GREEN MOUNTAIN COFFEE INC
EQUIPMENT PURCHASE AGREEMENT
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<TYPE>EX-10.2
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<FILENAME>exhibit10_2.htm
<DESCRIPTION>EQUIPMENT PURCHASE AGREEMENT
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<title>Equipment Purchase Agreement</title>
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<p ALIGN="CENTER">EQUIPMENT PURCHASE AGREEMENT</p>
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<p>&nbsp;</p>
<p>This EQUIPMENT PURCHASE AGREEMENT (this &quot;Agreement&quot;) is dated as of
the 21st day of June 2002, by and between Keurig, Incorporated, a Delaware
corporation (the &quot;Seller&quot;), and Green Mountain Coffee Roasters, Inc.,
a Vermont corporation (the &quot;Buyer&quot;).</p>
<p>WHEREAS, pursuant to a License Agreement, dated as of June 30, 2000, as
amended by an Amendment Agreement dated as of April 4, 2002 and a Side Letter
Agreement dated as of April 4, 2002 (collectively, the "License Agreement"),
the Buyer wishes to exercise its option to purchase the Packaging Lines (as
defined in the License Agreement) and ancillary equipment thereto upon the terms
and conditions set forth herein (as hereinafter defined).</p>
<p>NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the Buyer and the Seller agree as follows:</p>
<p>1. PURCHASE AND SALE. Subject to the terms and conditions set forth in this
Agreement, at the Closing referred to in Section 3 hereof, the Seller shall sell,
transfer and deliver to the Buyer, and the Buyer shall purchase, acquire, and
take delivery of all of the following equipment and related property (all of
which are hereinafter referred to collectively as the &quot;Acquired
Equipment&quot;):</p>
<blockquote>
  <blockquote>
    <p>(a) The five (5) Packaging Lines (the "PLs") used in manufacturing
    K-Cups currently located at the Buyer's facility (referred to by Seller as
    PL numbers 2, 3, 4, 5, and 10) and associated peripheral equipment including
    printers, check weighers, label applicators, and waste vacuums. This
    equipment is listed on Exhibit 1A;</p>
    <p>(b) PL support equipment listed on Exhibit 1B; and</p>
    <p>(c) Spare parts listed on Exhibit 1C.</p>
  </blockquote>
</blockquote>
<p>Included in the sale of the PLs will be the component shop drawings for such
PLs solely to be used to facilitate the fabrication of spare parts and the
maintenance of the purchased PL's. Buyer agrees not to use or permit a third
party to use such shop drawings for the design or development of any new PL's
and any sale of such shop drawings is strictly prohibited. Any use of such shop
drawings for the design or development of PLs shall be subject to the terms and
conditions of Section 6.5 of the Licensing Agreement.</p>
<p>The Buyer acknowledges and agrees that, except as expressly set forth in the
License Agreement and this Agreement, no other assets or rights of Seller,
including without limitation any rights to use the Seller's intellectual
property rights to make K-Cups using the PLs or the right to sublicense or sell
the PLC source code, are being sold, granted or conveyed to Seller by this
Agreement, and that any such rights have been or may only be granted under and
exercised pursuant to a separate written license agreement made by the Seller,
including, without limitation, the License Agreement.</p>
<p>2. PURCHASE PRICE. The Buyer shall pay to the Seller, as the aggregate
purchase price for the Acquired Equipment (the &quot; Purchase Price&quot;), an
amount of $2,612,869.32. A detailed breakdown of the Purchase Price is provided
in Exhibit 2. The Purchase Price shall be paid in the manner provided in Section
3
hereof.</p>
<p>3. CLOSING.</p>
<p>3.1. <u>Time</u> <u>and</u> <u>Place</u>. The closing of the transfer and
delivery of the documents and instruments necessary to consummate the purchases
and sales contemplated by this Agreement (the &quot;<u>Closing</u>&quot;) shall
be held at 10 a.m. on July 8, 2002, or at such other time as the Buyer and the
Seller may agree, at the offices of counsel for the Seller, Chu, Ring &amp;
Hazel LLP, 49 Melcher Street, Boston, MA 02210. The date on which the Closing is
actually held hereunder is sometimes referred to herein as the &quot;Closing
Date&quot;.</p>
<p>3.2. <u>Transactions</u> <u>at</u> <u>Closing.</u> At the Closing of the
purchase and sale of the Acquired Equipment, the Seller shall duly execute and
deliver to the Buyer a Warranty Bill of Sale in substantially the form of
Exhibit 3.2 hereto and surrender full possession and control of the Acquired
Equipment to the Seller. The Buyer shall deliver to the Seller the Purchase
Price by cashier's, certified or bank check or wire transfer payable to the
order of the Seller, representing the cash Purchase Price of all of the Acquired
Equipment.</p>
<p>4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER. The Seller
represents, warrants, covenants with the Buyer as follows:</p>
<p>4.1. The PLs are warranted as specified in the License Agreement.
Notwithstanding the foregoing, the support equipment listed in Section 1(b) and
spare parts listed in Section 1(c) comprising the remainder of the Acquired
Assets are expressly not included in this warranty and are being sold in "as
is" condition. Except as expressly set forth herein, the Seller disclaims any
other warranties, express or implied.</p>
<p>4.2. The License Agreement PL warranty shall be void if the Buyer fails to
perform in any material respect any of the following obligations in accordance
with the Operational Training Guide dated March 12, 2000, the Keurig Production
Testing Procedures dated February 20, 2002 and the other agreements between the
Buyer and the Seller prior to the Closing:</p>
<blockquote>
  <blockquote>
    <p>(a) Submit daily PL production reports to the Seller for more than three
    (3) consecutive days. Notwithstanding the foregoing, all daily production
    reports must be submitted in a timely fashion.</p>
    <p>(b) Operate the PLs with operators, certified in accordance with the
    Seller's procedures as of the Closing, under supervision.</p>
    <p>(c) Perform PL quality control with inspectors, certified in accordance
    with the Sellers procedures as of the Closing, under supervision; provided,
    however, the testing rate may be redefined in Buyer's sole discretion. .</p>
    <p>(d) Perform PL maintenance with maintenance personnel certified in
    accordance with the Seller's procedures as of the Closing .</p>
    <p>(e) Follow all published and established Seller PL procedures material to
    the operation of the PLs as such procedures exist as of the Closing .</p>
    <p>(f) Purchase K-Cup raw materials (cups, filter paper and lids) from
    Seller approved suppliers.</p>
    <p>(g) Purchase or produce and install PL replacement parts in accordance
    with Seller specifications as of the Closing; provided, however, Seller
    shall deliver specifications for any replacement parts within seven days
    upon Buyer's request.</p>
    <p>(h) Provide all Seller specified appropriate utilities including:
    electrical, compressed air and nitrogen as of the Closing..</p>
    <p>(i) Obtain Seller's written permission prior to making any material
    modifications to the PL; provided, however, if Buyer makes a modification to
    one or more segments of the PL without obtaining Seller's permission the
    warranty for the un-modified segments of the PL shall remain in force. .</p>
    <p>(j) Have a Seller engineer on site (at Buyer's expense) during any
    relocation of the PL's from their present orientation and location.</p>
  </blockquote>
</blockquote>
<p>4.3. <u>Organization</u> <u>of</u> <u>the</u> <u>Seller;</u> <u>Authority.</u>
The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. This Agreement has been duly
executed and delivered by the Seller and constitutes the legal, valid and
binding obligation of the Seller, enforceable against the Seller in accordance
with its terms.</p>
<p>4.4. <u>Title</u> <u>to</u> <u>Acquired</u> <u>Equipment</u>. The Seller is
the lawful owner of, has good and valid record and marketable title to, and has
the full right to sell, convey, transfer, and deliver the Acquired Equipment,
without any restrictions of any kind whatsoever. At and as of the Closing, the
Seller will convey the Acquired Equipment to the Buyer by bill of sale effective
to vest in the Buyer, and the Buyer will have, good and valid record and
marketable title to all of the Acquired Equipment, free and clear of all
security interests, liens, leases or other encumbrances.</p>
<p>4.5 Upgrades, Improvements and Modifications. During the term of the
License Agreement and any equivalent agreement with the Seller granting the
Buyer the right to manufacture, use, produce and distribute K-Cups, the Seller
shall supply the Buyer with any technical information, including, without
limitation, shop drawings and source codes, related to any material upgrades,
improvements or modifications to similar packaging lines owned, leased or
licensed by the Seller.</p>
<p>5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Seller that the Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Vermont. This
Agreement has been duly executed and delivered by the Buyer and constitutes the
legal, valid and binding obligation of the Buyer, enforceable against the Buyer
in accordance with its terms.</p>
<p>6. Buyer sale of pls. The Buyer may sell or transfer the PLs to a third
party ("Transferee"), provided, however, that no sale or transfer to any
Transferee will be made effective until such Transferee (i) becomes subject to
all of the obligations of the Buyer under this Agreement and (ii) agrees to be
bound by this Agreement as if the proposed Transferee were a signatory to this
Agreement in writing, by executing a counterpart signature page to this
Agreement. If such Transferee is not a Licensed Roaster, as an express condition
of the effectiveness of such sale or transfer Buyer shall obtain and deliver to
the Seller written representation from the Transferee acknowledging that only
Licensed Roasters are authorized to manufacture K-Cups and unauthorized
manufacture of K-Cups would be in violation of Seller's patents and other
proprietary rights entitling the Seller to injunctive relief in addition to any
other rights and remedies. The Buyer shall provide the Seller with the contact
information and intended use of the PLs for any such Transferee.</p>
<p>7. PL Service. If the Buyer shall desire the Seller to install or service
the PLs or provide technical assistance to the Buyer, the work shall be
performed on the basis as described in Schedule 7.</p>
<p>&nbsp;</p>
<p>8. GENERAL.</p>
<p>8.1. <u>Expenses.</u> All expenses of the preparation, execution and
consummation of this Agreement and of the transactions contemplated hereby,
including, without limitation, attorneys', accountants' and outside advisers'
fees and disbursements, shall be borne by the party incurring such expenses.</p>
<p>8.2. <u>Notices.</u> All notices, demands and other communications
hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally or if mailed by certified
mail, return receipt requested, postage prepaid, or sent by written
telecommunication, as follows:</p>
<p>&nbsp;</p>
<p>If to the Seller, to:</p>
<p>Keurig, Incorporated<br>
101 Edgewater Drive<br>
Wakefield, MA 01880<br>
Attention: Nick Lazaris, President and CEO</p>
<p>with a copy sent contemporaneously to:</p>
<p>Chu, Ring, &amp; Hazel, LLP.<br>
49 Melcher Street<br>
Boston, MA 02210<br>
Attention: John H. Chu, Esq.</p>
<p>If to the Buyer, to:</p>
<p>Green Mountain Coffee Roasters, Inc.<br>
33 Coffee Lane<br>
Waterbury, VT 05676<br>
Attention: Paul Comey</p>
<p>with a copy sent contemporaneously to:</p>
<p>Merritt &amp; Merritt<br>
Box 5839<br>
Burlington, VT 05402<br>
Attention: Sharon J.Merritt, Esq.</p>
<p>8.3. <u>Entire</u> <u>Agreement</u>. This Agreement and the License
Agreement contain the entire understanding of the parties, supersedes all prior
agreements and understandings relating to the subject matter hereof and shall
not be amended except by a written instrument hereafter signed by all of the
parties hereto.</p>
<p>8.4. <u>Governing</u> <u>Law</u>. The validity and construction of this
Agreement shall be governed by the internal substantive laws of the Commonwealth
of Massachusetts.</p>
<p>8.5. <u>Sections</u> <u>and</u> <u>Section</u> <u>Headings</u>. All
enumerated subdivisions of this Agreement are herein referred to as &quot;Section.&quot; The headings of Sections are for
reference only and shall not limit or control the meaning thereof.</p>
<p>8.6. <u>Assigns</u>. This Agreement shall be binding upon and inure to the
benefit of the heirs and successors of each of the parties. Neither this
Agreement nor the obligations of any party hereunder shall be assignable or
transferable by such party without the prior written consent of the other party
hereto; provided, however, that nothing contained in this 8.6 shall prevent
the Buyer, without the consent of the Seller, from transferring or assigning
this Agreement or its rights or obligations hereunder to another entity
controlling, under the control of, or under common control with the Buyer.</p>
<p>8.7. <u>Survival</u> <u>and</u> <u>Materiality</u> <u>of</u> <u>Representations</u>
<u>and</u> <u>Warranties.</u> The representations and warranties of the parties
hereto contained in this Agreement or otherwise made in writing in connection
with the transactions contemplated hereby (in each case except as affected by
the transactions contemplated by this Agreement) shall be deemed to have been
made on the date hereof and on the date of Closing and shall be deemed to have
been relied on by the Buyer and shall survive the Closing and the consummation
of the transactions contemplated hereby.</p>
<p>8.8. <u>Counterparts.</u> This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.</p>
<p>8.9. <u>Definitions.</u> Unless otherwise defined herein, terms used in
this Agreement shall have the same meanings as defined in the License Agreement.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered by their
respective duly authorized officers as an instrument under seal as of the date
and year first above written.</p>
<p>&nbsp;</p>
<u>
<p>Keurig, Incorporated</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Green Mountain Coffee Roasters, Inc.</p>
</u>
<p>&nbsp;By: /s/ <u>Nicholas Lazaris&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
By: /s/ <u>William G. Hogan</u></p>
<p>Nicholas Lazaris&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
William G. Hogan</p>
<p>President and CEO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vice President and CFO</p>
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