Exhibit 10.27

SETTLEMENT AND LICENSE AGREEMENT

This Settlement and License Agreement (“AGREEMENT”), effective as described
herein, is made by and between Keurig, Incorporated, a Delaware corporation
having a principal place of business at 55 Walkers Brook Drive, Reading,
Massachusetts; and Kraft Foods Global, Inc. (“KFG”), a Delaware corporation
having a place of business at 1250 West North Street, Dover, Delaware; Tassimo
Corporation (“TASSIMO CORP.”), a Delaware corporation having a mailing address
of P.O. Box 6361, Dover, Delaware; and Kraft Foods Inc. (“KRAFT FOODS”), a
Virginia corporation having a place of business at Three Lakes Drive,
Northfield, Illinois.

RECITALS

WHEREAS, KEURIG is the owner of all right, title and interest in and to the
following patents directed to beverage technologies:

 

  (a) United States Patent No. 6,607,762, entitled Disposable Single Serve
Beverage Filter Cartridge (the “‘762 PATENT”);

 

  (b) United States Patent No. 7,377,162, entitled Method and Apparatus for
Liquid Level Sensing (the “‘162 PATENT”); and

 

  (c) Foreign counterparts of the ‘762 PATENT and the ‘162 PATENT.

WHEREAS, KRAFT makes, uses, keeps, offers to sell, sells, imports, and otherwise
commercializes single-serve beverage cartridges and single-serve beverage
machines under the T-DISC and TASSIMO marks;

WHEREAS, on January 10, 2007, KEURIG filed a complaint captioned Keurig,
Incorporated v. Kraft Foods Global, Inc. et al., No. 07-cv-17 GMS in the United
States District Court for the District of Delaware (the “LAWSUIT”) in which
KEURIG has asserted certain claims against KRAFT and KRAFT has asserted certain
counterclaims against KEURIG and has sought leave to assert other counterclaims;

WHEREAS, the PARTIES desire to resolve all aspects of the LAWSUIT without the
expenditure of further time and expense and to avoid any future disputes with
regard to the LICENSED PATENTS;

WHEREAS, KRAFT desires the freedom to further develop and commercialize its
beverage cartridge technology;

WHEREAS, while KEURIG is willing to license KRAFT under the LICENSED PATENTS,
KEURIG desires to protect from copying by KRAFT any future KEURIG design or
innovation for a beverage cartridge that is covered by the ‘762 PATENT;

WHEREAS, KEURIG and KRAFT have reached an agreement to settle the LAWSUIT.

 

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NOW THEREFORE, in consideration of the promises and the mutual covenants
hereinafter recited, KEURIG and KRAFT agree as follows:

1. Definitions

(a) “EFFECTIVE DATE” as used herein shall mean the last date of signature
appearing on this AGREEMENT.

(b) “PARTY” as used herein shall mean each of KEURIG and KRAFT.

(c) “AFFILIATES” as used herein shall mean any present or future domestic or
foreign corporation, company or other entity that (i) is owned or controlled,
directly or indirectly, by a PARTY; or (ii) owns or controls a PARTY (either
directly or indirectly); or (iii) is under common ownership or control with a
PARTY. For the purposes of the definition of AFFILIATES, the phrases “owned,”
“owns,” “ownership,” “controlled,” “controls” and “control” mean (a) in the case
of a corporation or company: owning or controlling, directly or indirectly, at
least twenty percent (20%) (by nominal value or number of units) of the
outstanding shares or securities conferring the right to vote at general
meetings; and (b) in the case of a partnership, joint venture, unincorporated
corporation or other entity that does not have outstanding shares or securities:
having more than a twenty percent (20%) ownership interest representing the
right to make the decisions for such partnership, joint venture, unincorporated
corporation or other entity or having a fifty percent (50%) or more ownership
although not necessarily having control over the decisions of such partnership,
joint venture, unincorporated corporation or other entity.

(d) “KRAFT” as used herein shall mean KFG, TASSIMO CORP., KRAFT FOODS and their
parents, subsidiaries and AFFILIATES worldwide.

(e) “KEURIG” as used herein shall mean Keurig, Incorporated and its parent,
subsidiaries and AFFILIATES worldwide.

(f) “LICENSED PATENTS” as used herein shall mean the ‘762 PATENT, the ‘162
PATENT and foreign counterparts of the ‘762 PATENT and the ‘162 PATENT and any
parent, divisional, continuation, continuation-in-part, reissue, reexamined
patent, registration, renewal, extension of the ‘762 PATENT, ‘162 PATENT or
foreign counterparts thereof.

(g) “LICENSED PRODUCTS” as used herein means beverage filter cartridges and all
beverage brewing machines made, used, offered for sale, sold, otherwise
distributed, kept, imported or exported anywhere in the world that KEURIG
contends would directly or indirectly infringe at least one claim of at least
one LICENSED PATENT in the absence of a license under this AGREEMENT, provided
that said beverage filter cartridges are physically compatible for use with the
piercing unit in the brew head in beverage brewing machines sold under the
Tassimo mark on or before the EFFECTIVE DATE (“EXISTING BREWER”) or physically
compatible for use with the piercing unit retrofitted in the brew head in an
EXISTING BREWER after the EFFECTIVE DATE, provided, further, however, and
notwithstanding any provision in this AGREEMENT to the contrary, LICENSED
PRODUCTS shall not include beverage filter cartridges that KRAFT or a third
party on behalf of KRAFT designed to work or intended for use with the

 

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piercing unit of a beverage brewing machine first offered for sale by, for or
under license (other than the license granted hereunder) from or to KEURIG after
the EFFECTIVE DATE (each a “NEXT GEN KEURIG BREWER”), the piercing unit of such
NEXT GEN KEURIG BREWER, itself not having been copied or derived from a beverage
brewing machine designed by KRAFT, or a party on behalf of KRAFT, and offered
for sale prior to the date on which such NEXT GEN KEURIG BREWER is first offered
for sale. A beverage filter cartridge that would be compatible for use with the
original or retrofitted piercing unit in the brew head of an EXISTING BREWER but
for the dimensions of the cartridge shall be a LICENSED PRODUCT. For purposes of
clarity, and not to limit the foregoing, the fact that a replacement part,
insert or adaptor is used in the brew head to accommodate the beverage filter
cartridge shall not render the beverage filter cartridge incompatible for use
with the piercing unit in the brew head. Furthermore, the fact that a beverage
filter cartridge is incompatible for use in an EXISTING BREWER for a reason
other than its incompatibility for use with the original or retrofitted piercing
unit in the brew head of an EXISTING BREWER shall not exclude it from being a
LICENSED PRODUCT. In this clause the term “a party on behalf of KRAFT” shall
include any party that has licensed, assigned or otherwise transferred the
relevant design to KRAFT.

2. Payment. Within ten (10) business days of the EFFECTIVE DATE, KRAFT shall pay
Seventeen Million U.S. Dollars ($17,000,000.00) to KEURIG. Payment shall be
wired to Bank of America, 100 Federal Street, Boston, MA 02110 (ABA Number
026009593, SWIFT # BOFAUS3N), Account Number 003880245710 (Keurig, Inc.).

3. Non-Exclusive License. KEURIG grants to KRAFT an irrevocable, non-exclusive,
fully paid-up, worldwide license (“LICENSE”) under the LICENSED PATENTS to make,
have made, use, keep, offer for sale, sell, otherwise directly or indirectly
distribute, import or export anywhere in the world LICENSED PRODUCTS. The
LICENSE grant herein includes the right to sub-license rights conveyed under
this AGREEMENT to permit other parties to make, use, keep, offer to sell, sell,
otherwise distribute, import or export LICENSED PRODUCTS made, sold,
distributed, imported or exported anywhere in the world by or for KRAFT.
Furthermore, the LICENSE grant herein includes the right for KRAFT to
sub-license manufacturers of brewers for the limited purpose of making, using,
keeping, offering to sell, selling, distributing, importing and exporting
anywhere in the world brewers for use with KRAFT’s LICENSED PRODUCTS. KRAFT
otherwise may not sub-license its rights under this AGREEMENT without KEURIG’s
written consent. This LICENSE shall end on the date upon which the last of the
patents licensed hereunder expires. Those terms and conditions of the LICENSE
intended to be observed and performed by one or more PARTIES after termination
or expiration of the LICENSE, for any reason, shall so survive and continue.

4. Patent Validity and Enforceability. Nothing herein is an admission nor shall
be deemed an admission by KRAFT that any KRAFT product infringes the LICENSED
PATENTS or that the LICENSED PATENTS are valid or enforceable.

 

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5. Patent Marking. Within one hundred and eighty (180) days of the EFFECTIVE
DATE, Kraft shall begin marking LICENSED PRODUCTS in accordance with 35 U.S.C. §
287 as follows:

(a) The packaging of single-serve beverage filter cartridges shall be marked as
covered by the ‘762 PATENT.

(b) The packaging of brewing machines sold by KRAFT having float-disk sensors
shall be marked as covered by the ‘162 PATENT. To the extent that LICENSED
brewing machines are manufactured by entities other than KRAFT, KRAFT shall make
its best efforts to have such entities comply with the foregoing patent marking
requirements.

6. No Warranty or Obligation. Nothing contained in this AGREEMENT shall be
construed as:

(a) a warranty or representation that commercialization of LICENSED PRODUCTS
will be free of infringement of third party patents;

(b) an obligation or agreement on the part of KEURIG to sue third parties for
infringement of KEURIG patents; or

(c) an obligation on the part of KEURIG to pursue, maintain, prosecute or take
any other action in connection with any patents or patent rights anywhere in the
world.

7. Indemnification. KRAFT shall be responsible for all personal injury, property
damage and warranty claims caused by any and all LICENSED PRODUCTS.

8. Dismissal of the Lawsuit. Within ten (10) business days of the EFFECTIVE
DATE, the PARTIES will execute and file with the United States District Court
for the District of Delaware a Stipulation of Dismissal With Prejudice in the
form attached hereto as Exhibit A.

9. Binding of Successors and Assigns. This AGREEMENT, and the duties and
obligations herein, shall be binding upon KRAFT and KEURIG and/or any and all of
their respective AFFILIATES, successors and assigns.

10. Assignability.

(a) KRAFT may not assign or otherwise transfer any of its rights, duties or
obligations under this AGREEMENT to any third party at any time without the
prior written consent of KEURIG. Notwithstanding the immediately preceding,
KRAFT shall have the right to assign or otherwise transfer its rights, duties,
or obligations under this AGREEMENT, without KEURIG’s prior written consent, as
part of the sale of its entire business, its beverage business, its coffee
business, or its on demand coffee business, or, in relation to the foregoing,
any part thereof, on either a worldwide or country by country basis. To the
extent that KEURIG’s consent is necessary for such assignment or transfer as
part of the sale of its entire business, its beverage business, its coffee
business or its on demand coffee business or, in relationship to the foregoing,
any part therof, on either a worldwide or country basis, KEURIG hereby agrees to
provide such consent.

 

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(b) Any assignment of KEURIG’s rights in the LICENSED PATENTS and/or its
obligations under this AGREEMENT shall include a provision that the assignment
is subject to KRAFT’s license and KEURIG’s obligations under this AGREEMENT and
require that the assignee accept in writing KRAFT’S license and KEURIG’s
obligations under the AGREEMENT. Any assignment that does not include the
required provision shall be void. Likewise, if KEURIG fails to obtain the
assignee’s written acceptance of KRAFT’s license and KEURIG’s obligations under
the AGREEMENT, the assignment is void.

11. Confidentiality. The PARTIES shall maintain the terms of the AGREEMENT in
confidence and shall not publicize or disclose the terms in any manner
whatsoever. Notwithstanding the foregoing, the PARTIES may disclose the terms of
the AGREEMENT to the limited extent required by law, including but not limited
to their filings at the United States Securities and Exchange Commission. In any
such disclosure the disclosing PARTY shall not include any commentary or make
any characterization regarding the litigation and settlement thereof, except to
the extent required by law in the opinion of the disclosing PARTY’s attorneys,
accountants, auditors, tax preparers, or financial advisors. For purposes of
clarity, Green Mountain Coffee Roasters Inc. (“GREEN MOUNTAIN”), the parent
company of KEURIG, intends to disclose the AGREEMENT in an SEC Form 8-K Current
Report and to attach a copy of the AGREEMENT to GREEN MOUNTAIN’S next 10-Q
Report. Nothing herein shall prohibit such disclosure. The PARTIES may also
disclose the AGREEMENT and the terms thereof to their attorneys, accountants,
auditors, tax preparers, financial advisors and other agents to the limited
extent they have a need to know the terms in order to perform their professional
duties. KEURIG may also issue a press release limited to the following content:
(1) an announcement that the litigation between KEURIG and KRAFT has been
settled and a license granted by KEURIG to KRAFT; (2) the amount of the payment
hereunder; and (3) a statement shall be included that “The Parties believe that
the settlement is an efficient and pragmatic way to resolve their patent
dispute. Both parties agree that it is in the best interest of their respective
businesses and shareholders to avoid the cost and uncertainties of continued
litigation.” KEURIG may also include a statement that KEURIG continues to invest
in research and development and the value of its intellectual property
portfolio. Furthermore, the PARTIES may also disclose the LICENSE grant in
Section 3, the Marking provisions in Section 5, the Assignability provisions in
Section 10 and the Mutual Release provisions in Section 21 to the limited extent
necessary to inform a third party that a product is licensed under the LICENSED
PATENTS, or that past claims are released, in order to obtain the cooperation of
a third party to mark brewers, or in KRAFT’s pursuit of a sale of its whole
business, or its beverages business, or its coffee business, or its on-demand
coffee business, or, in relationship to the foregoing, any part therof, on
either a worldwide or country basis, or KEURIG’s assignment of rights in the
LICENSED PATENTS and/or its obligations under the AGREEMENT.

12. Construction. The PARTIES acknowledge that this AGREEMENT is the result of
negotiations between the PARTIES and therefore shall be interpreted fairly in
accordance with its terms and without any construction in favor of or against
either PARTY. The titles of the paragraphs herein are for the convenience of
reference only and shall not affect the construction of this AGREEMENT.

 

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13. Effective Counsel. KEURIG and KRAFT have had all desired counsel, legal and
otherwise, in entering into this AGREEMENT, and do so in accordance with their
own free acts and deeds.

14. Controlling Law and Jurisdiction. This AGREEMENT shall be construed and
interpreted in accordance with the laws of the State of Delaware without
reference to its principles of conflicts of laws. Each PARTY irrevocably
consents to the exclusive jurisdiction and venue of the federal and state courts
in the State of Delaware to enforce the terms of this AGREEMENT and to resolve
all disputes hereunder. In the event that any controversy or claim arises
relating to this Agreement, the PARTY identifying the controversy or making the
claim shall, as a prerequisite to filing a lawsuit, give written notice of the
controversy or claim to the other PARTY. Thereinafter, the General Counsels (or
the equivalent officers) of the PARTIES shall meet and attempt, in good faith,
to resolve said controversy or claim. If the General Counsels (or the equivalent
officers) of the PARTIES are unable to resolve the controversy or claim within
sixty (60) days after written notice, the PARTIES agree to submit the
controversy or claim to mediation, all prior to the filing of a lawsuit.

15. Merger and Modification. This AGREEMENT constitutes the entire agreement by
and between the PARTIES concerning the subject matter hereof, and supersedes all
prior proposals, agreements, representations, communications and understandings
with respect thereto. No variation or modification of the terms of this
AGREEMENT, nor any waiver of any of the terms or provisions hereof, shall be
valid unless in writing and signed by an authorized representative of each
PARTY.

16. Severability. In case any one or more of the provisions contained in this
AGREEMENT shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this AGREEMENT and such invalid, illegal and
unenforceable provision shall be reformed and construed so that it will be
valid, legal, and enforceable to the maximum extent permitted by law.

17. Execution. This AGREEMENT shall be executed in two counterparts and each
such counterpart shall be deemed an original thereof. Facsimile signatures on
counterparts to this AGREEMENT shall be considered original signatures, with the
further understanding that each PARTY shall exchange one counterpart signed in
ink for receipt by the other PARTY no later than five (5) business days after
the EFFECTIVE DATE.

18. Costs. Each PARTY will be responsible for all of its own attorneys fees,
costs, expenses and other disbursements incurred by it in connection with the
LAWSUIT. Nevertheless, the prevailing party in any controversy or claim
involving this AGREEMENT shall be entitled to recover its reasonable attorneys
fees, costs and expenses regarding same.

 

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19. Service of Notice. All notice obligations contemplated by this AGREEMENT
shall be satisfied by sending written notice to the following addresses for the
respective PARTY or such addresses as a PARTY may later specify in writing:

 

KEURIG    KRAFT Michael J. Degnan, Esq.    Marc S. Firestone, Esq. Vice
President and General Counsel    General Counsel and Executive Vice President,
Keurig, Incorporated    Corporate & Legal Affairs 55 Walkers Brook Drive   
Kraft Foods Inc. Reading, MA 01867    Three Lakes Drive    Northfield, IL 60093
with copy to:       with copy to: Michael A. Albert, Esq.    Wolf, Greenfield &
Sacks, P.C.    David Schlitz, Esq. 600 Atlantic Avenue    Baker Botts LLP
Boston, MA 02210    The Warner    1299 Pennsylvania Avenue, NW    Washington,
D.C. 20004

20. Representations and Warranties. Each PARTY represents and warrants that
(i) it has full authority and power to enter into this AGREEMENT, and to perform
its obligations hereunder; (ii) all necessary action, if any, to authorize the
execution, delivery and performance of this AGREEMENT has been taken; (iii) the
person executing this AGREEMENT has been duly authorized to execute this
AGREEMENT; and (iv) this AGREEMENT constitutes a legal, valid and binding
obligation of each such PARTY, enforceable in accordance with the terms hereof.
In addition, each person executing this AGREEMENT represents that he or she has
full authority to do so. Except to the extent covered by this AGREEMENT, KEURIG
represents and warrants that as of the EFFECTIVE DATE, neither Keurig,
Incorporated nor any of its parents, subsidiaries or AFFILIATES worldwide, have
any patents or patent applications that KEURIG believes the LICENSED PRODUCTS
infringe or, as to any patent applications, would infringe if and when any
patent is issued thereon.

21. Mutual Releases.

(a) KEURIG, for itself and its directors, officers, partners, employees, agents,
attorneys, subrogors, subrogees, predecessors, parents, subsidiaries and
AFFILIATES (collectively, the “KEURIG RELEASORS”), does hereby and forever
release and discharge KRAFT, and its past and present officers, directors,
employees, partners, agents, attorneys, predecessors, parents, subsidiaries,
AFFILIATES, successors, and assigns, all direct and indirect suppliers, all
direct and indirect purchasers, and users of any products, services, or devices,
acquired directly or indirectly from KRAFT, and all manufacturers (collectively,
the “KRAFT RELEASEES”), of Tassimo single serve beverage cartridges and brewers
for use with Tassimo single serve beverage cartridges (collectively, the
“TASSIMO PRODUCTS”), from any and all actions, causes of action, suits, debts,
obligations, controversies, agreements, promises,

 

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judgments, damages, liens, claims and demands whatsoever, in law or in equity,
whether known or unknown (other than KRAFT’s obligations under this AGREEMENT),
related to (i) anything the KRAFT RELEASEES have done or failed to do prior to
the EFFECTIVE DATE of this AGREEMENT in connection with the manufacture, offer
for sale, sale, distribution, keeping importation and exportation anywhere in
the world of TASSIMO PRODUCTS or (ii) KEURIG’s allegations in the LAWSUIT. In
accordance with this Mutual Release, Keurig covenants not to sue or threaten to
sue any KRAFT RELEASEE based upon the manufacture, offer for sale, sale,
distribution, importation and exportation anywhere in the world, prior to the
EFFECTIVE DATE of this AGREEMENT, of TASSIMO PRODUCTS.

(b) KRAFT, for itself and its directors, officers, partners, employees, agents,
attorneys, subrogors, subrogees, predecessors, parents, subsidiaries and
AFFILIATES (collectively, the “KRAFT RELEASORS”), does hereby and forever
release and discharge KEURIG, and its past and present officers, directors,
employees, partners, agents, attorneys, predecessors, parents, subsidiaries,
AFFILIATES, successors, and assigns (collectively, the “KEURIG RELEASEES”), from
any and all actions, causes of action, suits, debts, obligations, controversies,
agreements, promises, judgments, damages, liens, claims and demands whatsoever,
in law or in equity (other than KEURIG’s obligations under this AGREEMENT),
related to anything the KEURIG RELEASEEES have done or failed to do prior to the
EFFECTIVE DATE of this AGREEMENT relating to the allegations in the LAWSUIT.

 

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IN WITNESS WHEREOF, each of the PARTIES have caused two original copies of this
AGREEMENT to be executed on their behalf by their duly authorized officers

 

For Keurig, Incorporated     For Kraft Foods Global, Inc.

Michael J. Degnan, Esq.

Vice President and General Counsel

   

Marc S. Firestone, Esq.

General Counsel and Executive Vice President,

Corporate & Legal Affairs

Signature:  

/s/ Michael J. Degnan

    Signature:  

/s/ Marc S. Firestone

Date: October 23, 2008     Date: October 23, 2008       For Tassimo Corp.      

Irma Villarreal

Chief Counsel & Assistant Secretary

      Signature:  

/s/ Irma Villarreal

      Date: October 23, 2008      

For Kraft Foods Inc.

 

Marc S. Firestone, Esq.

General Counsel and Executive Vice President,

Corporate & Legal Affairs

      Signature:  

/s/ Marc S. Firestone

      Date: October 23, 2008

 

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EXHIBIT A

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

 

KEURIG, INCORPORATED,

 

Plaintiff,

 

v.

 

KRAFT FOODS GLOBAL, INC.,

TASSIMO CORPORATION, and

KRAFT FOODS INC.,

 

Defendants.

   Civil Action No. 07-017-GMS   

STIPULATION OF DISMISSAL WITH PREJUDICE

Having reached a settlement agreement, the parties stipulate pursuant to Fed. R.
Civ. P. 41(a)(1)(A)(ii) to the dismissal of the above-captioned case, including
all claims and counterclaims, with prejudice, without right of appeal, and with
each party to bear its own costs.

 

YOUNG CONAWAY STARGATT & TAYLOR, LLP

 

John W. Shaw (No. 3362)

Karen E. Keller (No. 4489)

The Brandywine Building

1000 West Street, 17th Floor

Wilmington, DE 19801

(302) 571-6600

jshaw@ycst.com

kkeller@ycst.com

 

Attorneys for Plaintiff Keurig, Incorporated

 

Michael A. Albert

Michael N. Rader

WOLF, GREENFIELD & SACKS, P.C.

600 Atlantic Ave.

Boston, MA 02210

(617) 646-8000

  

POTTER ANDERSON & CORROON LLP

 

Richard L. Horwitz (No. 2246)

David E. Moore (No. 3983)

Hercules Plaza, 6th Floor

Wilmington, DE 19899

(302) 984-6000

rhorwitz@potteranderson.com

dmoore@potteranderson.com

 

Attorneys for Defendants Kraft Foods Global,

Inc., Tassimo Corporation, and Kraft Foods Inc.

 

David M. Schlitz

William S. Foster, Jr.

BAKER BOTTS LLP

1299 Pennsylvania Ave., NW

Washington, DC 20004

(202) 639-7700

 

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