement to the extent that it is reasonably apparent that such disclosure is relevant to such other section or subsection.

The Parties hereby acknowledge and agree that disclosure of the information contained in the Disclosure Letter does not constitute or imply and shall not be construed as: (a) any representation, warranty, covenant or agreement which is not expressly set out in this Agreement; (b) an admission of any liability or obligation of any Seller; (c) an admission that any information is material or would have a Material Adverse Effect; (d) a standard of materiality or Material Adverse Effect, a standard for what is or is not in the Ordinary Course, or any other standard contrary to any contained in this Agreement; or (e) an addition or modification to the scope of any of the representations and warranties set out in this Agreement.

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT

4.1 Representations and Warranties of Purchaser and Parent.

Purchaser and Parent solidarily (within the meaning of the Civil Code of Québec) represent and warrant to and in favour of Sellers as follows and acknowledge that Sellers are relying upon such representations and warranties in connection with the entering into of this Agreement:

(a) Formation and Qualification. Each of Purchaser and Parent is a corporation duly incorporated, validly existing and in good standing under the Laws of its jurisdiction of incorporation.

(b) Validity of Agreement. The execution, delivery and performance by each of Purchaser and Parent of this Agreement, and the consummation of the transactions contemplated hereby:

(i) have been duly authorized by all necessary action on the part of each of Purchaser and Parent;

(ii) do not (or would not with the giving of notice, the lapse of time, or both, or the happening of any other event or condition) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any terms or provisions of the constating documents, by-laws or other similar documents of either of Purchaser or Parent; and

(iii) will not result in the violation of any applicable Law.

(c) Execution and Binding Obligation. This Agreement has been duly executed and delivered by, and, subject to execution by the other Parties hereto, constitutes a legal, valid and binding obligation of each of Purchaser and Parent, enforceable against them in accordance with its terms subject only to any limitation on enforcement under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other similar Laws of general application affecting the enforcement of creditors’ rights; and (ii) the discretion that a court may exercise in the granting of extraordinary remedies such as specific performance and injunction.

(d) Litigation. There are no actions, suits, appeals, claims, applications, investigations, orders, proceedings, grievances, arbitrations or alternative dispute resolution processes in progress, pending, or to Purchaser’s knowledge, threatened against either of Purchaser or Parent, which prohibits, restricts or seeks to enjoin the transactions contemplated by this Agreement.

(e) Required Authorizations. Except for (i) Competition Act Approval, (ii) ICA Approval, (iii) HSR Clearance, and (iv) any additional consents, approvals, authorizations, filings and notifications required under any other applicable

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antitrust, competition or trade regulation Law, no filing with, notice to or Authorization of, any Governmental Entity is required on the part of Purchaser or Parent as a condition to the lawful completion of the transactions contemplated by this Agreement where the failure to make the filing, give the notice or obtain the Authorization would reasonably be expected to be material.

(f) Purchaser’s Financing. Assuming the satisfaction of the closing conditions in Section 6.2 and performance by Sellers in all material respects of their obligations under Sections 5.3 and 5.9, Purchaser will have at Closing available cash or existing borrowing facilities in the aggregate amount that is sufficient to pay the Purchase Price and to consummate the transactions contemplated by this Agreement.

(g) Sophisticated Purchaser; Access. Each of Purchaser and Parent is knowledgeable, sophisticated and experienced in business and financial matters, has had access to its full satisfaction to management of the LJVH Group Members and their respective books and records, contracts, agreements and documents for the purpose of conducting its due diligence review, and has had such opportunity to seek accounting, legal or other advice or information in connection with its entry into this Agreement and the other documents referred to herein relating to the consummation of the transactions contemplated hereby and thereby as it has seen fit.

(h) No Brokers. Other than the fees payable to Merrill Lynch, Pierce, Fenner & Smith Incorporated and to CIBC World Markets Inc., no broker, finder or investment banker or other person is directly or indirectly entitled to any brokerage, finder’s or other contingent fee or commission or any similar charge in connection with the transactions contemplated by this Agreement.

(i) No Reliance. Each of Purchaser and Parent acknowledges that, except for the specific representations and warranties made in Sections 3.1, 3.2, 3.3 and 3.4 hereof, it is not relying upon any representation or warranty of any Seller, nor upon the accuracy of any record, projection or statement made available or given to Purchaser in the performance of its due diligence review.

(j) Tax. Purchaser is not a “United States Person” as defined in Section 7701(a)(30) of the Code. More than 50% of the equity ownership of Purchaser is held (directly or indirectly under Section 958 of the Code) by “United States Persons”.

ARTICLE 5

PRE-CLOSING COVENANTS OF THE PARTIES

5.1 Seller Pre-Closing Reorganization.

Notwithstanding anything to the contrary set forth herein, prior to Closing, Sellers shall, and shall cause Corporation and certain of its Affiliates to, take all steps necessary to effect and carry out the reorganization set forth in Schedule 5.1 of the Disclosure Letter (the “Seller Pre-Closing Reorganization”). Subject to Article 9

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(including Section 9.2(iv)), no representation, warranty or covenant made by any Seller hereunder shall be deemed to be breached as a result of or in connection with the implementation of the Seller Pre-Closing Reorganization.

5.2 Purchaser Pre-Closing Reorganization.

(a) Subject to the other terms of this Agreement, Sellers agree that, upon request by Purchaser, Sellers shall, and shall cause the LJVH Group Members to, use their commercially reasonable efforts to:

(i) effect such reorganizations of its business, operations and assets and the integration of other affiliated businesses as Purchaser may reasonably request (each, a “Purchaser Pre-Closing Reorganization”); and

(ii) cooperate with Purchaser and its advisors to determine the nature of any Purchaser Pre-Closing Reorganization that might be undertaken and the manner in which they may most effectively be undertaken.

(b) Purchaser acknowledges and agrees that a Purchaser Pre-Closing Reorganization shall not (A) materially impede, delay or prevent consummation of the transactions contemplated hereby (including by giving rise to litigation by third parties), (B) unreasonably interfere with the ongoing operations of the LJVH Group Members, (C) prejudice or have adverse consequences for (after taking into account reimbursement under paragraph (e) below) Sellers or their, direct or indirect, equity holders, including in the event Closing does not occur, (D) prejudice or have adverse consequences for (after taking into account reimbursement under paragraph (e) below) any LJVH Group Member in the event Closing does not occur, (E) be considered in determining whether a representation, warranty or covenant of any of Sellers hereunder has been breached or (F) result in an unreimbursed material cost, expense or Tax for Sellers or any LJVH Group Member.

(c) Purchaser shall provide written notice to Sellers of any proposed Purchaser Pre-Closing Reorganization at least twenty (20) days prior to the Closing Date. Upon receipt of such notice, Purchaser and Sellers shall work cooperatively and use commercially reasonable efforts to prepare, prior to the Closing Date, all documentation necessary and do such other acts and things as are necessary to give effect to any Purchaser Pre-Closing Reorganization.

(d) The Parties shall seek to have any such Purchaser Pre-Closing Reorganization made effective as of the last moment of the day ending immediately prior to the Closing Date, or such other time as Purchaser reasonably requests (but, in any event, after the satisfaction of the condition in Section 6.2(d)).

(e) If Closing does not occur other than by reason of a breach of this Agreement by Sellers or Agent, Purchaser will forthwith reimburse Sellers for all reasonable third-party out-of-pocket fees and expenses (including any professional fees, expenses and Taxes) incurred by Sellers and the LJVH Group Members in

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considering and effecting the Purchaser Pre-Closing Reorganization and shall be responsible for any reasonable out-of-pocket costs and Taxes of Sellers and the LJVH Group Members in reversing or unwinding any Purchaser Pre-Closing Reorganization that was effected prior to termination of this Agreement at Purchaser’s request (provided that such reversal or unwinding must occur in the most tax-efficient manner which is commercially reasonable under the circumstances). The obligation of Purchaser to reimburse Sellers for reasonable third-party out-of-pocket fees, expenses and Taxes and to be responsible for reasonable out-of-pocket costs and Taxes as set out in this Section 5.2(e) will be in addition to any other payment Purchaser may be obligated to make hereunder and, notwithstanding anything to the contrary herein, shall survive termination of this Agreement.

5.3 Conduct of Business Prior to Closing.

Except (i) as Purchaser otherwise agrees in writing, such agreement not to be unreasonably withheld, conditioned or delayed, (ii) as is otherwise expressly permitted or contemplated by this Agreement, including the Seller Pre-Closing Reorganization, or (iii) as is otherwise required by applicable Law, Sellers shall cause the LJVH Group Members, during the Interim Period, to:

(a) conduct the Business only in, and not take any action except in, and maintain its properties and facilities in the Ordinary Course; and

(b) not:

(i) transfer, issue, grant, award, sell, pledge, lease, grant a license in, dispose of or encumber, or agree to issue, sell dispose of or encumber: (A) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares or other securities in, the capital of any LJVH Group Member (other than pursuant to the exercise of Options currently outstanding) or (B) except in the Ordinary Course, any assets of any LJVH Group Member;

(ii) amend, or propose to amend, organizational documents or by-laws;

(iii) split, combine or reclassify shares of LJVH Group Members, or declare, set aside or pay any dividend or other distribution payable in cash, securities, property or otherwise with respect to shares of LJVH Group Members;

(iv) redeem, purchase or agree or offer to redeem or purchase any shares or other securities or ownership interests in LJVH Group Members; or

(v) amend the Option Plan, or adopt or amend any other bonus, profit sharing, incentive, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any

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employee, other than amendments affecting only employees other than executives that are made in the Ordinary Course;

(vi) other than in the Ordinary Course, repay any Indebtedness (except for Indebtedness that has been reserved against in the Financial Statements) or other indebtedness or amount payable, or otherwise transfer cash or cash equivalents between LJVH Group Members;

(vii) incur or assume, other than in the Ordinary Course, any Indebtedness;

(viii) make any loan, advance or capital contribution to, or investment in, or otherwise acquire the securities of, any other Person, or make any loan to any officer or director of any LJVH Group Member, other than Option Loans;

(ix) waive, release, assign, settle or compromise (i) any Claim for over $250,000 or (ii) any legal action that is brought by any current, former or purported holder of any LJVH Group Member securities (in his, her or its capacity as such) that either requires any payment to such security holder by any LJVH Group Member or adversely affects in any material respect the ability of any LJVH Group Member to conduct the Business in the Ordinary Course;

(x) make individual capital expenditures in excess of $500,000;

(xi) make aggregate capital expenditures in any one four-week fiscal period (starting with the first four-week fiscal period beginning after the date hereof) as reported by Corporation in excess of $3,000,000;

(xii) change any of its practices, policies, procedures or timing of the collection of accounts receivable or payment of accounts payable, billing of its customers, pricing and payment terms, cash collections, cash payments, or terms with vendors except in the Ordinary Course;

(xiii) grant, issue or enter into any contract or agreement that would give rise to any interest in, right or entitlement in respect of the Corporation (or any LJVH Group Member that will be a predecessor of the Corporation at Closing) where such right or entitlement will be held by any Person that is a direct or indirect shareholder of the Corporation or a LJVH Group Member (other than the Corporation or a predecessor of the Corporation); and

(xiv) authorize or enter into an agreement to do any of the foregoing;

(c) use commercially reasonable efforts to maintain insurance on and in respect of the assets of LJVH Group Members in like kind to, and in amounts no less than the amounts of, insurance in respect of such assets in effect on the date hereof;

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(d) use commercially reasonable efforts to preserve intact the Business and the goodwill of LJVH Group Members, and to keep available the services of the officers and employees of LJVH Group Members;

(e) not take any action that would render, or that would reasonably be expected to render, any representation or warranty made by Sellers, to be untrue in any material respect at any time prior to the Effective Time, other than representations and warranties that are qualified by materiality in which case Sellers shall cause the LJVH Group Members not to take any action that would render, or that would reasonably be expected to render, such representations and warranties untrue in any respect at any time prior to the Effective Time (except that any representation or warranty that speaks solely as of a specific date only needs not to be rendered or not to be reasonably expected to be rendered untrue as of that date) made by Sellers in this Agreement untrue at any time prior to the Effective Time;

(f) promptly notify Purchaser of any change that could have a Material Adverse Effect;

(g) not enter into any foreign exchange agreement that would have been listed in Schedule 1.1(kk)) of the Disclosure Letter if it had been entered into prior to the date of this Agreement;

(h) not enter into any futures or other contract related to the purchase of coffee beans that would have been listed in Schedule 1.1(t) of the Disclosure Letter if it had been entered into prior to the date of this Agreement; and

(i) not take any action to authorize, approve, implement, or in furtherance of the transactions contemplated in or otherwise create or execute any binding commitment or agreement under the nonbinding letter agreement dated September 13, 2010 and entered into between Pause-Café de l’Estrie Inc., Sylvain Bouffard, Automates Alouette Inc., Benoît Gaboriault, Alain Gaboriault and Van Houtte Group Inc.

5.4 Notice of Untrue Representation or Warranty.

Each Seller with respect to its own representations and warranties in Sections 3.1, 3.2 and 3.3, respectively, and Agent with respect to the representations and warranties in Section 3.4, shall promptly notify Purchaser, and Purchaser with respect to its representations and warranties in Article 4, shall promptly notify Agent, as the case may be, upon any representation or warranty made by such Party contained in this Agreement becoming materially untrue or incorrect during the Interim Period. Any such notification shall set out particulars of the materially untrue or incorrect representation or warranty and details of any actions being taken by each Seller, or Purchaser, as the case may be, to rectify that state of affairs.

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5.5 Access.

During the Interim Period, Sellers shall cause the LJVH Group Members to afford to Purchaser and Parent and its legal, accounting and other representatives reasonable access during normal business hours (without undue interference to the ordinary conduct of the business of the LJVH Group Members) to the Business and their affairs and properties.

5.6 Confidentiality.

The terms of the letter agreement dated as of May 18, 2010 (the “Confidentiality Agreement”) between Corporation and Parent continues in full force and effect until Closing, at which time such Confidentiality Agreement and the obligations of Purchaser thereunder with respect to the disclosure and use of Confidential Information (as defined in the Confidentiality Agreement) shall terminate; provided, however, that the Confidentiality Agreement shall terminate only in respect of that portion of the Confidential Information (as defined in the Confidentiality Agreement) exclusively relating to the Business and the transactions contemplated by this Agreement. If this Agreement is, for any reason, terminated prior to Closing, the Confidentiality Agreement shall nonetheless continue in full force and effect.

5.7 Filings and Authorizations.

(a) Each of Agent and Purchaser, as promptly as practicable (but in no event later than ten (10) days after the execution of this Agreement for all filings, will use (or in the case of Agent, cause Corporation to use) its commercially reasonable efforts, and in doing so will cooperate with each other, to make, or cause to be made, all filings (which, for greater certainty, in Canada, will include both pre-merger notification filings and an application for an Advance Ruling Certificate) with, give all notices to, and obtain all Authorizations from, Governmental Entities that are necessary for the lawful completion of the transactions contemplated by this Agreement and where the failure to do so would reasonably be expected to be material to the business and operations of the LJVH Group Members, taken as a whole. Purchaser will pay all filing fees incurred in connection with any such required Authorization, including Competition Act Approval and HSR Clearance. Notwithstanding anything to the contrary contained in this Section 5.7 or elsewhere in this Agreement, Purchaser: (A) shall not have any obligation to take any actions to obtain Competition Act Approval or HSR Clearance, including negotiating or effecting by consent agreement or order, hold separate arrangement or otherwise, the divestiture of businesses or assets or any form of behavioural remedy or commitment, where Parent determines in good faith that such actions would reasonably be expected to materially and adversely affect the business or interests of Purchaser, Parent and its Affiliates, taken as a whole post-Closing; and (B) shall not have any obligation to accept any undertakings or other terms and conditions to obtain ICA Approval, except such undertakings and terms and conditions as would reasonably be considered usual and customary for a transaction of such nature and scope as the transactions contemplated by this Agreement, it being acknowledged that undertakings which are not materially more onerous than

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those provided by Corporation to The Minister Responsible for the Investment Canada Act in July 2007 shall be deemed to be customary.

(b) Purchaser will be primarily responsible for obtaining required Authorizations, including Competition Act Approval, HSR Clearance and ICA Approval, including, without limitation, (i) initiating all contacts with regulatory authorities, (ii) being provided with prompt notice of any communications to Sellers by regulatory authorities and participating in all communications with regulators. Agent and Purchaser will coordinate and cooperate in exchanging information and supplying assistance that is reasonably requested in connection with this Section 5.7, including providing each other with advanced copies and reasonable opportunity to comment on all notices and information supplied to or filed with any Governmental Entity (including notices and information which Agent or Purchaser, in each case acting reasonably, consider to be highly confidential and sensitive, which notices and information shall be provided to counsel to the other Party on an outside counsel only basis), and all notices and correspondences received from any Governmental Entity. Agent and Purchaser shall keep the other apprised of the status of any communications with, and any inquiries or requests for additional information from, any Governmental Entities and each Party shall comply promptly with such inquiry or request. Neither Purchaser nor Agent shall independently participate in any meeting, negotiation or material discussion with any Governmental Entity in respect of any such filings, inquiries, or requests, without giving the other prior notice of the meeting and, to the extent permitted by such Governmental Entity, the opportunity to attend and participate.

5.8 Financing Capacity.

Purchaser and Parent shall use their commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange and obtain the proceeds of the financing required to consummate the transactions contemplated by this Agreement and to pay related fees and expenses (the “Financing”) on the terms and conditions described in Exhibit 5.8 (the “Financing Terms”); provided, however, that Parent and Purchaser may amend, modify, supplement, restate or replace the Financing Terms, in whole or in part, if such amendment, modification, supplement, restatement or replacement (x) does not reduce the aggregate amount of the Financing, (y) does not impose in any material respect new or additional conditions or otherwise expand materially on the conditions to the Financing or (z) is not reasonably expected to materially hinder or delay Closing. In the event any portion of the Financing becomes unavailable on the Financing Terms for any reason whatsoever, as promptly as practicable following the occurrence of such event, Purchaser and Parent shall arrange to obtain alternative financing from alternative sources (i) on terms and conditions no less favorable to Parent or Purchaser than the Financing Terms (including as to economic terms, flex provisions and funding conditions) in an amount sufficient to replace the financing contemplated by such unavailable financing commitments and (ii) that would not materially hinder or delay Purchaser’s ability to consummate the transactions contemplated by this Agreement in a timely manner, but in no event later than December 31, 2010 (the “Alternate Financing”). Parent or Purchaser shall give Agent prompt notice of any change in the Financing

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Terms or any indication that the Financing or Alternate Financing may not be available to Purchaser. Parent and Purchaser shall keep Agent informed on a reasonably current basis in reasonable detail of the status of their efforts to arrange the Financing or Alternate Financing, as applicable; provided that Parent and Purchaser shall be under no obligation to disclose any information that is subject to attorney client or similar privilege. Notwithstanding the foregoing, compliance by Parent and Purchaser with this Section 5.8 shall not relieve Purchaser of its obligation to consummate the transactions contemplated by this Agreement whether or not the Financing or the Alternate Financing is available, and shall not in any way limit Sellers’ recourse under Section 6.6 in the event that Closing does not occur if the Financing or the Alternate Financing is not available.

5.9 Cooperation in Securing Financing

During the Interim Period, upon request of Purchaser or Parent, acting reasonably, each Seller shall, and shall cause the LJVH Group Members to, use commercially reasonable efforts to cooperate in connection with the arrangement and obtaining of the Financing or the Alternate Financing by Purchaser and/or Parent, including (i) providing to Purchaser or Parent from time to time information regarding the LJVH Group Members reasonably requested by the lenders providing the Financing or the Alternate Financing, (ii) participating in a reasonable number of meetings and due diligence sessions in connection with the Financing or the Alternate Financing and (iii) as promptly as practical after Parent’s request, furnishing Parent and its financing sources all information and disclosures reasonably requested by Parent to assist with preparation of customary marketing documents. Sellers shall ensure that the LJVH Group Members consent to the use of their logos in connection with the Financing or Alternate Financing. Purchaser shall, promptly upon written request by the LJVH Group Members, reimburse the LJVH Group Members for all out-of-pocket costs incurred by the LJVH Group Members in connection with any actions taken pursuant to this Section 5.9 if Closing does not occur.

5.10 Exclusive Dealing; No Transfer or Encumbrance.

(a) From and after the date of this Agreement and until the earlier to occur of the Closing Date or the termination of this Agreement pursuant to Sections 6.3 or 6.5, as applicable, Sellers shall not, and shall cause their respective Affiliates (including parent entities) as well as the LJVH Group Members and the officers and directors of the LJVH Group Members and any Persons acting on behalf of the LJVH Group Members, Sellers or their Affiliates (including parent entities), not to, directly or indirectly, encourage, solicit, submit for board or other similar management group consideration or approval, consider, engage in discussions or negotiations with, or provide any information to, any Person or group (other than Purchaser or its representatives) concerning any (i) merger, consolidation or similar transaction, (ii) sale, lease or other substantial disposition of assets, or (iii) issuance, sale or other disposition of shares in the capital of Corporation, LJVH Group Member Securities or other securities (or options, rights or warrants to purchase, or securities convertible into, such securities), in the case of each of (i), (ii) and (iii) involving any LJVH Group Member. Sellers shall promptly (in any case within 24 hours) notify Purchaser of any inquiries or communications

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concerning any such transaction which any of them may receive or of which they may become aware, including the principal terms thereof.

(b) Other than in accordance with the terms of this Agreement, without the prior written consent of Purchaser, Sellers agree to not, and agree that their Affiliates (including parent entities) shall not, directly or indirectly, sell, pledge, assign, transfer, encumber or otherwise dispose of (including by merger, consolidation or otherwise by operation of law), or enter into any contract, options or other arrangement or understanding with respect to the direct or indirect assignment, transfer, encumbrance or other disposition of (including by merger, consolidation or otherwise by operation of law) any share or other securities of any LJVH Group Member.

5.11 Financial Statements.

During the Interim Period, within twenty (20) days after the end of each fiscal period, Sellers shall cause Corporation to provide Purchaser with copies of Corporation’s consolidated interim financial statements, which shall be in the same form as made available to Purchaser or Parent prior to the date hereof with respect to prior fiscal periods. Such interim financial statements (including, if applicable, the notes thereto, if any) shall (a) be in accordance with the Books and Records and (b) be prepared in accordance with Canadian GAAP, except as may be noted in reasonable detail therein.

5.12 Waiver and Release.

(a) From and after Closing, each Seller who is not a current or former employee, director or officer of a LJVH Group Member hereby releases and forever discharges the LJVH Group Members and their respective directors, officers, shareholders, employees, agents, representatives, subsidiaries, Affiliates, successors and assigns of and from any and all claims, demands, actions, causes of action, liabilities, damages, expenses and suits of every kind, character and description, known or unknown, at law or in equity, which such Seller may have had at any time heretofore, may have now or may have at any time hereafter, arising from, relating to, resulting from or in any manner incidental to any and every matter, thing or event whatsoever occurring or failing to occur at any time in the past up to and including the date of this Agreement and, by receipt of the consideration to be received by such Seller at Closing, up to and including Closing, including matters relating to (i) the LJVH Group Members or (ii) the share capital of Corporation, the Purchased Shares, the LJVH Group Member Securities or any other ownership interest in any LJVH Group Member.

(b) From and after Closing, each Seller who is a current or former employee, director or officer of a LJVH Group Member hereby releases and forever discharges the LJVH Group Members and their respective directors, officers, shareholders, employees, agents, representatives, subsidiaries, Affiliates, successors and

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assigns of and from any and all claims, demands, actions, causes of action, liabilities, damages, expenses and suits of every kind, character and description, known or unknown, at law or in equity, which such Seller may have had at any time heretofore, may have now or may have at any time hereafter, arising from, relating to, resulting from or in any manner incidental to any and every matter, thing or event whatsoever occurring or failing to occur at any time in the past up to and including the date of this Agreement and, by receipt of the consideration to be received by such Seller at Closing, up to and including Closing, exclusively with respect to matters relating to, resulting from or in any manner incidental to the Purchased Shares or the Options.

5.13 Other Covenants.

(a) Sellers shall cause each of Van Houtte L.P. and Van Houtte Coffee Services L.P. to request and obtain from the Canada Revenue Agency consent to change its fiscal year end so that its current fiscal year ends immediately prior to Closing and to implement such changes.

(b) At the request of Purchaser, prior to Closing, Sellers shall cause the intercompany account between Van Houtte Group Inc. (or any successor thereto) and Van Houtte L.P. to be settled in such manner as directed by Purchaser acting reasonably, such that immediately prior to Closing there shall be no amount outstanding between Van Houtte Group Inc. (or any successor thereto) and Van Houtte L.P., provided that the proposed manner of settlement shall not prejudice the Sellers or the LJVH Group Members.

ARTICLE 6

CONDITIONS OF CLOSING

6.1 Conditions of Closing.

Purchaser on the one hand, and Sellers on the other hand, shall use commercially reasonable efforts, subject to Section 5.7, to procure the satisfaction of the conditions set out in Sections 6.2 and 6.4, respectively.

6.2 Conditions for the Benefit of Purchaser.

The purchase and sale of the Purchased Shares is subject to the following conditions to be fulfilled or performed prior to Closing, which conditions are for the exclusive benefit of Purchaser and may be waived, in whole or in part, by Purchaser in its sole discretion:

(a) Truth of Representations and Warranties and Performance of Covenants. Each of:

(i) The representations and warranties of Sellers contained in this Agreement must be true and correct in all material respects as of the

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Closing Date with the same force and effect as if such representations and warranties were made on and as of such date, provided that:

(A) subject to Section 6.2(a)(i)(C), if a representation and warranty of the Sellers is qualified by materiality, it must be true and correct in all respects after giving effect to such qualification;

(B) the representations and warranties in Sections 3.1(e), 3.2(e), 3.3(d) (each, Title to Purchased Shares), 3.4(t) (Title to LJVH Group Member Securities) and 3.4(r) (Authorized and Issued Capital) shall be true and correct in all respects, except for de minimis inaccuracies;

(C) the representations and warranties in Sections 3.4(n) (Litigation) and 3.4(w)(Taxes) do not need to be true in all material respects (to the extent not qualified by materiality) and in all respects (to the extent qualified by materiality) as of the Closing Date with the same force and effect as if such representations and warranties were made on and as of such date, provided that Agent agrees in writing that Agent shall pay to Purchaser the amount of such Damages at or prior to Closing resulting from any such inaccuracies, which payment shall not affect Sellers’ obligations under Article 9; and

(D) to the extent that a representation and warranty speaks only as of a specific date, it only needs to be true and correct as of that date; and

(ii) the covenants contained in this Agreement to be performed by Sellers and Agent on or prior to the Closing Date shall have been performed in all material respects, and Purchaser shall have received a certificate from Agent, on behalf of Sellers, with respect to the representations and warranties in Section 3.4 and the covenants set forth in Article 5 with respect to Agent, Sellers and LJVH Group Members, confirming the foregoing, in form and substance reasonably satisfactory to Purchaser (the “Agent’s Closing Certificate”). Upon delivery of the Agent’s Closing Certificate, the representations and warranties of Sellers in Section 3.4 shall be deemed to be made on and as of the Closing Date and as though the Closing Date was substituted for the date hereof.

(b) Deliveries. At or prior to Closing, Agent shall deliver or cause to be delivered to Purchaser the following in form and substance satisfactory to Purchaser, acting reasonably:

(i) certificates representing the Purchased Shares duly endorsed in blank for transfer by the holders of records;

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(ii) certified copies of (i) the charter documents and by-laws of Sellers, as applicable, and LJVH Group Members (ii) all required resolutions of the shareholders and the board of directors of Sellers, as applicable, approving the entering into and completion of the transactions contemplated by this Agreement, and (iii) the resolution of the board of directors of Corporation authorizing the transfer of the Purchased Shares;

(iii) a certificate of status, compliance, good standing or like certificate with respect to Sellers, as applicable, and LJVH Group Members issued by appropriate government officials of their respective jurisdictions of incorporation;

(iv) executed resignations effective on or before Closing of each director of a LJVH Group Member unless otherwise specified in writing by Purchaser; and

(v) the Escrow Agreement duly executed by Agent.

(c) No Legal Action. No enforceable order enjoining, restricting or prohibiting any of the transactions contemplated by this Agreement shall have been rendered by any Governmental Entity.

(d) Regulatory Approval. Competition Act Approval, ICA Approval and HSR Clearance shall have each been obtained.

(e) Termination of Certain Agreements. The LJ Services Agreement shall have been terminated effective on or prior to the Closing Date and there shall be no liabilities or obligations to be performed or satisfied under the LJ Services Agreement by any LJVH Group Member as of Closing.

(f) No Material Adverse Effect. Between the date of this Agreement and the Effective Time, there shall not have occurred a Material Adverse Effect.

6.3 Termination by Purchaser.

Purchaser may terminate this Agreement by notice in writing to Agent:

(a) if any representation and warranty of a Seller herein fails to be true and correct such that the condition set forth in Section 6.2(a)(i) would not be satisfied or any Seller breaches, or fails to comply with, his, her or its covenants or obligations herein such that the condition set forth in Section 6.2(a)(ii) would not be satisfied, and, in each case, such failure or breach either cannot be cured or continues uncured for ten (10) Business Days (or until the Termination Date if shorter) after the date on which Purchaser provides Agent with written notice of such failure or breach, except if such Seller can reasonably expect to cure such failure or breach prior to the Termination Date (and such Seller confirms in writing to Purchaser that such Seller is continuing to exercise reasonable best efforts to cause such failure or breach to be cured), Purchaser may not terminate this

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Agreement on account of such failure or breach prior to the Termination Date (and then, Purchaser may only terminate this Agreement to the extent that such failure or breach is not cured on the Termination Date);

(b) upon the earlier of (x) the date a Final Decision is rendered and (y) the Termination Date, if the condition set forth in Section 6.2(d) is not met on or prior to such date; provided, however, that if no Final Decision has been rendered on or prior to the Termination Date and the condition set forth in Section 6.2(d) is not met on or prior to such date, the Termination Date shall be automatically extended to March 31, 2011. If Competition Act Approval and HSR Clearance have not each been obtained on or prior to March 31, 2011 (or, as regards Competition Act Approval, has not been waived by Purchaser), then Purchaser shall be entitled to terminate this Agreement pursuant to this Section 6.3(b). If Purchaser terminates this Agreement pursuant to this Section 6.3(b), Parent shall pay to Agent the Termination Fee within two (2) Business Days following such termination, by way of wire transfer of immediately available funds to an account designated by Agent one (1) Business Day after Agent has received written notice that Purchaser has terminated this Agreement in accordance with this Section 6.3(b), and, in such circumstances, payment of the Termination Fee shall be the exclusive remedy of Sellers with respect to the termination of this Agreement pursuant this Section 6.3(b);

(c) if any of the conditions set forth in Section 6.2 (other than those covered in Sections 6.3(a) and 6.3(b)) have not been fulfilled in all material respects or waived on or prior to the Termination Date, except if Agent can reasonably expect to cause a Material Adverse Effect which occurs to no longer constitute a Material Adverse Effect prior to the Termination Date (and Agent and Sellers confirm in writing to Purchaser that Agent and Sellers are continuing to exercise reasonable best efforts to cause such Material Adverse Effect to no longer constitute a Material Adverse Effect), Purchaser may not terminate this Agreement on account of such Material Adverse Effect prior to the Termination Date (and then, Purchaser may only terminate this Agreement to the extent that such fact, circumstance or condition still constitutes a Material Adverse Effect on the Termination Date);

(d) if Closing has not occurred on or prior to the Termination Date and all of the conditions set forth in Section 6.2 have been satisfied (other than those conditions which by their nature are to be satisfied by actions taken at Closing) or waived on or before the Termination Date; or

(e) by the mutual written consent of Agent, on the one hand, or Purchaser or Parent, on the other hand;

in each case, (other than as contemplated in (d) above) provided, however, that Purchaser shall not be entitled to terminate this Agreement if the failure or impossibility of satisfaction of the condition was as a result of a breach by Purchaser or Parent of any of their obligations under this Agreement.

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Upon termination of this Agreement by Purchaser pursuant to this Section 6.3 and subject to, if applicable, the payment of the Termination Fee or the Reverse Termination Fee, Purchaser shall be released from all of its obligations under this Agreement save and except for its obligations under, and the provisions of, Article 9 and Sections 4.1(h), 5.2(e), 10.3, 10.5 and 10.15.

If Purchaser waives compliance with any of the conditions, obligations or covenants contained in this Agreement, the waiver will be without prejudice to any of its rights of termination in the event of non-fulfillment, non-observance or non-performance of any other condition, obligation or covenant in whole or in part. Purchaser’s right of termination under this Article 6 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. Except as otherwise provided herein, nothing in Article 6 shall limit or affect any other rights or causes of action Purchaser may have with respect to the representations, warranties and covenants in its favour contained in this Agreement.

6.4 Conditions for the Benefit of Sellers.

The purchase and sale of the Purchased Shares is subject to the following conditions to be fulfilled or performed prior to Closing, which conditions are for the exclusive benefit of Sellers and may be waived, in whole or in part, by Agent, in its sole discretion:

(a) Truth of Representations and Warranties and Performance of Covenants. Each of:

(i) the representations and warranties of Purchaser contained in this Agreement must be true and correct in all material respects as of the Closing Date with the same force and effect as if such representations and warranties were made on and as of such date, provided that if a representation and warranty is qualified by materiality, it must be true and correct in all respects after giving effect to such qualification. To the extent that a representation and warranty speaks only as of a specific date, it only needs to be true and correct as of that date; and

(ii) the covenants contained in this Agreement to be performed by Purchaser on or prior to the Closing Date shall have been performed in all material respects,

and Sellers shall have received a certificate confirming the foregoing, signed by a senior officer or director of Purchaser, in form and substance reasonably satisfactory to Sellers (the “Purchaser’s Closing Certificate”). Upon delivery of Purchaser’s Closing Certificate, the representations and warranties of Purchaser shall be deemed to be made on and as of the Closing Date and as though Closing Date was substituted for the date hereof.

(b) Deliveries. At or prior to Closing, Purchaser shall deliver or cause to be delivered to Sellers the following in form and substance satisfactory to Sellers, acting reasonably:

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(i) the Escrow Agreement duly executed by Purchaser;

(ii) certified copies of (i) the charter documents and by-laws of Purchaser, (ii) all required resolutions of the shareholders and the board of directors of Parent and Purchaser approving the entering into and completion of the transactions contemplated by this Agreement;

(iii) a certificate of status, compliance, good standing or like certificate with respect to Parent and Purchaser issued by appropriate government officials of its jurisdiction of incorporation; and

(iv) the Purchase Price payable at Closing in the manner set forth in Section 2.2.

(c) No Legal Action. No enforceable order enjoining, restricting or prohibiting any of the transactions contemplated by this Agreement shall have been rendered by any Governmental Entity.

(d) Regulatory Approval. ICA Approval and HSR Clearance shall have each been obtained, and the waiting period under Section 123 of the Competition Act has expired, been terminated or waived in accordance with the Competition Act.

6.5 Termination by Agent.

Agent may terminate this Agreement by notice in writing to Purchaser:

(a) if any representation and warranty of Purchaser or Parent herein fails to be true and correct such that the condition set forth in Section 6.4(a)(i) would not be satisfied or any of Purchaser or Parent breaches, or fails to comply with its covenants and obligations herein such that the condition set forth in Section 6.4(a)(ii) would not be satisfied, and, in each case, such failure or breach either cannot be cured or continues uncured for ten (10) Business Days (or until the Termination Date if shorter) after the date on which Agent provides Parent with written notice of such failure or breach, except if Purchaser or Parent can reasonably expect to cure such failure or breach prior to the Termination Date (and Purchaser or Parent confirms in writing to Agent that Purchaser and Parent are continuing to exercise reasonable best efforts to cause such failure or breach to be cured), Agent may not terminate this Agreement on account of such failure or breach prior to the Termination Date (and then, Agent may only terminate this Agreement to the extent that such failure or breach is not cured on the Termination Date);

(b) upon the earlier of (x) the date a Final Decision is rendered and (y) the Termination Date, if Competition Act Approval, ICA Approval and HSR Clearance have not each been obtained on or prior to such date; provided, however, that if no Final Decision has been rendered on or prior to the Termination Date and Competition Act Approval, ICA Approval and HSR Clearance have not each been obtained on or prior to such date, the Termination

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Date shall be automatically extended to March 31, 2011. If Competition Act Approval and HSR Clearance have not each been obtained on or prior to March 31, 2011, then Agent shall be entitled to terminate this Agreement pursuant to this Section 6.5(b). If Agent terminates this Agreement pursuant to this Section 6.5(b), Parent shall pay to Sellers the Termination Fee within two (2) Business Days following such termination, by way of wire transfer of immediately available funds to an account designated by Agent one (1) Business Day after Agent has terminated this Agreement in accordance with this Section 6.5(b), and, in such circumstances, payment of the Termination Fee shall be the exclusive remedy of Sellers with respect to a termination of this Agreement pursuant this Section 6.5(b);

(c) if any of the conditions set forth in Section 6.4 (other than those covered in Section 6.5(a)) have not been fulfilled in all material respects or waived on or prior to the Termination Date;

(d) if Closing has not occurred on or prior to the Termination Date and all of the conditions set forth in Section 6.2 have been satisfied (other than those conditions which by their nature are to be satisfied by actions taken at Closing) or waived on or prior to the Termination Date, provided that, with respect to Section 6.2(f), such condition shall only be deemed to not have been satisfied if the occurrence of the Material Adverse Effect gives Purchaser the right to terminate this Agreement pursuant to Section 6.3(c); or

(e) by the mutual written consent of Agent, on the one hand, or Purchaser or Parent, on the other hand,

in each case, provided, however, that Agent shall not be entitled to terminate this Agreement if the failure or impossibility of satisfaction of the condition was as a result of the breach by Sellers of any of their obligations under this Agreement.

Upon termination of this Agreement by Agent pursuant to this Section 6.5, Sellers shall be released from all of their obligations under this Agreement save and except for (i) their obligations under, and the provisions of, Article 9 and Sections 3.1(g), 3.2(f), 3.3(f), 10.3, 10.5 and 10.15 and (ii) Damages in respect of breaches under this Agreement on or prior to the Termination Date, which, in each case, shall survive any termination of this Agreement.

If Agent waives compliance with any of the conditions, obligations or covenants contained in this Agreement, the waiver will be without prejudice to any of its rights of termination in the event of non-fulfillment, non-observance or non-performance of any other condition, obligation or covenant in whole or in part. Agent’s right of termination under this Article 6 is in addition to any other rights it or Sellers may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. Except as otherwise provided herein, nothing in Article 6 shall limit or affect any other rights or causes of action Sellers may have with respect to the representations, warranties and covenants in its favour contained in this Agreement.

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6.6 Reverse Termination Fee.

In the event that:

(a) Agent terminates this Agreement pursuant to Section 6.5(a);

(b) Agent terminates this Agreement pursuant to Section 6.5(d); or

(c) Purchaser terminates this Agreement pursuant to Section 6.3(d),

then, Parent or Purchaser shall pay to Sellers $91,500,000 (the “Reverse Termination Fee”) within two (2) Business Days following such termination, by way of wire transfer of immediately available funds to an account designated by Agent one (1) Business Day after (i) Agent has delivered written notice to Purchaser that Agent has terminated this Agreement in accordance with this Section 6.6 or (ii) Agent has received written notice that Purchaser has terminated this Agreement in accordance with this Section 6.6, and, in such circumstance, without modifying or qualifying in any way Section 9.11 or implying any intent contrary to Section 9.11, such payment of the Reverse Termination Fee shall be the sole and exclusive remedy of Sellers with respect to any termination of this Agreement.

ARTICLE 7

CLOSING

7.1 Date, Time and Place of Closing.

The completion of the transactions of purchase and sale contemplated by this Agreement shall take place at the offices of Stikeman Elliott LLP, 1155 René-Lévesque Blvd. West, 40^th Floor, Montreal, Quebec, Canada, H3B 3V2, at the Effective Time on the Closing Date or at such other place, on such other date and at such other time as may be agreed upon in writing between Agent and Purchaser.

ARTICLE 8

POST-CLOSING COVENANTS

8.1 Books and Records.

For a period of six (6) years from Closing, Purchaser shall maintain and make available to Sellers the Books and Records (or, if practicable, the relevant points thereof) for inspection and copying (at Sellers’ expense, provided that there shall be no mark-up of Purchaser’s actual cost). If it is not practicable to make available only the relevant parts of such Books and Records, Sellers shall furnish such undertaking as to confidentiality as Purchaser may reasonably require prior to receiving access to such Books and Records.

8.2 Further Assurances.

Each of the Sellers and the Agent, on the one hand, and Purchaser and Parent, on the other hand, upon the request of the other, whether at or after Closing, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further conveyances, transfers, assignments, recordals and other assurances as may be

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reasonably required to effectively transfer the Purchased Shares to Purchaser and carry out the intent of this Agreement.

8.3 Tax Matters.

(a) Amended Tax Returns. Notwithstanding anything to the contrary in this Agreement, none of Purchaser or the LJVH Group Members shall file any amended Tax return relating to any of the LJVH Group Members (or otherwise change such Tax returns) or make an election with respect to taxable periods ending on or prior to the Closing Date relating to any of the LJVH Group Members without a written consent of Agent, unless required to do so by Law. Notwithstanding the foregoing, Sellers and Purchaser agree, that Purchaser, in its sole discretion, may cause each and any LJVH Group Member to make an election pursuant to subsection 256(9) of the ITA in respect of its taxation year ending on the acquisition of control of the Corporation by Purchaser.

(b) Refunds. Any refunds of the Taxes (or credit for overpayment of Taxes) (other than refunds or credits (i) attributable to carrybacks from Post-Closing Tax Periods required by applicable Law or (ii) taken into account in reducing sales Taxes in the determination of the Closing Tax Amount) of the LJVH Group Members including any interest actually received (or credited) with respect thereto from the applicable taxing authorities for any Pre-Closing Tax Period (including without limitation, refunds arising from amended returns filed after the Closing Date) but excluding any amounts taken into account in calculating the Closing Tax Adjustment shall be for the account of Sellers and, if received (or credited except where the refund is credited or otherwise set-off against Taxes of the same nature that would otherwise constitute Indemnifiable Taxes) by Purchaser or any of the LJVH Group Members shall be paid, net of any Tax costs incurred or accrued on account of the receipt of such refund by the LJVH Group Members (including, for the avoidance of doubt, net of Tax costs incurred or accrued as a result of a correlative or similar adjustment relating to such refund or credit) and any out-of-pocket costs incurred in connection with such receipt, to Agent (on behalf of Sellers) within ten (10) calendar days after Purchaser or any of the LJVH Group Members receives such refund (or is credited with such over payment). Purchaser may not elect (or cause the LJVH Group Members to elect) to carry back losses from a Post-closing Tax Period to a Pre-Closing Tax Period. Any refunds or credits of Taxes of the LJVH Group Members for any Straddle Period shall be apportioned between Sellers and Purchaser based upon the principles set forth in Section 8.3(e), which generally include a hypothetical closing of the taxable year on such Closing Date with the Closing Date being included in the pre-Closing portion of such Straddle Period (except to the extent of any extraordinary actions taken by Purchaser after Closing on the Closing Date); provided, however, real and personal property Taxes (which are not based on income) shall be determined by reference to the relative number of days in the pre-Closing and post-Closing portions of such Straddle Period. At the request of Agent, Purchaser shall use commercially reasonable efforts to cause the LJVH Group Members to pursue claims for refunds for Pre-Closing Tax Periods

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provided such efforts shall be consistent with past practices of the LJVH Group Members and provided such efforts, in the opinion of Purchaser acting reasonably, would not prejudice or have adverse consequences for Purchaser, Parent or any LJVH Group Member.

(c) Section 338 Election. Purchaser shall not make an election pursuant to Section 338(g) of the United States Internal Revenue Code of 1986, as amended (the “Code”) or a similar election under any foreign, state or local laws, with respect to the purchase of Corporation or any LJVH Group Members.

(d) Transfer Taxes. Purchaser shall be responsible, indemnify and hold Sellers harmless for all transfer, documentation, sales, use, stamp, registration, and similar Taxes incurred in connection with this Agreement or any transaction contemplated hereby. Purchaser shall also be responsible for the preparation and filing of Tax Returns (including any documentation) with respect to such Taxes.

(e) Straddle Periods. In the case of any Straddle Period, the amount of Taxes of LJVH Group Members based upon, or measured by, net income or gain, or that are triggered by the occurrence of activities or events for the Pre-Closing Tax Period will be determined based on an interim closing of the books as of the end of the Closing Date (and for such purpose, the taxable period of any partnership or other pass through entity in which any LJVH Group Member holds a beneficial interest will be deemed to terminate at such time), provided that exemptions, allowances or deductions that are calculated on an annual or periodic basis (such as deductions for depreciation and real estate Taxes) will be apportioned between such two (2) taxable years or periods on a daily basis. The amount of Taxes (other than Taxes of LJVH Group Members based upon, or measured by, net income or gain) for a Straddle Period which relate to the Pre-Closing Tax Period will be deemed to be the amount of such Taxes for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period.

(f) Cooperation Regarding Tax Matters. Agent and Purchaser shall cooperate fully, as and to the extent reasonably requested (including, for the avoidance of doubt, by providing, causing to be provided or inquiring of third parties for, such records or information as is reasonably requested) by one another, in connection with the preparation and filing of any Tax Returns, and any audit, litigation or other proceedings with respect to such Tax Returns, relating to LJVH Group Members. The party requesting such cooperation shall pay the reasonable out-of-pocket expenses of the cooperating parties.

(g) Closing. If Closing does not occur on or prior to December 31, 2010, then Purchaser shall not, and shall cause the LJVH Group Members not to, take any action that would result in a sale, transfer, distribution, restructuring or disposition (whether actual or deemed) of any of the assets of any LJVH Group Member, or that would generate earnings and profits (for US federal income tax purposes) for any of the LJVH Group Members, during the taxable year (for US

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federal income tax purposes), assuming the accuracy of the representation in Section 3.4(w)(xxii), of Corporation that includes the Closing Date, except in all cases with respect to an amalgamation of Purchaser or an Affiliate of Purchaser with Corporation as described in Section 8.4(a) below, except in all cases for the operation of the Business in the Ordinary Course and except as required pursuant to any contract, obligation or other agreement entered into by Sellers or any LJVH Group Member prior to Closing.

8.4 Bump Covenants and Representation.

(a) Each Seller acknowledges (without liability resulting therefrom except as may arise as a result of a breach of covenants set forth in this Agreement) that the intention of Purchaser, following Closing, is to amalgamate Purchaser or an Affiliate of Purchaser with Corporation in the manner described in subsection 87(11) of the ITA (the amalgamated corporation being referred to in this Section 8.4 as “Amalco”), and then to make designations pursuant to paragraph 88(1)(d) of the ITA in respect of the issued and outstanding shares of any directly held corporate subsidiaries and the limited partnership interests in each of Van Houtte Coffee Services LP and Van Houtte LP owned by Amalco at such time such that the cost to Amalco of such property will be determined in accordance with paragraph 88(1)(c) of the ITA including an addition to the cost determined under paragraph 88(1)(d) of the ITA.

(b) Each of FSTQ, Luxco and Littlejohn Fund III, L.P. (each, a “Key Shareholder”) covenants that it will not, and will ensure that each Person who is related (within the meaning and as used for the purposes of the ITA) to such Key Shareholder or who is an Affiliate of such Key Shareholder (a “Related Person”), other than, in respect of FSTQ, an FSTQ Portfolio Corporation, will not, own during the period beginning immediately after Closing and ending twenty-four (24) months thereafter (the, “Prohibited Period”):

(i) any share or debt of Purchaser (or any successor thereto including Amalco) or Parent;

(ii) any right to, or interest in, or option in respect of any property described directly above; or

(iii) any property that is a Prohibited Property where such Key Shareholder or Related Person, as the case may be, had knowledge that such property was a Prohibited Property at the time the property was acquired by such Key Shareholder or Related Party, as the case may be,

other than:

(iv) any property that was acquired by such Key Shareholder or a Related Party in respect of such Key Shareholder, as the case may be, prior to the time at which such Key Shareholder had knowledge of the specific transaction contemplated by this Agreement; and

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(v) with respect to FSTQ, any securities, rights, interest or property described in (i) to (iii) above that are acquired by an external asset or fund manager on behalf of FSTQ, where such external manager has discretionary authority in respect of the assets of FSTQ that it manages and is not, in any circumstances, subject to any control or direction by FSTQ (other than broad investment guidelines established by FSTQ in connection with the engagement of the manager).

(c) Each Key Shareholder covenants that it will use reasonable efforts to ensure that each Person with whom such Key Shareholder does not deal at arm’s length (within the meaning of the ITA) and including, in respect of FSTQ, an FSTQ Controlled Portfolio Corporation (a “Restricted Person”), other than a Related Person to which Section 8.4(b) above applies or in respect of FSTQ, an FSTQ Non-Controlled Portfolio Corporation, will not own, during the Prohibited Period:

(i) any share or debt of Purchaser (or any successor thereto including Amalco) or Parent;

(ii) any right to, or interest in, or option in respect of any property described directly above; or

(iii) any property that is a Prohibited Property where such Restricted Person had knowledge that such property was a Prohibited Property at the time the property was acquired by such Restricted Person;

other than:

(iv) any property that was acquired by a Restricted Person in respect of such Key Shareholder prior to the time at which such Key Shareholder had knowledge of the specific transaction contemplated in this Agreement.

(d) Each Key Shareholder represents and warrants that it has not directed or influenced, and covenants that it will not, during the Prohibited Period, direct or influence, the acquisition by any corporation that meets the description in clause 88(1)(c)(vi)(B)of the ITA (other than a Related Person of such Key Shareholder to which Section 8.4(b) applies or a Restricted Person in respect of such Key Shareholder to which Section 8.4(c) applies) of:

(i) any share or debt of Purchaser (or any successor thereto including Amalco) or Parent;

(ii) any right to, or interest in, or option in respect of any property described directly above; or

(iii) any property that is a Prohibited Property, where such Key Shareholder had knowledge that such property was a Prohibited Property at the time

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the direction was made or the influence was exercised, as the case may be;

other than

(iv) any property that was acquired by such corporation prior to the time at which such Key Shareholder had knowledge of the specific transaction contemplated by this Agreement.

(e) FSTQ represents and warrants that it has not directed or influenced, and covenants that it will not, during the Prohibited Period, direct or influence, the acquisition by any FSTQ Non-Controlled Portfolio Corporation of:

(i) any share or debt of Purchaser (or any successor thereto including Amalco) or Parent;

(ii) any right to, or interest in, or option in respect of any property described directly above; or

(iii) any property that is a Prohibited Property, where FSTQ had knowledge that such property was a Prohibited Property at the time the direction was made or the influence was exercised, as the case may be;

other than

(iv) any property that was acquired by such corporation prior to the time at which FSTQ had knowledge of the specific transaction contemplated by this Agreement.

(f) Sellers represent and warrant to and in favour of the Purchaser and acknowledge that Purchaser is relying upon such representation and warranty in connection with the entering into of this Agreement that the Management Sellers (excluding Jean-Yves Monette and Pierre Brodeur), either individually or collectively, do not own, directly or indirectly, and at no time since July 19, 2007 have owned, directly or indirectly, ten percent (10%) or more of the issued shares of any class or series of the capital stock of the Corporation (or any predecessor corporation to the Corporation) on a basic or fully diluted basis.

(g) For the purposes of this Section 8.4(g), the provisions of subparagraph 88(1)(c.2)(ii) of the ITA shall apply to any partnership or trust.

8.5 Tail Insurance.

For a period of six (6) years from and after the Closing Date, Purchaser shall, at its cost, cause to be maintained (either directly or via run off insurance or insurance provided by an alternate provider) the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by Corporation and the LJVH Group Members with respect to claims arising from facts or events that occurred on or before the Closing Date.

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8.6 Confidentiality.

(a) Each Seller acknowledges that the success of the LJVH Group Members after Closing depends upon the continued preservation of the confidentiality of certain information possessed by such Seller, that the preservation of the confidentiality of such information by such Seller is an essential premise of the bargain between Sellers and Purchaser, and that Purchaser would be unwilling to enter into this Agreement in the absence of this Section 8.6. Accordingly, each Seller hereby agrees with Purchaser that such Seller and its representatives will not, and that such Seller will cause its Affiliates not to, at any time on or after the Closing Date, directly or indirectly, without the prior written consent of Purchaser, disclose or use, any confidential or proprietary information involving or relating to the Business; provided, however, that the information subject to the foregoing provisions of this sentence will not include any information generally available to, or known by, the public (other than as a result of disclosure in violation hereof); and provided, further, that the provisions of this Section 8.6 will not prohibit any retention of copies of records or disclosure (i) required by any applicable Law so long as reasonable prior notice is given of such disclosure and a reasonable opportunity is afforded to contest the same or (ii) made in connection with the enforcement of any right or remedy relating to this Agreement or the transactions contemplated by this Agreement. Each Seller agrees that such Seller will be responsible for any breach or violation of the provisions of this Section 8.6 by any of such Seller’s representatives.

(b) At or prior to Closing, Sellers and their Affiliates (other than the LJVH Group Members) will assign to a LJVH Group Member satisfactory to Purchaser any rights which such Person may have under any confidentiality agreement (or similar Contract) relating in whole or in part to the LJVH Group Members in connection with the auction process resulting in the transactions contemplated by this Agreement.

8.7 Non-Solicitation.

For a period of two (2) years following the Closing Date, each Seller will not, and will cause its Affiliates not to, directly or indirectly recruit, offer employment to, employ, engage as a consultant, lure or entice away, or in any other manner persuade or attempt to persuade, any Person who is an employee of a LJVH Group Member or who was an employee of a LJVH Group Member as of the date of this Agreement to leave the employ of such LJVH Group Member.

8.8 Bonus Payments.

After Closing, Purchaser shall cause the LJVH Members to pay the Accrued Bonuses in accordance with the terms and conditions of the Benefit Plans applicable to such Accrued Bonuses, provided that in the event that Purchaser does not cause the payment of all of such Accrued Bonuses on or before June 30, 2011, then Purchaser shall pay to Agent an amount equal to any such Accrued Bonuses that have not been paid on or before June 30, 2011.

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ARTICLE 9

INDEMNIFICATION

9.1 Survival of Representations and Warranties.

The representations and warranties contained in this Agreement and the certificates delivered pursuant to Section 6.2(a) and Section 6.4(a) shall survive Closing and continue in full force and effect for a period of twenty-four (24) months after the Closing Date, provided, however, that the Fundamental Representations and the representations and warranties set forth in Section 3.4(w) (Tax Matters) shall survive Closing and continue in full force and effect until the date that is four (4) years and six (6) months after the Closing Date.

9.2 Indemnification in favour of Purchaser Indemnified Parties by Sellers.

Subject to the limitations set out in Sections 9.4, 9.5, 9.6 and 9.7, each Seller shall jointly (within the meaning of the Civil Code of Québec) indemnify and save Purchaser and its employees, officers, directors, shareholders, agents, representatives and Affiliates (including, following Closing, any purchaser of equity interests of a LJVH Group Member, in each case including its or their Affiliates) (the “Purchaser Indemnified Parties”) harmless of and from any Damages suffered by, imposed upon or asserted against Purchaser Indemnified Parties as a result of, in respect of, connected with, or arising out of, under, or pursuant to (i) any failure of such Seller to perform or fulfill any of its covenants under this Agreement, (ii) any breach or inaccuracy of any representation or warranty given by such Seller contained in this Agreement (in each case, with respect to the calculation of Damages for a breach of such representation or warranty, any reference therein to qualifications as to materiality, including any reference to the defined term “Material Adverse Effect”, shall be read as if such references were deleted therefrom, but not with respect to determining whether a particular breach has occurred), (iii) Indemnifiable Taxes, (iv) the Seller Pre-Closing Reorganization and (v) any Liabilities of the Amalco Entities.

9.3 Indemnification in favour of Sellers.

Subject to the limitations set out in Sections 9.4 and 9.5, Purchaser and Parent shall solidarily (within the meaning of the Civil Code of Québec) indemnify and save Sellers and their respective employees, officers, directors, shareholders, agents, representatives and Affiliates harmless of and from any Damages suffered by, imposed upon or asserted against Sellers as a result of, in respect of, connected with, or arising out of, under or pursuant to (i) any failure of Purchaser or Parent to perform or fulfil any of its covenants under this Agreement, (ii) any breach or inaccuracy of any representation or warranty given by Purchaser or Parent contained in this Agreement, (iii) any actions by Purchaser, Parent or the LJVH Group Members after Closing (provided that this Section 9.3(iii) shall not apply to Damages attributable to Taxes unless such Damages result from breaches of Section 8.3(g)), and (iv) the Purchaser Pre-Closing Reorganization.

9.4 Time Limitations.

The obligation of indemnification set out in Sections 9.2 and 9.3 shall survive Closing, except for the obligation of indemnification arising from any incorrectness in, or breach of, any

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representation or warranty made by Purchaser, Parent or any Seller, as the case may be, which in each such case shall be subject to the limitations regarding survival of representations and warranties set forth in Section 9.1 and the obligation of indemnification contained in Section 9.2(iii) with respect to Indemnifiable Taxes which shall continue in full force and effect until the date that is four (4) years and six (6) months after the Closing Date, in each case subject to claims for Damages remaining outstanding subsequent to such date for which notice under Section 9.8 was provided prior to such date.

9.5 Limitation on Damages.

The aggregate liability of Sellers and Purchaser, as the case may be, for indemnification pursuant to this Agreement shall be limited as follows:

(a) Notwithstanding anything to the contrary contained in this Agreement, to the extent that an adjustment has been made to the Purchase Price or any other payments are made hereunder in respect of any matter relating to or arising out of this Agreement (including any matter included in the calculation of Working Capital, Net Indebtedness or Closing Tax Adjustment, as well as claims for Indemnifiable Taxes and Seller Pre-Closing Reorganization), no duplicate recovery shall be available hereunder;

(b) The obligations of indemnification of Sellers shall not be applicable for a single claim for indemnification hereunder unless the Damages in respect of such single claim exceed $50,000;

(c) The obligations of indemnification of Sellers shall not be applicable until the aggregate of all claims for Damages exceed $2,000,000, after which Sellers shall be liable only for those Damages in excess of $2,000,000, provided that (A) no claim for Damages of less than $50,000 will be taken into account in determining whether the said $2,000,000 threshold has been met (it being understood that any claims for Damages arising out of the same facts or circumstances that aggregate to at least $50,000 will be taken into account in determining whether the said $2,000,000 threshold has been met), and (B) claims for Damages with respect to the following will not be subject to the limitations in Section 9.5(b) and this Section 9.5(c): (i) any breach or inaccuracy of the Fundamental Representations, (ii) claims for Damages with respect to breaches of Section 8.6 under Section 9.2(i), as well as claims for Damages under Sections 9.2(iii) – (v) and (iii) claims for Damages for fraud or criminal or wilful misconduct (collectively, the “General Indemnity Exceptions”);

(d) Notwithstanding anything to the contrary herein, the aggregate liability of Sellers to the Purchaser Indemnified Parties for claims for Damages hereunder shall not exceed the Indemnity Escrow Amount held by the Escrow Agent from time to time and such Indemnity Escrow Amount shall be the sole recourse for the Purchaser Indemnified Parties for any and all indemnification claims for Damages hereunder, provided that claims for Damages with respect to the General Indemnity Exceptions will not be subject to the foregoing limitations. Upon the earlier of (i) final disbursement of the Indemnity Escrow Amount in

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accordance with the terms and conditions of the Escrow Agreement and (ii) the date that is two (2) years after the Closing Date, no further claims for Damages may be made by the Purchaser Indemnified Parties hereunder; provided, however, that the foregoing limitation shall not apply to the General Indemnity Exceptions. Any portion of the Indemnity Escrow Amount being held in escrow by the Escrow Agent in accordance with the terms and conditions of the Escrow Agreement at the second anniversary of the Closing Date shall, subject to the terms and conditions of the Escrow Agreement, be released from escrow and paid to Agent by way of wire transfer of immediately available funds to accounts designated by Agent and, except for the General Indemnity Exceptions, upon such release, the indemnification obligations of Sellers pursuant to this Agreement shall expire and be of no further force effect;

(e) The aggregate liability of Purchaser and Parent for claims for Damages made by Sellers or Agent after Closing shall not exceed $57,450,000, except for (a) claims for Damages for any breach or inaccuracy of the Purchaser Fundamental Representations, (b) claims for Damages with respect to breach of Section 8.3(g) under Section 9.3(i), (c) claims for Damages for fraud or criminal or willful misconduct, which shall not be subject to the limitations contained in this Section 9.5(e);

(f) Any action for Damages taken by Purchaser Indemnified Parties against the Indemnity Escrow Amount shall be taken against Agent (acting on behalf of Sellers) and not Sellers. Any other actions for Damages pursuant to this Article 9 shall be brought against FSTQ and/or Agent (acting on behalf of Luxco and Sellers), subject to the limitations contained in this Article 9;

(g) The aggregate liability of Sellers to the Purchaser Indemnified Parties for claims for Damages with respect to Indemnifiable Taxes (other than claims for Damages in respect of the Tax Audit Claims) shall not exceed the amount calculated pursuant to Section 9.6 at the relevant time (the “Tax Fund”);

(h) The maximum liability of each Seller for Damages relating to the General Indemnity Exceptions that are not Individual Representations, Warranties and Covenants hereunder shall be limited to such Seller’s Allocable Portion of such Damages, provided that this Section 9.5(h) shall not prevent any claim by a Purchaser Indemnified Party from being paid out of the Indemnity Escrow Amount in accordance with the terms hereof and the Escrow Agreement;

(i) The maximum liability of each Seller for Damages relating to the General Indemnity Exceptions that are Individual Representations, Warranties and Covenants hereunder shall be limited to such Seller’s Allocable Portion of the Purchase Price;

(j) For all purposes of this Article 9, “Damages” shall be net of (i) any insurance or other recoveries actually received by the Indemnified Party or any of its Affiliates in connection with the facts giving rise to the right of indemnification, (ii) any net Tax benefit actually received by the Indemnified Party or any of its Affiliates

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arising in connection with the accrual, incurrence or payment of any such Damages, taking into account any Taxes paid or to be paid as a result of the receipt of the indemnity payment and (iii) any amounts that were taken into account in the Final Statements. To the extent a recovery or Tax benefit with respect to a Claim is actually received after Damages have already been paid with respect to such Claim, then the recovery or Tax benefit shall be an additional amount due to the payor of such Damages; and provided, however, that reductions for amounts received under this Section 9.5(j) shall be taken into account only to the extent actually received on or before the date that is five (5) years and six (6) months from the Closing Date; and

(k) Where the Purchaser Indemnified Parties or any LJVH Group Member, is, after Closing, entitled to recover from another Person (including any insurer) any amount in respect of any matter giving rise to Damages under Article 9, the Purchaser Indemnified Parties shall and shall cause the applicable LJVH Group Member to use commercially reasonable efforts to seek such recovery; provided, with respect to Taxes, that such efforts shall be consistent with the Purchaser Indemnified Parties’ tax filing and tax planning practices, determined in their reasonable discretion.

For greater certainty, the maximum aggregate amount of Damages which the Purchaser Indemnified Parties may claim pursuant to this Agreement is $57,450,000, except for: (a) claims for Damages for any breach or inaccuracy of the Fundamental Representations, (b) claims for Damages with respect to breaches of Section 8.6 under Section 9.2(i), as well as claims for Damages under Sections 9.2(iv) and (v), and (c) claims for Damages for fraud or criminal or wilful misconduct, which shall not be subject to this limitation.

9.6 Processing claims for Damages; Tax Fund.

(a) Subject to the limitations set out in this Article 9, any Claims for Damages pursuant to this Agreement shall be made first against the Indemnity Escrow Amount and any amounts that are paid from the Indemnity Escrow Amount in respect of claims for Damages relating to the Indemnifiable Taxes (other than claims for Damages in respect of the Tax Audit Claims) shall reduce, on a dollar-for-dollar basis, the Tax Fund. Subject to the limitations set out in this Article 9, any claims for Damages relating to the Tax Audit Claims and the other General Indemnity Exceptions that are paid out of the Tax Fund shall also, when paid, reduce, on a dollar-for-dollar basis, the Tax Fund by an aggregate amount equal to such claims. For greater certainty, the Tax Fund shall be available solely as a source of recovery for claims for Damages relating to the General Indemnity Exceptions.

(b) On the Closing Date, the Tax Fund shall be an amount equal to $30,000,000 and shall be reduced from time to time by an amount equal to the claims that are paid out of the Tax Fund in accordance with Section 9.6(a).

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(c) Sellers hereby acknowledge that the Purchaser Indemnified Parties shall be entitled to seek indemnity under Article 9 of this Agreement in connection with the Tax Audit Claims.

9.7 Indemnification Matters.

The Parties hereby agree and acknowledge that the indemnification obligations described in Article 9 of this Agreement shall be the sole and exclusive source of recovery for any amounts owing to the Purchaser Indemnified Parties, on the one hand, and Sellers and their respective employees, officers, directors, shareholders, agents, representatives and Affiliates, on the other hand, pursuant to Article 9.

9.8 Notification.

Promptly (or within fifteen (15) days in the case of a Third Party Claim) upon obtaining knowledge thereof, the Party seeking indemnification pursuant to this Agreement (the “Indemnified Party”) shall notify the other Party (or Agent in the case of Sellers) in writing (the “Indemnifying Party”) of any cause which the Indemnified Party has determined has given or could give rise to indemnification under this Article 9 provided that no delay on the part of the Indemnified Party in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation under this Article 9, except to the extent that such delay actually and materially prejudices the Indemnifying Party. For greater certainty, any notice for a claim for Damages made by a Purchaser Indemnified Party against the Indemnity Escrow Amount or the Tax Fund, shall be given to Agent (acting for and on behalf of the Sellers). No claim may be asserted nor may any action be commenced against an Indemnifying Party for breach of any representation, warranty or covenant contained herein, unless such written notice of such claim or action is received by the Indemnifying Party describing the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation, warranty or covenant on which such claim or action is based ceases to survive as set forth in this Agreement, irrespective of whether the subject matter of such claim or action shall have occurred before or after such date.

9.9 Defense of Third Party Claim.

(a) If any legal proceeding shall be instituted or any claim or demand shall be asserted by a third party against the Indemnified Party (each, a “Third Party Claim”), then the Indemnifying Party or Agent in the case of Sellers (the “Defending Party”) shall have the right, after receipt of the Indemnified Party’s notice under Section 9.8 and upon giving notice to the Indemnified Party within thirty (30) Business Days of such receipt, to defend the Third Party Claim (provided that the Defending Party shall not settle or compromise any Third Party Claim without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned or delayed, unless the Third Party Claim is solely for the payment of money) at its own cost and expense with counsel of its own selection, provided that:

(i) the Indemnified Party, or Agent in the case of Sellers, shall at all times have the right to fully participate in the defense at its own expense, and

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the Indemnifying Party shall reasonably cooperate with the Indemnified Party in connection with such participation; and

(ii) the Third Party Claim seeks only monetary damages and does not (A) seek any injunctive or other relief against the Indemnified Party, (B) involve a purported class action, (C) involve any issue relating to or otherwise arising in connection with Taxes (which Third Party Claims will instead be governed by Section 9.13), (D) involve a claim whose recourse is limited to the Indemnity Escrow Amount that Purchaser reasonably determines is likely to exceed the remaining amounts in the Indemnity Escrow Amount, or (E) present a situation with respect to which Purchaser reasonably determines it would be inappropriate for a single counsel to represent all parties under applicable standards of legal ethics.

(b) If the Indemnifying Party fails within thirty (30) Business Days from receipt of the notice of a Third Party Claim to give notice of its intention to defend the Third Party Claim in accordance with Section 9.8, then the Indemnifying Party shall be deemed to have waived its right to defend the Third Party Claim and the Indemnified Party shall have the right (but not the obligation) to undertake or to cause the Indemnifying Party to undertake the defence of the Third Party Claim and compromise and settle the Third Party Claim on behalf, for the account and at the risk and expense of the Indemnifying Party, provided that such Third Party Claim may not be settled or compromised by the Indemnified Party without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld, conditioned or delayed.

(c) Where the defence of a Third Party Claim is being undertaken and controlled by the Defending Party, the Indemnified Party will use its reasonable efforts to make available to the Defending Party those employees whose assistance, testimony or presence is necessary to assist the Defending Party in evaluating and defending any such claims.

(d) With respect to any Third Party Claim, the Indemnified Party shall make available to the Defending Party or its representatives on a timely basis all documents, records and other materials in the possession of the Indemnified Party, reasonably required by the Defending Party for its use in defending any such claim and shall otherwise cooperate on a timely basis with the Defending Party in the defence of such claim.

9.10 Payments.

(a) Any amount due to Sellers from Purchaser pursuant to this Article 9 shall be paid by Purchaser to Agent (for the benefit of Sellers) not later than five (5) Business Days following the final determination of an indemnification claim by way of wire transfer of immediately available funds to an account designated by Agent. Any amount due to Purchaser Indemnified Parties from Sellers pursuant to this Article 9 shall be paid (i) in accordance with the terms of the Escrow

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Agreement to the extent such amounts are paid from the Indemnity Escrow Amount and (ii) by the Indemnifying Party not later than five (5) Business Days following final determination of an indemnification claim by way of wire transfer of immediately available funds to an account designated by the applicable Purchaser Indemnified Party.

(b) Except to the extent inconsistent with applicable Law, any amounts payable under this Article 9 shall be deemed to be adjustments to the Purchase Price.

9.11 Remedies.

The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed by Sellers or Agent in accordance with their specific terms or are otherwise breached by Sellers or Agent. It is accordingly agreed that, prior to the earlier to occur of the Closing and the termination of this Agreement in accordance with Article 6, Purchaser and Parent shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by Sellers or Agent and to enforce specifically the terms and provisions of this Agreement against Sellers and Agent, this being in addition to any other remedy to which Purchaser and Parent are entitled at law or in equity.

Each Seller and Agent acknowledges and agrees that, notwithstanding any breach of this Agreement by Purchaser or Parent prior to the earlier to occur of the Closing and the termination of this Agreement in accordance with Article 6 (each, a “Purchaser Pre-Closing Breach”), neither such Seller nor Agent (nor any of their Affiliates) shall be entitled to an injunction or injunctions to prevent any Purchaser Pre-Closing Breaches, or to enforce specifically the terms and provisions of this Agreement or otherwise to obtain any equitable relief or remedy against Purchaser or Parent with respect to any Purchaser Pre-Closing Breaches and that the sole and exclusive remedies of any Seller Group Member with respect to any such Purchaser Pre-Closing Breaches shall be either (i) payment of the Reverse Termination Fee to the extent Section 6.6 is applicable or (ii) payment of the Termination Fee in the case of a termination of this Agreement under Section 6.3(b) or Section 6.5(b).

Upon payment of the Reverse Termination Fee or the Termination Fee, as applicable, none of the Purchaser Indemnified Parties or the Purchaser Financing Group Members shall have any further liability or obligation to the Seller Group Members relating to or arising out of this Agreement, the other agreements or transactions contemplated hereby or thereby, or any debt commitment letters by any Purchaser Financing Group Member (the “Debt Commitment Letters”) under any theory or with respect to any Claim, whether sounding in law or equity. Without modifying or qualifying in any way the preceding sentence or implying any intent contrary thereto, for the avoidance of doubt, in no event shall any Seller Group Member be entitled to seek or obtain any recovery or judgment in excess of the Reverse Termination Fee or the Termination Fee, as applicable, against the Purchaser Indemnified Parties or the Purchaser Financing Group Members or any of their respective assets, and in no event shall Agent or Sellers be entitled to seek or obtain any other Damages of any kind against any such Person, including consequential, special, indirect or punitive damages for, or with respect to, (i) this Agreement or the transactions contemplated hereby and thereby (including any breach by Purchaser or Parent), (ii) the termination of this Agreement, (iii) the failure to consummate the transactions contemplated by this Agreement or (iv) any Claims under applicable Law arising

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out of any such breach, termination or failure (save and except for claims for Damages after Closing pursuant to Section 9.3).

Immediately following receipt by Agent of payment of the Reverse Termination Fee or payment of the Termination Fee, as applicable, Agent and Sellers shall cause all of their respective shareholders, partners, members, Affiliates (including Corporation), directors, officers, employees or agents (collectively, the “Seller Group Members”) to dismiss with prejudice any judicial or arbitral proceeding initiated by any of them with respect to this Agreement, the other agreements and transactions contemplated hereby and thereby, or the Debt Commitment Letters against any Purchaser Financing Group Member. For the avoidance of doubt, in no event shall any Purchaser Financing Group Member be subject to, nor shall any Seller Group Member seek to recover, nor shall they accept, monetary damages in excess of the Reverse Termination Fee or the Termination Fee, as applicable (it being understood that this limitation shall apply in the aggregate to all of the Seller Group Members).

9.12 No Circular Recovery.

Each Seller hereby agrees that he, she or it will not make any claim for indemnification against Purchaser or any LJVH Group Member by reason of the fact that such Seller was a controlling person, director, employee or representative of an LJVH Group Member, or was serving as such for another Person at the request of Purchaser or an LJVH Group Member (whether such claim is for Damages of any kind or otherwise, and whether such Claim is pursuant to any statute, organizational document, contractual obligation or otherwise), with respect to any claim brought by a Purchaser Indemnified Person against Sellers relating to this Agreement or any transactions contemplated hereby. With respect to any Claim brought by a Purchaser Indemnified Person against Sellers relating to this Agreement and any of the transactions contemplated hereby, Sellers expressly waive any right of subrogation, contribution, advancement, indemnification or other claim against the LJVH Group Members with respect to any amounts owed by Sellers pursuant to this Article 9.

9.13 Carriage of Tax Matters.

(a) Agent shall have the exclusive authority to control, at its own expense, any audit, examination, objection, assessment, reassessment, appeal or similar proceeding by any Governmental Entity relating to or otherwise arising in connection with Taxes of the LJVH Group Members (each, a “Tax Audit”) to the extent it includes any Pre-Closing Tax Period which may give rise to Damages for which indemnification is available under Sections 9.2, provided that (i) Agent promptly informs Purchaser of all developments in any such Tax Audit, provides Purchaser the right to review and comment on all material written submissions to any Governmental Entity, provides Purchaser the right to attend any meeting with any Governmental Entity and provides Purchaser the right to otherwise participate in any such Tax Audit and (ii) Agent shall not settle any Tax Audit without the written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed. If Agent fails within ten (10) Business Days from receipt of notice of a Tax Audit to assume control of the Tax Audit, then Agent shall be deemed to have waived its right to control the Tax Audit and Purchaser shall have the right to control the Tax Audit.

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(b) Notwithstanding Section 9.13(a), if a Tax Audit is in respect of a Straddle Period or both a Pre-Closing Tax Period and a Post-Closing Tax Period, or could affect Taxes of a Purchaser Indemnified Party or any LJVH Group Member for any Post-Closing Tax Period, Agent and Purchaser shall jointly control such Tax Audit.

ARTICLE 10

MISCELLANEOUS

10.1 Notices.

Any notice, direction or other communication given under this Agreement shall be in the English language, in writing and given by delivering it or sending it by facsimile or other similar form of recorded communication (excluding communication by electronic mail) addressed:

a) to Parent or Purchaser at:

Green Mountain Coffee Roasters, Inc.

33 Coffee Lane

Waterbury, VT

05676

Attention: Howard Malovany, Esq.

Telephone: 802-244-5621

Facsimile: 802-244-1289

with a copy to:

Ropes & Gray LLP

One International Place

Boston, MA

02110-2624

Attention: Jane Goldstein, Esq.

Telephone: (617) 951-7431

Facsimile: (617) 235-0376

b) to Agent:

LJ Coffee Agent, LLC

c/o Littlejohn & Co., LLC

8 Sound Shore Drive

Greenwich, Connecticut

06830

Attention: David Simon

Telephone: (203) 552-3500

Facsimile: (203) 552-3550

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with a copy to:

Stikeman Elliott LLP

1155 René-Lévesque Blvd. West

40th Floor

Montreal, Québec

H3B 3V2

Attention: Peter Castiel

Telephone: (514) 397-3272

Facsimile: (514) 397-3222

Any such communication shall be deemed to have been validly and effectively given (i) if personally delivered, on the date of such delivery if such date is a Business Day and such delivery was made prior to 4:00 p.m. (Montreal time) and otherwise on the next Business Day, or (ii) if transmitted by facsimile or similar means of recorded communication (excluding communication by electronic mail) on the Business Day following the date of transmission. Any Party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to such Party at its changed address.

10.2 Time of the Essence.

Time shall be of the essence of this Agreement.

10.3 Announcements.

The Parties and their respective representatives will not make any public disclosure concerning the matters set forth in this Agreement or the transactions contemplated hereby without the prior consent of Agent and Parent, except if required for legal, securities Laws or other regulatory reasons. If a Party is required by Law to make a public announcement with respect to this Agreement, such Party will provide reasonable prior notice to the other Parties, including the proposed text of the announcement.

10.4 Third Party Beneficiaries.

The Parties intend that this Agreement shall not benefit or create any right or cause of action in, or on behalf of, any Person other than the Parties to this Agreement and no Person, other than the Parties to this Agreement shall be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum; provided that Purchaser Financing Group Members shall be entitled to the benefits of Sections 9.11, 10.13 and 10.15.

10.5 Expenses.

Except as otherwise set forth herein, each Party shall pay for its own fees and expenses, and Sellers shall pay for LJVH Group Members’ fees and expenses, incident to the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby, including, without limitation, brokers, legal and accounting fees and expenses. Any fee or expense of Sellers or the LJVH Group Members that is incurred by or for which a LJVH Group

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Member is liable in connection with this Agreement and the transactions contemplated hereby that is paid by Purchaser or by a LJVH Group Member following Closing (a “Third Party Expense”) shall be deemed to be Damages to the extent such Third Party Expense has not caused an adjustment to the Working Capital pursuant to Section 2.4 or otherwise been deducted from the Purchase Price (the extent to which such Third Party Expense has not caused an adjustment to the Working Capital pursuant to Section 2.4, an “Excess Third Party Expense”). For greater certainty, Third Party Expenses shall not include the Sellers’ Transaction Expenses paid pursuant to Section 2.3(e).

10.6 Appointment of Agent.

In order to administer efficiently the determination of certain matters under this Agreement, each Seller has executed the Agent and Indemnity Agreement appointing Agent and irrevocably authorizing Agent to act as each such Seller’s agent with respect to all matters under this Agreement and the Escrow Agreement. Agent hereby accepts such appointment and agrees to perform the responsibilities set forth in the Agent and Indemnity Agreement, which Agent and Indemnity Agreement may not be amended without the prior written consent of Purchaser, such consent not to be unreasonably withheld, conditioned or delayed.

Without limiting the generality of the foregoing, Agent shall have full power and authority to make all decisions and take all actions relating to Sellers’ respective rights, obligations and remedies under this Agreement and the Escrow Agreement including to receive and make payments, to receive and send notices (including notices of termination), to receive and deliver documents, to exercise, enforce or waive rights or conditions, to give releases and discharges, to seek indemnification on behalf of Sellers and to defend against indemnification claims of Purchaser. Subject to the terms of the Agent and Indemnity Agreement, all decisions and actions taken by Agent shall be binding upon all Sellers, and no Seller shall have the right to object, dissent, protest or otherwise contest the same.

Purchaser shall be entitled to deal only with Agent in respect of all matters arising under this Agreement and the Escrow Agreement including to receive and make payments, to receive and send notices (including notices of termination), to receive and deliver documents, to exercise, enforce or waive rights or conditions, to give releases and discharges, to seek indemnification against Sellers or any one of them and to defend against indemnification claims of Sellers.

All references in this Agreement to decisions and actions to be taken by Sellers or any one of them, as the case may be, shall be deemed taken by Sellers or any one of them, as the case may be, if such decisions or actions are taken by Agent. All references in this Agreement to decisions and actions to be taken by Purchaser and directed to Sellers or any one of them, as the case may be, shall be deemed directed to Sellers or any one of them, as the case may be, if such decisions or actions are directed by Purchaser to Agent.

Purchaser shall be entitled to rely upon any notice provided to Purchaser by Agent or action taken by Agent acting within the scope of its authority.

Notwithstanding the foregoing, no payment, notice, receipt or delivery of documents, exercise, enforcement or waiver of rights or conditions, indemnification claim or

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indemnification or a principal defense shall be ineffective by reason only of it having been made or given to or by a Seller, as the case may be, directly if each of Purchaser and such Seller consent by virtue of not objecting to such dealings without the intermediary of Agent.

10.7 Solidarity.

Purchaser and Parent shall be solidarily (within the meaning of the Civil Code of Québec) liable for their respective obligations hereunder.

10.8 Amendments.

This Agreement may only be amended, supplemented or otherwise modified by written agreement signed by Purchaser and Agent, provided that no amendment shall be made that adversely affects any Seller disproportionately from any other Seller without the consent of such Seller.

10.9 Waiver.

No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision (whether or not similar), nor shall such waiver be binding unless executed in writing by Agent on behalf of Sellers or by Purchaser, as the case may be.

No failure on the part of any Party to exercise, and no delay in exercising any right under this Agreement shall operate as a waiver of such right; nor shall any single or partial exercise of any such right preclude any other or further exercise of such right or the exercise of any other right.

10.10 Non-Merger.

Except as otherwise expressly provided in this Agreement, the covenants, representations and warranties shall not merge on and shall survive Closing and, notwithstanding such Closing and any investigation made by or on behalf of any Party, shall continue in full force and effect. Closing shall not prejudice any right of one Party against any other Party in respect of anything done or omitted under this Agreement or in respect of any right to damages or other remedies.

10.11 Entire Agreement.

This Agreement together with the agreements referred to herein constitutes the entire agreement between the Parties with respect to the transactions contemplated in this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement except as specifically set forth herein and none of the Parties has relied or is relying on any other information, discussion or understanding in entering into and completing the transactions contemplated in this Agreement.

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10.12 Successors and Assigns.

This Agreement shall become effective when executed by the Parties and after that time shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

10.13 Assignment.

Neither this Agreement nor any of the rights or obligations under this Agreement shall be assignable or transferable by any of the Parties without the prior written consent of Agent and Parent, provided however, that nothing herein shall prohibit (i) any Seller from assigning and transferring all or part of this Agreement and any of its rights thereunder to one of its Affiliates, provided that any such assignor remains solidarily (within the meaning of the Civil Code of Québec) bound with such assignee by the terms and conditions of this Agreement so assigned, (ii) either Purchaser or Parent from assigning and transferring all or part of this Agreement and any of its rights thereunder to one of its Affiliates, provided that any such assignor remains solidarily (within the meaning of the Civil Code of Québec) bound with such assignee by the terms and conditions of this Agreement so assigned, (iii) Purchaser or Parent from assigning or transferring, immediately prior to, at or following Closing, all or part of Purchaser’s or Parent’s rights or interests hereunder, to any Purchaser Financing Group Member, provided that no such assignment shall impact any of such assignor’s obligations hereunder, or (iv) Purchaser or Parent from assigning or transferring, at or following Closing, any of Purchaser’s and Parent’s rights to indemnification under Article 9 to Purchaser Indemnified Parties, provided that no such assignment shall impact any of such assignor’s obligations hereunder.

10.14 Severability.

If any provision of this Agreement shall be determined by an arbitrator or any court of competent jurisdiction to be illegal, invalid or unenforceable, that provision shall be severed from this Agreement and the remaining provisions shall continue in full force and effect.

10.15 Governing Law.

This Agreement shall be governed by and interpreted and enforced in accordance with the Laws of the Province of Québec and the federal Laws of Canada applicable therein, except that the definition of “Material Adverse Effect” will be governed by and interpreted and enforced in accordance with the Laws of the State of New York. Each Party irrevocably attorns and submits to the exclusive jurisdiction of the Quebec courts situated in the City of Montreal and waives objection to the venue of any proceeding in such court or that such court provides an inconvenient forum.

Each of the Parties agrees that it will not bring or support any Claim, cross-Claim or third-party Claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any Purchaser Financing Group Member in any way relating to this Agreement or any of the transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the Debt Commitment Letters or the performance thereof, in any forum other than the Supreme Court of the State of New York, County of New

79

York, or, if under applicable Law exclusive jurisdiction is vested in the federal courts, the United States District Court for the Southern District of New York (and appellate courts thereof). Each Party hereby waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable Law, any Claim that (a) such Party is not personally subject to the jurisdiction of such courts, (b) such Party and such Party’s property is immune from any legal process issued by such courts or (c) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum.

10.16 Counterparts.

This Agreement may be executed in any number of counterparts (including counterparts by facsimile) and all such counterparts taken together shall be deemed to constitute one and the same instrument.

10.17 Language.

The Parties expressly acknowledge that they have requested that this Agreement and all ancillary and related documents thereto be drafted in the English language only. Les parties aux présentes reconnaissent avoir exigé que la présente entente et tous les documents qui y sont accessoires soient rédigés en anglais seulement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above mentioned.

SSR ACQUISITION CORP.
Per:	/S/    HOWARD MALOVANY
Name:	Howard Malovany
Title:	Vice President & Secretary

GREEN MOUNTAIN COFFEE ROASTERS, INC.
Per:	/S/    HOWARD MALOVANY
Name:	Howard Malovany
Title:	Vice President, Corporate General Counsel and Secretary

LJVH S.à.r.l.
Per:	/s/ MICHEL VAN KRIMPEN and ONNO BOUWMEISTER
Name:	Lux Business Management S.à.r.l.
Title:	Manager

Signature Page – Share Purchase Agreement

FONDS DE SOLIDARITÉ DES TRAVAILLEURS DU QUÉBEC
Per:	/s/ HUBERT CARRIER
Name:	Hubert Carrier
Title:	Investment Director, Agri-food

Signature Page – Share Purchase Agreement

LJ COFFEE AGENT, LLC
Per:	/s/ MICHAEL KLEIN
Name:	Michael Klein
Title:	Manager

Signature Page – Share Purchase Agreement

/s/ SYLVAIN TOUTANT

Sylvain Toutant

Signature Page – Share Purchase Agreement

/s/ KEVIN BROWN

Kevin Brown

Signature Page – Share Purchase Agreement

/s/ LUC LAVERDIÈRE

Luc Laverdière

Signature Page – Share Purchase Agreement

/s/ GÉRARD GEOFFRION

Gérard Geoffrion

Signature Page – Share Purchase Agreement

/s/ ED HOLLORAN

Ed Holloran

Signature Page – Share Purchase Agreement

/s/ DAVID LARIMER

David Larimer

Signature Page – Share Purchase Agreement

/s/ JEAN-YVES MONETTE

Jean-Yves Monette

Signature Page – Share Purchase Agreement

/s/ ANGELO MOTTILLO

Angelo Mottillo

Signature Page – Share Purchase Agreement

/s/ ENRICO SALTARELLI

Enrico Saltarelli

Signature Page – Share Purchase Agreement

/s/ MORTEN SCHRODER

Morten Schroder

Signature Page – Share Purchase Agreement

/s/ PIERRE BRODEUR

Pierre Brodeur

Signature Page – Share Purchase Agreement

/s/ DENIS SARRAZIN

Denis Sarrazin

Signature Page – Share Purchase Agreement

/s/ JEAN-OLIVIER BOUCHER

Jean-Olivier Boucher

Signature Page – Share Purchase Agreement

/s/ ISABELLE PASQUET-GEAIRON

Isabelle Pasquet-Geairon

Signature Page – Share Purchase Agreement

/s/ JOSÉ TÉTRAULT

José Tétrault

Signature Page – Share Purchase Agreement

/s/ MICHEL LAJOIE

Michel Lajoie

Signature Page – Share Purchase Agreement

/s/ FRANÇOIS L’ÉTOILE

François De L’Étoile

Signature Page – Share Purchase Agreement

/s/ MICHEL SLIGHT

Michel Slight

Signature Page – Share Purchase Agreement

/s/ ROBERT MANN

Robert Mann

Signature Page – Share Purchase Agreement

/s/ TIMOTHY WEICHEL

Timothy Weichel

Signature Page – Share Purchase Agreement

/s/ JOHANNE GROULX

Johanne Groulx

Signature Page – Share Purchase Agreement

/s/ ALBERTO MOURON

Alberto Mouron

Signature Page – Share Purchase Agreement

/s/ DENIS GRAUS

Denis Graus

Signature Page – Share Purchase Agreement

/s/ RICHARD NOEL

Richard Noel

Signature Page – Share Purchase Agreement

/s/ RICHARD CLERMONT

Richard Clermont

Signature Page – Share Purchase Agreement

/s/ MARIE-CLAUDE DESSUREAULT

Marie-Claude Dessureault

Signature Page – Share Purchase Agreement

/s/ JEAN-FRANCOIS VALLEE

Jean-Francois Vallee

Signature Page – Share Purchase Agreement

/s/ ANAND KHANZODE

Anand Khanzode

Signature Page – Share Purchase Agreement

/s/ SUSAN DONNELLY

Susan Donnelly

Signature Page – Share Purchase Agreement

EX-21

Exhibit 21

Subsidiaries of the Registrant

Subsidiary	State or Jurisdiction of Incorporation or Organization	Name Under Which Does Business (if different)
Diedrich Coffee, Inc.	Delaware
Keurig, Incorporated	Delaware
Timothy’s Coffee of the World Inc.	New Brunswick, Canada

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-29641, No. 333-65321, No. 333-78937, No. 333-70116, No. 333-123255, No. 333-135237, No. 333-141567, No. 333-150929 and No. 333-163544) and on Form S-3 (No. 333-160974) of Green Mountain Coffee Roasters, Inc. of our report dated December 9, 2010 relating to the financial statements, financial statement schedule, and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

December 9, 2010

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 and 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lawrence J. Blanford, Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Green Mountain Coffee Roasters, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 9, 2010

/s/ LAWRENCE J. BLANFORD        

Lawrence J. Blanford

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 and 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frances G. Rathke, Chief Financial Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Green Mountain Coffee Roasters, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 9, 2010

/S/    FRANCES G. RATHKE        

Frances G. Rathke

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Green Mountain Coffee Roasters, Inc. (the “Company”) on Form 10-K for the period ending September 25, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lawrence J. Blanford, as the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: December 9, 2010

/S/    LAWRENCE J. BLANFORD        

Lawrence J. Blanford*

President and Chief Executive Officer

* A signed original of this written statement required by Section 906 has been provided to Green Mountain Coffee Roasters, Inc. and will be retained by Green Mountain Coffee Roasters, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Green Mountain Coffee Roasters, Inc. (the “Company”) on Form 10-K for the period ending September 25, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frances G. Rathke, as the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: December 9, 2010

/S/    FRANCES G. RATHKE        

Frances G. Rathke*

Chief Financial Officer

* A signed original of this written statement required by Section 906 has been provided to Green Mountain Coffee Roasters, Inc. and will be retained by Green Mountain Coffee Roasters, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.