GROUND LEASE AGREEMENT

GROUND LEASE AGREEMENT

THIS AGREEMENT dated as of the 14th day of April, 2005, by and between Pilgrim Partnership, L.L.C., a Vermont limited liability company (hereinafter "Landlord"), and Green Mountain Coffee Roasters, Inc., a Vermont corporation (hereinafter "Tenant").

WITNESSETH:

1.         Demise, Description of Land . Landlord does hereby demise, let, rent and lease unto Tenant, and Tenant hereby leases and rents from Landlord, certain land measuring approximately 6.13 acres in size located in the Village of Waterbury, Vermont, being the land located at and known as Site D on the Plan of Pilgrim Commercial Park Condominiums, dated March 2005, prepared by Charles Grenier Consulting Engineer, P.C. (said site being hereinafter referred to as "Site D," said plan being hereinafter referred to as the "Park Plan" and said land being hereinafter referred to as the "Land"), together with a non-exclusive right to use the roads, parking areas, open spaces and other common areas included within Pilgrim Commercial Park, subject to the limitations on the use thereof (if any) included in the applicable condominium declaration and other governing documents. The foregoing notwithstanding, during the term of this Lease, Tenant shall have the exclusive right to use any common areas included on the Land which have been or shall be designated in the condominium declaration as a "Limited Common Element" or otherwise set aside for the exclusive use of the owner or lessee of Site D. A copy of the Park Plan is attached hereto as "Exhibit A."

            2.         Term of Lease . Said Land is hereby leased to Tenant, subject to all of the terms and conditions contained herein, for an initial term commencing on January 1, 2005, and ending on December 31, 2024. Said initial term shall be subject to extension pursuant to Section 4. All references herein to the term of this Lease shall include any extension of said term pursuant to Section 4.

3.         Rent .    (a)        Rent Payments. During the initial term of this Lease, for the period from January 1, 2005, through December 31, 2009, Tenant agrees to pay Landlord rent of $78,000 annually, in monthly installments of $6,500 each. Said rent obligation shall commence on January 1, 2005, with the first installment payable as of said date. The rent hereunder shall increase by seven and one-half percent (7.5%) of the annual rent most-recently in effect on each of the following dates: January 1, 2010; January 1, 2015; and January 1, 2020.

            (b)         Additional Rent. All costs, charges, expenses and adjustments to rent which Tenant assumes, agrees or is obligated to pay Landlord pursuant to this Lease shall be deemed additional rent, and, in the event of the nonpayment thereof, Landlord shall have all the rights and remedies with respect thereto as are herein provided for in case of the nonpayment of rent. In the event that any of the costs, charges and expenses constituting additional rent are deemed to be taxable income to Landlord, Landlord shall be entitled to a corresponding tax deduction for said costs, charges and expenses.

            (c)         Rent Payments. Tenant covenants to pay monthly installments of rent pursuant to subsection (a) above in advance, on the first day of each month, without any set-off or reduction. Tenant covenants to pay Landlord the rent, additional rent and adjustments of rent as herein provided when due, without notice or demand, at the time and in the manner herein specified and, in default of payment may, at the option of Landlord, be added to the next or any other installment of fixed minimum rent subsequently becoming due.

            (d)         Late Payment Penalty. Tenant acknowledges that late payment by Tenant to Landlord of rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be difficult to ascertain. Accordingly, if any installment of rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee within ten (10) days after such amount shall be due, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of such overdue amount, not to exceed $250. The parties agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount nor prevent Landlord from exercising any of the other rights and remedies granted hereunder.

4.         Option to Extend Term . (a)       Extension Term. Tenant shall have an option to extend the term of the Lease for an additional period of twenty (20) years, provided that Tenant is not in default under any material term or condition of this Lease at the time it elects to exercise its option or at the commencement of the extension term of the Lease. Tenant may exercise its option hereunder, by written notice to Landlord given at least six months prior to expiration of the initial term of this Lease. In the event that Tenant elects to extend the term pursuant to the foregoing option, such extension shall be upon the same terms and conditions as set forth herein, except that the rent shall be adjusted in accordance with Section 4(b) below.

(b)        Extension Term Rent. In the event that Tenant exercises its option to extend the term of this Lease, the rent for the extension term shall be equal to the greater of (i) the annual rental rate in effect during the last year of the initial term of this Lease plus seven and one-half percent (7.5%) of said annual rental rate, or (ii) the market ground lease rental value of the Land as of the commencement of the rental term (the "Market Rent") as same shall be agreed by the parties or as otherwise established hereunder. During the extended term, the rent shall increase by seven and one-half percent (7.5%) of the annual rent most recently in effect on each of the following dates: January 1, 2030; January 1, 2035; and January 1, 2040. As a condition precedent to Tenant's right to extend the term of this Lease, Tenant shall give Landlord a nonbinding preliminary notice of intent to exercise its option ("Notice of Intent") not less than 24 months prior to the end of the Lease term. If the Landlord and Tenant cannot agree upon the Market Rent within 60 days after the Landlord's receipt of the Notice of Intent, then the Market Rent shall be determined by an independent real estate appraiser or broker mutually acceptable to Landlord and Tenant who shall have at least 10 years professional experience in the appraisal and/or leasing of commercial office buildings in Washington County, Vermont, and who shall be in all respects impartial and disinterested. Tenant shall notify Landlord of the name of the appraiser/broker that Tenant proposes to use for such determination within 75 days after Tenant's delivery of the Notice of Intent. If Landlord objects to such appraiser/broker, Landlord shall propose an alternate appraiser/broker similarly qualified by written notice to Tenant within 15 days after receipt of Tenant's proposal, or Landlord shall be deemed to have accepted the appraiser/broker proposed by Tenant. Tenant shall have 15 days after the receipt of Landlord's proposal of an alternate appraiser/broker to object to such proposed appraiser/broker. If Tenant timely objects to Landlord's proposed appraiser/broker, then the appraiser/broker selected by Landlord and the appraiser/broker selected by Tenant shall jointly name a third appraiser/broker similarly qualified and that third appraiser/broker shall determine the current Market Rent for the Land. Within 15 days after final designation of the appraiser/broker, that appraiser/broker shall render a written opinion on the Market Rent, determined by taking into account all of the terms and conditions of this Lease, other than rental, and assuming a twenty-year term, and shall deliver the same to Landlord and Tenant. The determination of Market Rent shall exclude the value of all leasehold improvements undertaken by Tenant and any buildings, fixtures, equipment or other property of Tenant located on the Land. The parties shall share the cost of the independent appraiser/broker on a 50/50 basis. If, after receiving said determination of Market Rent, Tenant still desires to exercise said option, Tenant shall give Landlord written notice of exercise of its option to extend prior to the later of (a) 30 days after its receipt of the determination of the Market Rent as provided herein or (b) the deadline for extending the term of this Lease set forth in Section 4(a). If Tenant does not give Landlord notice of exercise of said option within said period, Tenant shall be deemed to have decided not to exercise said option.

5.         Option to Purchase . (a) At all times during the first five (5) years of the term of this Lease, Tenant shall have the option to purchase (i) the Land, (ii) the land comprising Site C, as identified on the Park Plan ("Site C"), measuring approximately 7.58 acres in size, together with the land comprising Site J as identified on the Park Plan ("Site J"), measuring approximately 1.43 acres in size, each as shown on Exhibit A attached hereto, and (iii) the so-called "Production Building" identified as Building #1 on Site C as also shown on said Exhibit A, in each case at the applicable price set forth below. Tenant may exercise each such option separately, except that Tenant shall only have the right to purchase the land comprising Site C and Site J together and then only if it simultaneously purchases the Production Building located on Site C. Such option may be exercised by written notice from Tenant to Landlord, given no later than the fifth (5 ^th ) anniversary of the commencement of the term of this Lease. If such notice has not been given by said fifth anniversary, then the purchase option described herein shall terminate. Landlord agrees that during the term of said option it shall not transfer, convey or lease any rights in the land and buildings covered by said options to any party other than Tenant. The purchase price for each such option (in each case, the "Purchase Price") shall be as set forth below:

(b) If Tenant exercises any of the foregoing purchase options, Landlord shall convey the subject land or building, as the case may be, to Tenant, or its designee, by warranty deed, conveying fee simple title to such land or building free and clear of all liens and other encumbrances. Any such conveyance of the Land shall include all future development rights associated with the Land under the Declaration of Pilgrim Commercial Park and Mayflower Management, LLC, an affiliate of Landlord agrees to join in any such transfer of development rights for the Land. Closing of the transaction shall occur as soon as reasonably practicable. Rent and other payments due under this Lease or any other applicable lease between Landlord and Tenant shall be prorated to the date of closing. Taxes and Association Dues (each as defined in Section 7 below) shall also be prorated as of the closing. If the Land has not been transferred to Tenant prior to the scheduled expiration of the then-current term of this Lease, said term shall automatically extend at the then-current rent until such transfer has been completed. Tenant shall be responsible for any transfer taxes payable with respect to any conveyance hereunder and Landlord shall be responsible for any capital gains tax, land tax or similar tax which may be payable in connection with such conveyance.

(c) Tenant may assign the foregoing purchase options or any of them to Green Mountain Coffee, Inc. or to any company of which Tenant or Green Mountain Coffee, Inc. owns stock (or other equity interest) representing at least 50% voting control of such company.

            (d) Landlord acknowledges that its breach of its obligation to sell any land or improvements with respect to which Tenant validly exercises its purchase option hereunder would cause Tenant irreparable harm. As a result, Landlord agrees that, in addition to all other available remedies, Tenant shall be entitled to compel Landlord's specific performance of its obligations under this Section 5.

6.         Use of Land . Tenant shall use and occupy the Land for business activities of Tenant or its assignees or subtenants permitted hereunder. The parties acknowledge that, simultaneously with the execution of this Lease, Landlord is conveying to Tenant all buildings, improvements, fixtures, equipment and personal property located on the Land which are owned by Landlord, including without limitation those buildings, improvements, fixtures, equipment and personal property formerly owned by John Reynolds and/or S.T. Paving, Inc. (the "Existing Improvements"). Landlord acknowledges and agrees that Tenant shall have the right to destroy, remove, salvage or dispose of any and all Existing Improvements. Tenant may place and maintain on and about the Land signs, provided said signs are in compliance with all applicable laws, regulations, ordinances and permits.

7.          Taxes, Utility Expenses and Condominium Association Dues . (a) Tenant shall, during the term of this Lease, pay and discharge punctually, as and when the same shall become due and payable, (i) all taxes, special and general assessments (including municipal, regional or state impact fees), water rents, rates and charges and sewer rents (hereinafter referred to as "Taxes"), and each and every installment thereof which shall or may during the term of this Lease become due and payable with respect to the Land or any part thereof, improvements thereon or any equipment owned by Tenant thereon or therein, together with all interest and penalties thereon (all of which shall also be included in the term "Taxes" as heretofore defined), (ii) all other charges for water, steam, heat, gas, hot water, electricity, light and power, and other service or services, furnished to the Land during the term of this Lease (hereinafter referred to as "Utility Expenses"), and (iii) all dues properly levied by the Pilgrim Commercial Park Condominium Association against the Land, once said Association is created ("Association Dues").

(b) All such Taxes and Association Dues which shall become payable during each of the fiscal periods in which the term of this Lease commences and terminates, shall be apportioned pro rata between Landlord and Tenant in accordance with the respective portions of such fiscal period during which such term shall be in effect.

(c) Tenant or its designees shall have the right to contest or review all Taxes by legal proceedings, or in such other manner as it may deem suitable (which, if instituted, Tenant or its designees shall conduct promptly at its own cost and expense, and, if necessary, in the name of and with the cooperation of Landlord and Landlord shall execute all documents necessary to accomplish the foregoing). The legal proceedings referred to herein shall include appropriate proceedings and appeals from orders therein and appeals from any judgments, decrees or orders.

(d) Landlord covenants and agrees that if there shall be any refunds or rebates on account of the Taxes paid by Tenant under the provisions of this Lease, such refund or rebate shall belong to Tenant. Any refunds received by Landlord are to be received by Landlord in trust and paid to Tenant forthwith. Landlord shall, upon the request of Tenant, sign any receipts which may be necessary to secure the payment of any such refund or rebate, and shall pay over to Tenant such refund or rebate as received by Landlord.

8. Improvements . (a) The parties acknowledge that Tenant has constructed a building, referred to as Tenant's "Distribution Center," on the Land. Said building includes an overhead passageway above the private road located on the Land that connects with the neighboring Production Building located on Site C. Title to said building and all improvements, fixtures, equipment and personal property associated therewith is now and shall remain with Tenant during the term of this Lease. The rights of the parties with respect to said building, improvements, fixtures, equipment and personal property at the termination of the Lease shall be as provided in subsections (c) and (d) below.

(b) Landlord acknowledges that, as a declarant of Pilgrim Commercial Park Condominiums, Landlord has reserved certain development rights within Pilgrim Commercial Park for future development, including the right to alter any units or buildings included within Pilgrim Commercial Park. Landlord hereby transfers to Tenant, for the term of this Lease, all of its current and future development rights pertaining to Site D. By signing below, Mayflower Management, LLC also transfers to Tenant, for the term of this Lease, all of its current and future development rights pertaining to Site D of Pilgrim Park Condominiums. Mayflower Management, LLC does not assume any other obligation hereunder.

(c) Tenant shall not make any alteration or improvement to or on the Land which is contrary to legal requirements. Tenant shall be responsible for obtaining and complying with all required permits and governmental approvals necessary for any alteration or improvement hereunder. To the extent that Tenant requires any amendment to an existing permit obtained by Landlord, Landlord agrees to provide reasonable cooperation to Tenant (at Tenant's expense) in obtaining such amendment. Tenant covenants and agrees that, unless otherwise agreed in writing, all improvements, alterations, or other work once begun will be paid for by Tenant, free and clear of liens or encumbrances against the Land (except as otherwise provided in Section 22 below), and will be performed in all respects in accordance with law, including applicable building codes. Tenant shall have the right to make any alterations or improvements to or on the Land not specifically prohibited by this Lease. Ownership of any such alterations and improvements shall remain with Tenant for all tax and other purposes during the term of this Lease.

(d) Subject to Section 21 below, Tenant shall have the right to remove from the Land all buildings, fixtures, equipment and improvements which it places upon the Land prior to surrender of the Land. In the event that Tenant elects to remove any such buildings, fixtures, equipment or improvements, it will repair any and all damage to the Land caused by such removal. Unless this Lease terminates by virtue of Tenant's purchase of the Land, any of Tenant's property remaining on the Land following the termination of this Lease shall be deemed to be the prop